Verizon Hints At Scrapping Unlimited Data Plans

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.'"

Comments

Why not raise the price instead?

[YA_Python_dev]

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

Re:Why not raise the price instead?

[drinkypoo]

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:Why not raise the price instead?

[Anonymous Coward]

Because someone... somewhere... will actually USE the unlimited that they paid for...

And that would be bad for verizon.

And to put an actual real price on 'unlimited'. Would scare alot of people away.

Which would also be bad for verizon.

The big question is.... why do these stupid ass companys keep offering unlimited anything as just a tease to get you signed up?

It's always going to eventually screw over the customer in some way. Which creates some serious ill will.

Which is also bad for verizion.

Re:Why not raise the price instead?

[hedwards]

I'd like to see a citation as well. Considering the way that the iPhone and iPad function, I can't imagine him being opposed to anything other than the term. As those products use an excessive amount of bandwidth. If you're going to use those devices as intended, you're going to burn through a huge amount of bandwidth, that's just the reality of it.

Re:Why not raise the price instead?

[westlake]

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 real cost of providing "unlimited service" to make the investment worthwhile.

Re:Why not raise the price instead?

[nurb432]

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

Re:Why not raise the price instead?

[Majik Sheff]

Who are you to decide what someone else deserves? Unless you are a voting shareholder you have no valid opinion on the matter.

Re:Why not raise the price instead?

[tsm_sf]

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".

Re:Why not raise the price instead?

[WrongSizeGlass]

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

If you're a hooker those two are one and the same. I'm just sayin'

Re:Why not raise the price instead?

[Anonymous Coward]

Yes because nobody is allowed to have a valid opinion otherwise.

You might might not value someone else's opinion unless it fits your arbitrary little criteria of
who matters but others might. Thats like saying someone cant have an opinion on the war in Iraq
unless they are taking part in the fighting. Most executive bonuses are stupidly excessive and
definitely not deserved.

Re:Why not raise the price instead?

[commodore64_love]

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.

Re:Why not raise the price instead?

[drinkypoo]

Who are you to decide what someone else deserves? Unless you are a voting shareholder you have no valid opinion on the matter.

I'm entitled to my opinion, and so are you.

Re:Why not raise the price instead?

[laughingcoyote]

How about if I'm a "voting customer", who will happily take my money elsewhere if someone tries to screw me?

And if there are so few choices and they all (in reality or in fact) collude, by making changes in lockstep, that's exactly what regulation is for. So no, it is not only shareholders who have a vote-ultimately, the public can veto anything the shareholders decide, through exactly that mechanism, and that's much more likely to happen if the company makes people unhappy on a regular basis and does not respond to negative feedback by scrapping or changing what it planned to do. The ability of those shareholders to be shareholders with highly limited liability is the result of a corporate charter granted by the government, and thus also the people. If the company starts to abuse that charter by utilizing a large market share to charge more and offer less, the people have every right to modify, limit, or revoke that license to operate with limited liability, and to define boundaries outside of which the company may not step.

It absolutely sickens me to see "No, just shareholders! Shareholders! Screw the customers, the employees, and the public!" Giving customers something they'll want to keep even when their contract is up, keeping employees happy so they will stay long-term, and maintaining a good reputation with the public are all part of the long-term viability of a company. You're ultimately hurting even the shareholders when you piss them all off for a short-term quarterly boost.

Re:Why not raise the price instead?

[ChairmanMeow]

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.

Re:Why not raise the price instead?

[_KiTA_]

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.

Re:Why not raise the price instead?

[commodore64_love]

>>>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.

Re:Why not raise the price instead?

[Anonymous Coward]

You say excessive. I say perfectly reasonable in 2010. Not my fault that the telecoms didn't invest in infrastructure.

Re:Why not raise the price instead?

[ChairmanMeow]

And that's what I plan to do after the contract expires in August, but the article is about Verizon after all. Plus, considering the nature of the telecom business, how can you be sure that that deal you're being offered is going to stay the same, or that the company that's offering it isn't going to be bought out by a company like Verizon? When I signed my current contract, it was with a different company that during that time was bought out by Verizon.

Re:Why not raise the price instead?

[kryptKnight]

implicit/tacit collusion isn't just legal, it's an inevitable feature of oligopolistic competition.

Re:Why not raise the price instead?

[Majik Sheff]

Unless you are a voting shareholder, your opinion is worth exactly zero to the people deciding executive pay. It has nothing to do with what I or anyone else thinks about your opinion.

