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Verizon Hints At Scrapping Unlimited Data Plans 319

Posted by Soulskill
from the where-are-the-antitrust-watchdogs dept.
BusinessWeek reports that Verizon may be preparing to follow AT&T's example by eliminating unlimited data plans later this year. Quoting: "'We will probably need to change the design of our pricing where it will not be totally unlimited, flat rate,' John Killian, chief financial officer of Verizon Communications Inc., the wireless unit’s parent, said in an interview at Bloomberg’s headquarters in New York today. The company anticipates 'explosions in data traffic' over wireless networks as new phones on 4G networks incorporate data-heavy applications, such as video downloads, he said. Verizon is working to keep its network running smoothly as more of its customers switch to smartphones that connect to the Internet. ... 'The more bandwidth that you make available, the faster it will be consumed,' said Craig Moffett, analyst at Sanford C. Bernstein & Co. in New York. 'From Verizon’s perspective, the last thing you want is for another generation of consumers to be conditioned to the idea that data is always going to be uncapped.'"
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Verizon Hints At Scrapping Unlimited Data Plans

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  • by YA_Python_dev (885173) on Saturday June 19, 2010 @10:12AM (#32624886) Journal
    Why eliminate them completely, why simply not raise the price until it's profitable if some consumer want them?
    • by drinkypoo (153816) <martin.espinoza@gmail.com> on Saturday June 19, 2010 @10:32AM (#32625030) Homepage Journal

      Why eliminate them completely, why simply not raise the price until it's profitable if some consumer want them?

      That's what they're doing. It's called "charging by the minute" (or megabyte).

      The simple truth is that if you sell an unlimited connection, some users will cost you far more than other users. Further, if you kicked all those users off your service tomorrow, you wouldn't lose that much money. And if you charged people the actual cost of unlimited service and then spent it on providing it, which includes actually building out new capacity, then you wouldn't be able to give your execs gigantic bonuses they don't deserve.

      • Re: (Score:3, Insightful)

        by westlake (615356)

        some users will cost you far more than other users. Further, if you kicked all those users off your service tomorrow, you wouldn't lose that much money

        You might be making more money - with less investment in infrastructure.

        if you charged people the actual cost of unlimited service and then spent it on providing it, which includes actually building out new capacity, then you wouldn't be able to give your execs gigantic bonuses they don't deserve.

        This assumes there are enough customers willing to bear the r

        • Insensitive clods. (Score:2, Interesting)

          by BrokenHalo (565198)
          'From Verizon's perspective, the last thing you want is for another generation of consumers to be conditioned to the idea that data is always going to be uncapped.'"

          I don't know what generation they're talking about, since 300 baud was considered a fairly good linespeed when I was in my 20s, and the amount of data you could transmit was limited by the size of the trolley we used to carry all those mag tapes around.
          • by cbiltcliffe (186293) on Saturday June 19, 2010 @06:04PM (#32628112) Homepage Journal

            Funny, the first thing I thought of when I saw that quote:

            'From Verizon's perspective, the last thing you want is for another generation of consumers to be conditioned to the idea that data is always going to be uncapped.'"

            was this:

            "From Verizon's perspective, the last thing you want is for another generation of consumers to be conditioned to the idea that they might actually get something in return for all the money they give us."

            There. Fixed that for you.

          • by Bert64 (520050) <bert&slashdot,firenzee,com> on Saturday June 19, 2010 @06:50PM (#32628416) Homepage

            Data was always unlimited, or rather only limited by the speed of the connection...
            There was nothing to stop you running your 300bps modem flat out 24/7, the problem is that end user connections have increased in speed faster than the carriers have invested in backbones to carry that data...

      • by tsm_sf (545316) on Saturday June 19, 2010 @11:12AM (#32625238) Journal
        That's what they're doing. It's called "charging by the minute" (or megabyte).

        It's spelled "charging by the minute" but it's pronounced "collusion".
        • You realize that every company adjusts it's prices to maximize profitability, we only call it "collusion" under specific circumstances. I just don't see any evidence in this case, care to enlighten us?
          • by kaizokuace (1082079) on Saturday June 19, 2010 @01:23PM (#32626184)
            When one company sells something that customers want and then another competing company matches their price/product/etc to access those customers, that is competition.

            When one company decides to force a product to become worse but cost the same and then another one follows suit. That's something else.

            It may or may not actually involve collusion but it sure doesn't do anything good for the customers.
            • Re: (Score:3, Insightful)

              by Hognoxious (631665)

              Matching can occur in either direction.

              Competitor lowers prices, so must you if you don't want to lose market share.