Oh, and I've decided that your pay is excessive and should be capped at 10% above the poverty line. Any more that that is an obscene display of decadence.

Re:Why not raise the price instead?

[Majik Sheff]

For what I think is the first time ever, I agree with you.

Re:Why not raise the price instead?

[dgatwood]

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:Why not raise the price instead?

[Majik Sheff]

I'm glad you 'get it'.

If you don't like the way a company is run, give your business to a different company. If there are no companies that behave in what you consider to be an ethical manner, either go without the product in question or get out there and start your own company.

This is still the land of opportunity for anyone with the guts to risk it all.

Re:Why not raise the price instead?

[Golias]

I find your ideas intriguing, and would like to subscribe to your newsletter.

Re:Why not raise the price instead?

[Anonymous Coward]

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.

Well you can get a prepaid cell phone for a tenth the cost of a months rent, and it is essentially a sunk cost. How much does it cost to rent a shitty little hole in CA? 1000 to 1500$ a month? This isn't really a choice between a phone and a home. This is a choice between having a phone or not having one. The home choice was made for them when they lost their jobs.

Re:Why not raise the price instead?

[Macrat]

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.

Re:Why not raise the price instead?

[dfghjk]

"Considering the way that the iPhone and iPad function,...those products use an excessive amount of bandwidth."

In what way does the iPhone/iPad function that causes it to "use an excessive amount of bandwidth"? It's bandwidth usage is no different than other devices. It's users may be different.

Re:Why not raise the price instead?

[Anonymous Coward]

If you don't like the way a company is run, give your business to a different company. If there are no companies that behave in what you consider to be an ethical manner, either go without the product in question or get out there and start your own company.

And as a shareholder, I'm pissed that VZ is doing this.

Charging by the kilobyte was something from the monopoly AT&T days, along with leasing your phone. Back in the day, because it was AT&T's copper, and you rented your phone, you couldn't even hook up a modem to the phone line. The 110-baud acoustic coupler was a workaround - and AT&T fought it. They ended up losing a few court cases, and the rest is history. Even though they were still a monopoly, you could buy your own telephone (or modem!), and plug it into their network.

Thus began BBSes on the non-UNIX side of the world, and things like uucp and USENET on the UNIXy wide of the world. Generations of geeks bought dedicated phone lines, and spent billions on computers. Nice spinoff.

Look at the state of application development on smartphones before the iPhone and the Droid. I refused to buy a smartphone for years, because there was nothing you could do on Verizon's (or AT&T's) wireless network beyond paying $0.99 to upload an MP3 that you already had on your own computer, or $2.50 to send someone a grainy photo. Cell phone manufacturers made great devices, and telecom vendors spent millions of dollars tearing out all the cool features and replacing them with shitty telco-vendor-locked-in apps.

New generations of geeks are buying neat devices, and programming them, and coming up with ways to make VZ's communications network more valuable. And VZ appears to be saying "Fuck all that! We'd just rather the world stuck with voice calls and txt messaging! It was a slow-growth business in a saturated market, but at least we understood it."

Well, as a shareholder, it's my place to say to the Board "Gentlemen, fuck you!" When it comes to building shareholder value, I don't care about just the next quarter, I care about the next 20 quarters, and VZ's shooting itself in the foot. If you don't understand the future of wireless, get the hell out of the way, because either way, you're going to lose marketshare and pricing power to those who do. The only thing that can save the wireless industry from the same fate as the landline industry is a world in which bandwidth is (effectively) unlimited and unmetered.

Re:Why not raise the price instead?

[Blakey Rat]

Two companies in the same market, facing the same problems, decide on the same solutions... this is "collusion?" And not, say, "duh?"

I'm all for being pro-consumer, but at least try to do it intelligently. The ATT plan is cheaper for the vast majority of their customers... for those who need more data, they can pay for it a gigabyte at a time. It sounds fair to me, frankly, and I also don't understand the frothing-at-the-mouth over the change.

Re:Why not raise the price instead?

[Pherlin]

In the case of a buyout, or even if the company you're with is the same company, If anything changes with regard to your contract there is a period (I believe 30-60 days) during which you can say "I don't agree to these new terms, I want out of my contract" and you cannot be required to pay the penalty, because it's NOT the same contract you agree to.

In fact, when this happens, you are supposed to be notified in writing of the change.

Re:Why not raise the price instead?

[UnifiedTechs]

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

If you're a hooker those two are one and the same. I'm just sayin'

Actually wouldn't a hooker want to screw the customer as LITTLE as possible?

Re:Why not raise the price instead?

[xushi]

Sadly that's besides the point, has no real value, and will not change anything....

Re:Why not raise the price instead?

[Anonymous Coward]

#1 - bums making poor purchasing decisions is a shameful justification

#2 - the fact that bums can afford cell phones means the market is probably just fine

#3 - "i want it really bad" is not the same as need. the service isn't free to provide, so the people prescient enough to get the service provided get rewarded. too fucking bad for you, go live in europe if you want nationalized bullshit. i'm sure they'll love your lazy ass.

Re:Why not raise the price instead?

[Shakrai]

How about if I'm a "voting customer", who will happily take my money elsewhere if someone tries to screw me?

Am I the only one that refuses to pay $30-$45 a month for the privilege of having a "smart" phone? I look at from two different vantage points, A) I'm not paying [mega-corp] the same amount of money for 5GB as my unlimited cable modem connection costs, B) If the matter is truly important whomever needs to reach me can just call me.

I've set up numerous smart phones for co-workers of mine and I'm not convinced that they actually increase productivity. They are a neat toy for looking shit up on the go but Google SMS is sufficient to look up the information (weather, phone numbers, addresses) that I need most often.

Re:Why not raise the price instead?

[Znork]

IF they can get it to $7, $10, or even $15, it's even better.

If? They, like every other person on the internet, have full control over how much data gets sent to you. If they want you over your limit they can put you over your limit. Basically, transfer caps with overcharge gives them a revenue source that is completely in their control.

Re:Why not raise the price instead?

[Anonymous Coward]

Who are you to decide what someone else deserves? Unless you are a voting shareholder you have no valid opinion on the matter.

I'm entitled to my opinion, and so are you.

No, that's simply wrong. To quote Harlan Ellison, who said it best: "You are not entitled to your opinion. You are entitled to your informed opinion. No one is entitled to be ignorant."

One of the best things about the Internet is that it's possible to become informed, should one so desire. One of the worst things about the Internet is that so few care to do so, yet feel compelled to speak regardless.

I'd like to state that this isn't intended as a personal attack, but rather, an attempt to point out that the belief that anyone is entitled to any opinion, simply for its own sake, without knowledge, reason or defense, is not subject to thoughtful discourse, nor criticism by others, and so cannot ever be changed by such.

It's zealotry at its worst: "My opinion, and yours, are equally valid, for everything, regardless."

Re:Why not raise the price instead?

[commodore64_love]

>>>government-founded nonprofit orgs

  Yeah that's what we need - another monopoly. Because they work so well (amtrak, the nearly-bankrupt post ffice, the govt schools, Comcast, Microsoft). I want CHOICE and by creating a monopoly you've taken that away
.

Re:Why not raise the price instead?

[leenks]

In the UK the new iPhone tariffs (and other mobile broadband deals too) will be unlimited browsing. For values of unlimited = 1GB. Quality.

Re:Why not raise the price instead?

[laughingcoyote]

Erm, that's the opposite of what I said. That may work in markets with low barriers to entry and large numbers of genuinely different competitors, but there are fewer and fewer of those. For the most part, barriers to entry are high, and most people have access to one giant quasi-monopoly, or maybe a few giant oligopolies. Regulation absolutely has its place there.

If you want to regulate in such a way that meaningful competition is allowed by lowering the entry barrier, such as mandatory linesharing at reasonable rates, I'm actually alright with that. In some cases, that may even be a better case than direct regulation of what the existing players may and may not do (though even then, there probably have to be some "lines in the sand").

But no, overall, it's not the "land of opportunity" for whoever says to themselves "All the cell companies suck. I'll go do better than all of them." I can't go do that, even if my idea really is superior to anything they're doing, because the barrier to entry in terms of initial cash required is so high. Can you?

Re:Why not raise the price instead?

[mysidia]

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

Which is not a normal method of billing a metered internet connection, it is highly irregular. Typically when you buy a connection from an ISP, you and the ISP commit to a certain data rate, the commit, pay this much a month, and the ISP commits to provide you the entire data rate 24/7.

(Or) there actually is a common scenario where the ISP only commits to a certain data rate X hours a day or X days a week. So an Enterprise might commit to 1M during the daylight hours, and 10M during evenings, for backup operations.