              Competitor raises prices, so can you, and you're leaving money on the table if you don't.

              It's only collusion if it's planned and orchestrated. Do you have any hard evidence of that?

      • I don't think it's time to go to per-minute charging yet, but it does seem logical to have plans similar to my phone company:

        - 1000 minutes per month for $15
        - 10 cents for each additional minute

        The ISP could charge a flat rate for everyone, and the power users who go over 250 GB can be charged 10c for each additional gigabyte.

        • by ChairmanMeow (787164) on Saturday June 19, 2010 @11:57AM (#32625510) Journal

          The ISP could charge a flat rate for everyone, and the power users who go over 250 GB can be charged 10c for each additional gigabyte.

          Are you kidding? This is Verizon we're talking about. I'm currently have a phone with them (a cheap phone) and was recently looking into their data plans. Their non-"unlimited" plan is $10/month, and beyond a limit of 25 MB (not GB, MB) the price is $1/MB (again, not GB, MB). Somehow I think any new non-unlimited plan of theirs would be a lot more expensive than what you're thinking of.

          • >>>beyond a limit of 25 MB (not GB, MB) the price is $1/MB

            Then you quit Verizon and choose a different provider that has cheaper rates. For example my provider is $60 per 5 GB, or only 1 cent per megabyte..... that's 99% cheaper than the plan you just described.

            • by dgatwood (11270) on Saturday June 19, 2010 @01:54PM (#32626392) Journal

              Which is nice, in theory. In practice, there are only two cell providers in the U.S.: AT&T and Verizon, and they're both doing this. If you live in a major city, you could use Sprint/Nextel or T-Mobile, but neither of them has the infrastructure to be a viable competitor to AT&T, much less Verizon.

              And this is why I keep saying that widespread telecom infrastructure can feasibly be operated only by government-founded nonprofit orgs. As soon as you have for-profit companies providing the infrastructure for critical services, you end up with a market with insufficient competition to prevent abuse. If you want ubiquitous free-market competition in telecom services, you have to take the infrastructure out of the picture.

              And lest you say that cell phones aren't critical services or that you can live without a cell phone, I would point out that most homeless people I've seen in California have cell phones. It's so essential to modern society that people choose a cell phone over a roof. And although cellular data is not in the same category right now, it's only a matter of time until it is (and cellular data can't exist without cellular voice anyway, making that a moot point).

              The only alternative is extreme government regulation, and although this can help fix the worst of the monopoly/duopoly problems and increase coverage areas, it rarely results in any significant amount of true competition. We need a nationalized cellular tower service that leases nationwide tower services at a low cost, and we need it twenty years ago.

              • Re: (Score:3, Insightful)

                by Macrat (638047)

                Which is nice, in theory. In practice, there are only two cell providers in the U.S.: AT&T and Verizon, and they're both doing this. If you live in a major city, you could use Sprint/Nextel or T-Mobile, but neither of them has the infrastructure to be a viable competitor to AT&T, much less Verizon.

                Sprint and T-Mobile can drop calls just as good as ATT/Verizon in major cities.

              • Homeless people have cell phones *because they don't have homes and so can't have land lines*. A phone is a lot cheaper than a roof, so your argument is spurious.

                I've got 10yrs experience doing software development for a living. I don't have a cell phone. Heck, I don't have a laptop. There are times it would be convenient to have both, but it's not worth the money to me.

    • by nurb432 (527695)

      Why cater to the customers needs in the first place? Just screw them as much as you can.

    • by _KiTA_ (241027) on Saturday June 19, 2010 @12:40PM (#32625850) Homepage

      Why eliminate them completely, why simply not raise the price until it's profitable if some consumer want them?

      Because they know in 5, 10 years their network will easily be able to handle any data usage -- presuming they can stop buying their execs yachts and cocaine -- even while the advent of stuff like streaming HD Netflix Movies will send data usage through the roof. By getting us weaned off unlimited data NOW, they will make much more money LATER when everyone is hitting a paltry 2 gig cap.

      Whenever you have a pay-per-minute system, you eventually see it shift to a pay-per-month system, and the price drops. We've seen it in ISPs, MMORPGs, Long Distance, and Cellphones. In each case, the companies remain profitable, but no where near as much if they were able to keep the pay-per-minute scheme going. But market forces force the companies to give customers a pay-per-month system over X number of years, which seems to be where consumers are happy enough.

      Data plans on cellphones are evolving to that point. The next step would be the price dropping like a rock, which is the "part 2" of the market forces mess above. The cellphone companies are (probably illegally, but it's the US, so whatever) conspiring to price fix their market by simply dropping the rates en mass so that customers can't just flee AT&T for Verizon or Sprint or whoever has a sane plan, since they're all dropping the plans.

      But this isn't about money. At least, not short turn.

      It's about forcibly preventing that evolution so they can ride the wave further on out. Their networks are woefully insufficient, data usage is going up at a rate only Raymond Kurzweil expected, and it's only the start of the exponential growth (helloooo iPad HD Netflix App)... But all of these pale in comparison to the hope that they can stop the evolution of their market. ... Because if they can get people used to the idea of $25/2GB data plans that sound ok now, but in 5 years would get you maybe a movie or 4 streamed before the obscene data charges kick in... $25 is going to look like chump change. Remember that these are the assholes who thought ahead far enough to make the web buttons, which load just enough on your data plans to cost you a few cents, stupidly easy to press. They make millions from it.

      If they can get the average user -- or the average for their network -- to spend more than $6 a month in overage fees, this whole mess becomes hugely profitable for them. IF they can get it to $7, $10, or even $15, it's even better.

  • by wesw02 (846056) on Saturday June 19, 2010 @10:12AM (#32624888)
    Verizon's current unlimited plans aren't actually unlimited, they translate to 5G per month, if you exceed it you'll be fined. IMHO that's already a class action waiting to happen. This just sucks though, cell phone carriers charge more for internet and you are getting less of it.
    • by rolfwind (528248) on Saturday June 19, 2010 @10:15AM (#32624908)

      They should really stop advertising "unlimited" in America. If there was an ounce of consumer protection in the government, they should hammer such terms as what it is, fraud.

      • Except the contract says they can change the terms any time they desire (for example, from unlimited to 5 GB). When that happens you have the right to escape the contract, so there's no basis for a lawsuit.

      • by internic (453511) on Saturday June 19, 2010 @11:42AM (#32625424)

        I'm guessing part of the problem is that even if one carrier/ISP wanted to be honest and explain the limitations that they would really impose, their competitors won't do it, and as long as the average consumer is unwary they will opt in favor of the better sounding deal. I assume the reason this may be changing with mobile phone carriers is that enough users are starting to bump up against the hidden or unstated limits that the lie of "unlimited" service is no longer tenable.

      • by ukyoCE (106879)

        Agreed. I totally understand the necessity of charging for bandwidth, but they need to be honest about it. This is one of those unfortunate cases where no company wants to be the first to stop advertising "unlimited" and risk getting beat up for it by their (still-lying) competitors.

      • Re: (Score:3, Informative)

        by bynary (827120)
        I just called T-Mobile on such fraud. Here is the abridged version of the conversation I had in the T-Mobile store (oh wait, even though the store has the T-Mobile logo plastered everywhere with nary another brand name in sight, apparently it's an authorized reseller) with a sales rep:

        Me: Do you sell air cards?
        Rep: Yes!
        Me: Great! Can you tell me about it?
        Rep: Sure. You get unlimited data for $39.99 a month.
        Me: Unlimited? Really?
        Rep: Yes!
        Me: Is that 3G or 4G?
        Rep: It's 3G but it's actuall
    • It isn't a 5GB cap. You're free to transfer as much as you please.

      Anything over 5GB gets rate limited to 56k speeds, though.

      They're giving you unlimited data, and past 5GB, you still have unlimited data. It just isn't fast, and nothing in their terms of use prohibits this. You can't really drop a class-action lawsuit against them doing that either.

      You're not fined for going over 5GB, just throttled.
    • by hduff (570443)

      I used to be on a truly unlimited 3G plan.

      Without warning me, they changed me to a 5GB-and-pay-over-that plan at $1 per MB. After complaining, they refunded the charges and dropped it to $0.25 per MB and at least keep me kinda updated as to current usage (never used to know until after the month was over).

      I still hate them.

  • No surprise (Score:5, Insightful)

    by name_already_taken (540581) on Saturday June 19, 2010 @10:13AM (#32624894)

    This isn't really surprising.

    Verizon has always seen their customers purely as a source of profit, and has done everything they can to maximize the fees they can charge customers - going as far as disabling bluetooth file exchange on their phones so customers have to send things like pictures via the Verizon network so they incur data charges.

    Eliminating unlimited data plans is a logical step in maximizing profits.

    • by rolfwind (528248)

      What they need to do is uncouple phone from the network -- to the point that the subsidized phone contract is seperate from the phone plan (allowing a customer to switch from month to month) and to stop distinguishing between different types of data -- like texts vs emails and the like. It's all just data. Perhaps even make voice and data seperate, allowing you to purchase seperate plans from different companies for either.

      Of course, the push has to come from the people and legislated. The phone companie

      • SMS != data (Score:5, Informative)

        by name_already_taken (540581) on Saturday June 19, 2010 @10:28AM (#32624992)

        What they need to do is uncouple phone from the network -- to the point that the subsidized phone contract is seperate from the phone plan (allowing a customer to switch from month to month) and to stop distinguishing between different types of data -- like texts vs emails and the like. It's all just data.

        Verizon's network has been CDMA, which I'm not terribly familiar with (I closed my Verizon account back in 2002 and haven't looked back), but at least for GSM, text and data are not the same thing. I don't know how it works in CDMA, so it could be different for Verizon, but over GSM, SMS messages are squeezed into unused space in control packets that the phones and towers exchange normally even if there's no call happening. So on GSM networks, SMS isn't data and incurs no cost at all to the operator. SMS should be completely free on GSM providers.

        Data, on the other hand, takes up packets/bandwidth that would otherwise be available for voice service, so there is a cost.

        • by TyFoN (12980)

          SMS was a free "extra service" for some time here in Norway (around 1994).

        • Re:SMS != data (Score:4, Interesting)

          by lancejjj (924211) on Saturday June 19, 2010 @12:09PM (#32625596) Homepage

          SMS messages are squeezed into unused space in control packets that the phones and towers exchange normally even if there's no call happening. So on GSM networks, SMS isn't data and incurs no cost at all to the operator. SMS should be completely free on GSM providers.

          I agree that there is little if not zero "tower-to-handset" bandwidth cost for SMS messaging.

          However, SMS (and MMS) messaging does depend on all that infrastructure that's in place, and by providing SMS services, the telcos are required to reliably route and deliver the messages around the world. That message handling and routing certainly has a cost, and therefore I believe that providers have a right to fairly pass on a portion of the cost of their infrastructure investments (plus a fair profit) to the users of SMS services.

          HOWEVER, I am no apologist here. At least in the USA, providers charge very high fees for text messages. If I send a 15 character text message to my wife, we get charged $0.40. A few pennies may be fair, but far more than $0.39 of that $0.40 is profit. Furthermore, SMS is configured to be parasitic - my friends (and spammers) like to send me text messages without my authorization. That costs me $0.20 every time, and there is no way for me to stop them without giving up my wireless service altogether.

          What is even more disturbing is that all the telcos in the US have generally increased their SMS rates to a new high. They now charge the same outrageous fee ($0.20 in, $0.20 out), leading me to believe that instead of competing, they are colluding.

          In short, telcos have decided (individually or together) not to compete in this area, to the detriment of all telco customers. Laws should be considered to encourage fair and healthy competition in this space, which will encourage healthy SMS industry growth and efficiencies.

          • by Bigjeff5 (1143585)

            What is even more disturbing is that all the telcos in the US have generally increased their SMS rates to a new high. They now charge the same outrageous fee ($0.20 in, $0.20 out), leading me to believe that instead of competing, they are colluding.

            Not all, my SMS is $7 a month for unlimited messages, another $8 for unlimited data on a non-smart phone (don't bother, it sucks), and standard $30 for unlimited smart phone data (includes texts). It's a local carrier though, and they pound you up the poop chute in other ways (namely getting their cable internet - it's hella expensive and the only decent option here).

        • Re: (Score:3, Insightful)

          by shawb (16347)

          SMS... incurs no cost at all to the operator

          Not exactly true. Transmission to the tower is essentially free, but transmission of the data in the SMS packet across the network, and subsequent routing to the destination phone does cost the carriers money. Additionally, having SMS in the protocol means that bandwith is no longer free to add increased functionality or allow compression that would allow a tower to strip the dead space and allow communication with more phones.

          But, yes, SMS is not carried over the 3G channel and so should not be inco

        • by voidptr (609)

          SMS messages are squeezed into unused space in control packets that the phones and towers exchange normally even if there's no call happening. So on GSM networks, SMS isn't data and incurs no cost at all to the operator. SMS should be completely free on GSM providers.

          That's true, but as someone else said, there's still a cost on the backend of routing those packets around to get them to the right tower where they can be slotted into the control packet.

          On top of that, there's only so many of those control packets per unit time.. Just because it's being stuffed into an unused space, doesn't mean it's an unlimited resource.

          That's not to say the current a la carte rates are reasonable, although now they are set to heavily push even light users towards a bundle, where the pe

    • "Eliminating unlimited data plans is a logical step in maximizing profits."

      That's funny, because for me it's the next step in reducing my expenses. I am not one of those people who downloads gigs worth of stuff per month on my phone. In fact, my lifetime download on my iPhone is right around 950MB. That's for 2 1/2 years worth of using it to check email constantly, surf the web whenever I want and do some occasional Youtube viewing. With AT&T's new plan I can cut my data plan cost in half.

    • by nurb432 (527695)

      Verizon has always seen their customers purely as a source of profit,

      That is the case for most companies, but telecommunication providers just happen to be some of the worst, ever since the breakup.

    • by Bigjeff5 (1143585)

      Verizon has always seen their customers purely as a source of profit, and has done everything they can to maximize the fees they can charge customers...

      Somebody doesn't understand the point of a "business".

      The good and bad methods out there are simply different strategies, and frankly, constantly screwing your customers is usually a bad one unless you are in a monopoly position.

      Hey, guess what kind of position most telco's are in? Thanks Mr. Government, really appreciate that one!

  • by Jackie_Chan_Fan (730745) on Saturday June 19, 2010 @10:15AM (#32624910)

    Just admit you found another way to squeeze money out of your user base. Thats all this is really.

    Its like text messaging. Everyone wants it, so lets charge everyone ridiculous rates to send text.

    Now that everyone wants smart phones, lets charge everyone for data because we can.... and theres nothing you can do about it.

    • Re: (Score:2, Insightful)

      by massysett (910130)

      Its like text messaging. Everyone wants it, so lets charge everyone ridiculous rates to send text.

      Now that everyone wants smart phones, lets charge everyone for data because we can.... and theres nothing you can do about it.

      Boost Mobile. $50, text all you want, unlimited web.

      Cricket. $40, text all you want, unlimited web.

      So there is something you can do about it, but you'd rather sit around and whine. Or maybe you want the top notch devices and top notch network but you don't want to pay for it. Okay.

    • It's pretty obvious that cellular data networks have limited capacity. Just look at AT&T's problems with delivering enough bandwidth to the iPhones on their network. And as a long-time cellular broadband user and early adopter, I can personally attest that the broadband speeds have gone down in general as more people have gotten on 3G and also go down even more when lots of people are present in the same area. (I work in areas where I get phenomenally great bandwidth at 6 AM when no one else is there

      • by grapeape (137008)

        The capacity limits are of their own doing though. Back years ago I was an engineer for a wireless company, we had formulas for oversubscribing but were regularly told to ignore them. Profits are far more preferred to infrastructure. Of course that same company took a huge hit and went on a rather rapid decline for the last 6-7 years...they appear to be turning around but only because of investment in infrastructure and better capacity due to a greatly reduced subscriber rate.

        Consumers cant be expected t

  • by ClaraBow (212734) on Saturday June 19, 2010 @10:16AM (#32624914)
    All the content providers are pushing for mobile TV, streaming music, video chat, stream movies and the cellular data providers are trying to condition consumers to the fact that data is limited and you must pay for it! What really gets me is that the data providers are also pushing content and at the same time are worried about usage. Something doesn't seem right here!
    • Step 1: Bamboozle Joe and Jane Consumer with nifty "the future is now" capabilities on shiny new gadgets.
      Step 2: Make them pay through the nose if they actually use them.
      Step 3: Profit! (for a while)
      Step 4: Go bankrupt when the Joes' and Janes' contracts are up, they don't renew them, and they switch back to cheap, basic phones.

    • by grumling (94709) on Saturday June 19, 2010 @12:45PM (#32625908) Homepage

      For the most part, the cell companies in the US are pushing THEIR content, not general web content. Their content is cached at an on-network data center, formated to fit their bandwidth constraints (320X200 video, 4KHz mono audio), and in some cases, content providers paying for access.

      Going off their formula to 720p YouTube isn't what they want you to do.

  • by lul_wat (1623489) on Saturday June 19, 2010 @10:19AM (#32624944)
    Here I thought New Zealand was 10 years behind because we don't have unlimited data. Turns out we were 10 years ahead.
  • They get us bitches hooked on drugs (data) then cut off the supply and make us do things we don't like, ie. giving them more money.

  • by Enrique1218 (603187) on Saturday June 19, 2010 @10:32AM (#32625024) Journal
    The only competition these guys do is seeing who can give their customers less. Forcing data plan, hiking early termination fees above the value of the phone, charging for text messaging, ring tones, and now limiting data plans. There is little difference between any of the wireless service providers in terms of what they provide. The cell phone lock in and multiyear contracts allow this to happen and stifle innovation. By getting a $600 smartphone for $200 with a multiyear contract, we lock ourselves to vendor and can't leave them when they cut service. Instead of developing the technology to meet the customer demand, they would rather trained their customers not to expect too much
    • by Fnord666 (889225) on Saturday June 19, 2010 @11:27AM (#32625330) Journal

      By getting a $600 smartphone for $200 with a multiyear contract, we lock ourselves to vendor and can't leave them when they cut service

      I have found this is incorrect. If your provider changes the terms of your service agreement, you have the option of discontinuing service instead. To change the terms, they are basically terminating your current agreement and starting a new one. If you chose to leave, you should not have to pay an early termination charge because the provider chose to terminate the agreement.

      • by Bigjeff5 (1143585)

        you should not have to pay an early termination charge because the provider chose to terminate the agreement.

        However they may still attempt to collect it from you. At that point, you must sue, and you sadly must weigh the options: eat $500 or spend $5,000 so you don't have to pay $500. It's not a given that you'll get you $5,000 back if you win, though the threat might be enough to make them back off.

    • This is how telephony providers have operated since day one. From a technology perspective the advances they've made are quite stunning, but they don't benefit you as an end user at all, every single advance is aimed at providing more profit for the telco while giving you less bandwidth.

      Your average phone call now is digitized within a few hundred meters of your front door, multiplexed and shoved down digital circuit multiplication equipment (DCME) where they make use of the space while you are listening to

  • This is BS. This is nothing more than an excuse for Verizon to squeeze more money out of customers. I am getting frakked in the the a$$ by Com-Xfinitysucks-castic by ridiculuous price increases and equipment fees. I pay over $100 a month for 1.5 mb download and digital basic tv, and that's WITHOUT HD. If I want HD, I have to pay an additional $40 per month plus an upcharge on an HD box. Now Comcast just forced me to get these stupid DTA boxes which eliminate the ability to get any free HD channels and
    • Re: (Score:3, Interesting)

      by hedwards (940851)
      Ouch, that must hurt. I'm paying roughly half that for a 6mbps connection. I've personally had a lot of good luck with DirecTV and Qwest. Earthlink wasn't too bad for DSL, but whatever route you take, you're pretty much guaranteed to give money to either the cable company or the telephone company for internet. There's just no meaningful competition.

      Around here, you drive around and you see a huge number of satellite dishes popping up. I guess it turns out that people were sick of paying for channels that
  • 'The more bandwidth that you make available, the faster it will be consumed,' said Craig Moffett, analyst at Sanford C. Bernstein & Co. in New York.

    Is this dude proposing that limiting the bandwith to will make it last longer?

    • Re: (Score:3, Funny)

      by hedwards (940851)
      Yes, and he's correct. Bandwidth lasts infinitely if nobody uses it. I say bravo on the courage to piss off your customers and chase them to the competitors. It takes real guts to preserve bandwidth in such a courageous way.
  • The whole idea of "unlimited" was to see how folks in the real world would use the system. Now that there are a few years of data collected, they will cut the pie into the most profitable tranches, and charge accordingly. Think airline tickets, where the business traveler paid 4x what you paid because you booked last year. Do you think AT & T and Verizon ever play a round of golf together to discuss these things...naah.
  • Two comments (Score:5, Interesting)

    by c0d3g33k (102699) on Saturday June 19, 2010 @10:46AM (#32625102)

    First: Contrast the behavior of big companies like Verizon who consistenly reduce their level of service with that of companies like Linode, who consistently increase the level of service offered to their customers for no additional charge: http://blog.linode.com/2010/06/16/linode-turns-7-big-ram-increase [linode.com]. THAT is how you ensure customer loyalty. Sometimes squeezing every last penny out of customers isn't the best way to do business.

    Second: When I purchased my smartphone, I didn't like being forced to purchase the "unlimited" plan for $30/month. Since the phone has WiFi and I'm usually near a WiFi access point, I was willing to rely on that to save some money. Instead I had to drop a second phone from the plan so my monthly bill didn't increase too much. If their new data plans include limitied but reasonable data allowances for a lower cost, I'm actually ok with that. The real problem is that it seems many (most?) current smartphones don't easily allow 3G to be disabled until needed. Or deprioritized with respect to WiFi - eg. Use WiFi preferentially when in range, only fall back to 3G if necessary and only for the apps configured to do so. (Note I say *easily* - I know data can be turned off but it's a PITA. The normal state is "data always on".) Given that these devices are constantly accessing the network, if simply having the phone on with data enabled puts people in danger of incurring overage charges when using the standard plans, they (Verizon) did it wrong. The new plans should take "normal" use into account, be less expensive than current plans, and provide reasonable options for heavy data users. Then this move might actually be a good one, benefiting everyone.

    • Your first example would be germane if your comparison was with some small company that provides last-mile internet service, because a cellular provider's infrastructure is expensive and very spread out, a data center is far more manageable.

      Unfortunately, when you get to be a top dog, they can't increase profits by growing as they used to, so they look for other ways, such as lowering costs. I think your suggestion is better, but Verizon has to please their stock holders than their subscribers.

    • by Bigjeff5 (1143585)

      Second: When I purchased my smartphone, I didn't like being forced to purchase the "unlimited" plan for $30/month. Since the phone has WiFi and I'm usually near a WiFi access point, I was willing to rely on that to save some money.

      My local carrier is actually trying that: For a month they are giving away a Blackberry with every new contract (I know, still a contract, but it's a free BB), with no data plan required. If you don't have a data plan, you simply won't be able to connect to the internet via the cell network, otherwise all Blackberry features will be available when connected to a wifi network.

    • Re: (Score:3, Interesting)

      by Floritard (1058660)
      Netflix is a great example of this. I just love the company. My girlfriend has been a member for years now. They recently added support for streaming on my PS3 and more recently the Wii. No additional charge for this. They even sent us the disc for free. Then we just decided to cut back from having 3 discs out at once to having just the 1. We still get the streaming option with this plan. So really we've started giving them less money for, arguably, more service as we don't even have to wait for the mail no
  • Honest question (Score:3, Insightful)

    by Nikker (749551) on Saturday June 19, 2010 @10:48AM (#32625112)
    I have never been involved in ISP grade networks and I pose a question to those more knowlegeable in the field. Have we hit the proverbial wall in terms of bandwidth? Is it possible (once last mile is satisifed) to have a somewhat reliable 1000mb low latency connection into every home or is this something that is limited not by finance but by some other principal? Lastly can any one provide an approximation where large ISP's are today in terms of backbone connections and maybe some hints of the major bottlenecks (aside from last mile) that is being encountered?
    • This doesn't really answer your questions, but ISP's can't provide reliable & fast service at today's prices because it eliminates their opportunities to charge customers more and more every time they provide an incremental increase in speed. They need to be able to raise your rates for improving your speed by a few Mbs here or there. If they don't they'll never be able to charge $250 a month for 100Mbs service.

      I have Optimum Online 'Boost' service which costs me $60 per month. It's pretty fast: 17Mb [speedtest.net]
    • by AHuxley (892839)
      Nothing has been hit, its just making the public feel it has.
      Then they can milk them with fancy new tech sitting on the same rust belt tech.
      They also want to segment the market with pro and business class plans.
      The optical is in the ground, paid for and they know exactly the quality of their networks is and profit projections.
      You could have a connection into every home in cities and suburbia, the problem is that if you as a telco roll it out, you may have to *share*.
      So no rolling out until the politica
  • by nurb432 (527695) on Saturday June 19, 2010 @11:05AM (#32625206) Homepage Journal

    Everyone else is doing it, so why wouldn't they? Just like the bad old days ( for those that remember it ).

    I still think this was the intent all along. Make it 'free' long enough for people to start relying on having data available, introducing even more bandwidth hog services, then after it will be hard for most to back off, start charging "per use" again. They are no better then drug dealers, except they get away with it.

  • I can understand why people don't like the elimination for unlimited plans, but I feel like it's for the best. The problem is that an "unlimited" plan is always a lie, always. It's never really unlimited. So-called unlimited plans (on phones, ISPs, etc.) are usually limited by having a secret cap hidden in the fine print, arbitrarily kicking off people who use "too much" in the companies opinion, imposing arbitrary limits on what sorts of connections you can make (i.e., you can only browse the web), e

  • Isn't it generally good if the "all you can eat" plans are replaced with pay-as-you-go, because that favours those who hardly use it at all, at the cost of those use who it to download 1 trillion movies a week.

    It *is* possible to have something like a very reasonable 0.01p per gigabyte plan. Just because it's pay-as-you-go, that doesn't mean prices have to be extortionate, or even worse overall than the 'unlimited plan.'

  • by barfy (256323) on Saturday June 19, 2010 @11:57AM (#32625502)

    Unlimited Data ultimately means that VoIP wins and the entire pricing structure for cell phones is over.

    Cellular "minutes", must still be worthwhile or cell carriers are over.

    This will be a big hit for mobile internet radio.

  • by hpa (7948) on Saturday June 19, 2010 @11:57AM (#32625504) Homepage

    The monopoly telephone companies have always been obsessed with getting users to pay by the usage unit, even when flat pricing made them more money. It does seem to reflect their thinking more than profit maximization; one possibility is that they have a vastly exaggerated notion of the inadequacies of their own plant, or alternatively they are suffering from lottery-style thinking -- the executives have happy dreams about the poor sucker who left their phone connected and got a $10,000 bill.

    In the USA, at least, flat-rate long distance did not become common until it got to be way too easy to bypass the monopolists.

  • by bl8n8r (649187) on Saturday June 19, 2010 @11:58AM (#32625516)
    I find it hard to believe that millions of people having one or more computers capable of downloading movies, ISO images, Youtube, music streaming, gaming and emailing 50MB attachments in their homes can pay a flat rate for internet access with unlimited bandwith but the same people trying to view some pics or webpages on their mobile phones are causing "explosions in data traffic". Smells to me like someone is fishing for something to pin cost increases on. Frickin crooks.
    • Re: (Score:3, Informative)

      by Bruha (412869)

      Verizon Corporate has consistently lost money over the last decade, the only reason they're profitable is because of the money they bleed off Verizon Wireless. If Verizon Wireless had been a separate company it would of been a gem on the NASDAQ. Same goes for AT&T wireless, AT&T bleeds the wireless division to maintain it's failing business models.

  • by ewieling (90662) <eric&fnords,org> on Saturday June 19, 2010 @12:28PM (#32625742)
    I don't know what kind of "unlimited data plan" Verizon Wireless is talking about. They do not currently have and, as far as I know, never have had an unlimited data plan for "air cards" (USB dongles). Originally their "unlimited EVDO service" had a 5GB/month cap. If you exceeded that cap they terminated your service. You could not appeal. This happened to me. After the the class action suit (bruoght in California, I thing) they sent me a refund for the money I paid for the card. As I understand it the court ordered them to stop using the term "unlimited". Then they went to a throttled model where they would throttle your service speed back if you exceeded your 5GM/month limit. I did not have service at that time so I did not personally experience this. Then they stopped throttling and just billed you for over usage. US$70 for the monthly service (5GB included), then about US$250 in overage fees for the next 5GB of data. They still do this, but will now contact you if you get close to your 5GB monthly limit. How nice of them. I now only use my EVDO service when I'm at my weekend cabin. I Verizon is the only cellular provider with service at my cabin. My other options are dialup or satellite, neither is suitable for SSH. I would be much happier if 1) Verizon would stop lying and 2) their service cost US$70 per 5GB of overage.
  • Cell phone operators in the US domestic market live or die based on the principles and availability of price discrimination [wikipedia.org].

    Long story short, if carriers starting charging some flavor of reasonable rates that approximate cost (such as would occur in a perfectly competitive market [wikipedia.org] whereas what the US has more closely approximates an oligopoly [wikipedia.org]) then a majority of the high revenue corporate users who have $50/monthly data plans on their blackberries would all of a sudden be paying [perhaps] $5/month since t
  • I'm all for it (Score:3, Interesting)

    by obarthelemy (160321) on Saturday June 19, 2010 @12:44PM (#32625896)

    in theory

    I have Wifi at home, at work, and pretty much everywhere in between. So I barely need data. If there was a very cheap data plan, I'd take it. Right now, I have no data plan at all because it's too expensive for very little utility.

    Also, I don't object to heavy users of a scarce commodity (bandwidth) paying more than light users.

    That's assuming that telcos are investing sufficiently, and are not sneakily raising prices... but that's another issue, really.

  • Why all or nothing? (Score:3, Interesting)

    by istartedi (132515) on Saturday June 19, 2010 @01:56PM (#32626408) Journal

    Why just scrap the plans? Why not have a "hard transfer limit", and then pop up a Yes/No dialog on the phone that lets you know you exceeded the limit, and offers you per-minute rates for the remainder of the month.

    That's no different than "all you can eat" buffets. Those of us who simply want to get full shouldn't have that taken away just because somebody camped in the restaurant. In fact, that has happened, and I wager most if not all restaurants with "all you can eat" now specify a time period.

  • piffle (Score:3, Informative)

    by koan (80826) on Saturday June 19, 2010 @02:01PM (#32626444)

    so the 2 or 3% of users exercising their right to unlimited data (their right because they paid for that) are bringing down your network.

    Then your network is sub standard, try putting some money back into your network so you can grow your user base, because other countries (such as Finland) don't seem to have the problems that ATT and Verizon have with bandwidth.

    I'm at the point in my life that if *any* corporation is making a change, it's to screw me and make them more money while offering fewer services.

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