Of course a 24/7 100 megabit committed connection is very expensive, much too expensive for home users. Most small businesses would buy a CIR of say 1 megabit, burstable to 10 megs, or just buy a crappy DSL connection which provides no guaranteed rate ("10 megabit DSL is not a 10 megabit commitment").

Further, if you kicked all those users off your service tomorrow, you wouldn't lose that much money.

That is debatable. Who are those users? How many people will they tell about their experience?

How many people will they not refer to you, or tell to avoid your service?

Many of these high bandwidth users are computer savvy folks, computer scientists, and engineers....

How many products will they NOT create that would make your service look more attractive?

How many congressmen will the people you kicked off whine to, and write articulate persusaive letters to demanding more (costly) regulation of the Wireless broadband industry?

The ultimate cost is a bit difficult to quantify.

It makes sense to build better infrastructure so you can keep and retain customers who will buy your services at a profitable rate.

There should be a fair answer that uses technology to make access to your network fair enough for you to avoid kicking anyone off, giving anyone a poor experience, or charging outlandish fees.

Re:Why not raise the price instead?

[mysidia]

I'm a customer. I have ample reason to decide what we deserve. Or else I'll be taking my business elsewhere.

Or building a competing service....

Re:Why not raise the price instead?

[HereIAmJH]

In what way does the iPhone/iPad function that causes it to "use an excessive amount of bandwidth"? It's bandwidth usage is no different than other devices.

You have to consider the technology that was in use when these 'unlimited' plans were created. Cell phones with a 2" screen browsing WAP web sites. Now you have devices that can stream movies from Netflix and they're worried that their networks are going to be overwhelmed.

The problem isn't that they are looking to limit bandwidth, it's that they keep trying to sell 'unlimited' plans that aren't unlimited and they aren't picking reasonable limits for their new 'limited' plans. Back in the days of dial-up internet I knew people that signed up for $10 'unlimited' dial-up plans and then stayed connected 24 hours a day. The ISP couldn't pay for the incoming line for $10 a month, so how could they provide unlimited access to any given user at that price?

Cell phone (and cable) ISPs are having the same problem. Some marketing moron said "we'll out do the competition, we'll call our plan Unlimited". If they had set a reasonable limit and raised it as technology improved no one would be complaining. Nobody complains that cable internet was 2mbit when they signed up 10 years ago and is pushing 14 or 16mbit now. The problem with AT&T's plans are that 200 meg is a joke, I used more than that just getting my new Droid set up. And 2g is nowhere near what a heavy user will be looking for. If, OTOH, Verizon discontinues their unlimited and replaces it with the 5g limited plan they are selling for tethering, most people won't care. (They are the same price) From there they can pick up PR wins by increasing the base limit as technology improves.

Re:Why not raise the price instead?

[tompaulco]

Because all of those things that will be "bad for Verizon" will be bad for them two or more quarters down the road by which time the highly paid executive who made that decision will be long gone having been given a stupendous bonus for his extreme shortsightedness and then a huge package upon his leaving because of the companies gratitude to him.

Re:Why not raise the price instead?

[Anonymous Coward]

"Further, if you kicked all those users off your service tomorrow, you wouldn't lose that much money."

Customers also pick unlimited data rates because they want fixed billing. Some months have little usage, others have a lot. I want my bill to be the same, even if I lose money.

Verizon loses the customers in this subcategory within the unlimited plan. That's a lot of potential customers.

Also, don't underestimate customer service. Most companies have absolute shit for customer service. When I see unlimited plan, I also see no fuss. When I see price tiering based on usage, I see fuss; calling customer service, being put on hold, fighting about there's no way I downloaded some ridiculous amount of data. Hell no, that'll suck more money away from me in terms of valuable time and increased stress and aggravation. This is also why many people overbuy their voice minutes, or buy prepaid (hits a fixed hard limit). Verizon and AT&T are hoping to gain more money by reducing usage--keep the long term contracts, get the extra dough from the overages since there is no hard limit, and people will self-limit to reduce overpaying.

Customers, in turn, will avoid these companies and go to competitors. Speaking of which, your near absolute statement that Verizon will save money or what have you is wrong, because it's stated in a vacuum. You can't just throw statements like this as some near absolute unless you give some consideration to what the competition is or has. That's part of the economic ecology--there is competition that fosters growth and changes to the industry.

AT&T, by backing out of their unlimited data plan reduced pressure on Verizon. What this means is that this will come down to who has the best overall speed and plans (cost per data size).

In the long run, changing their plans may mean customers will move away from long term contracts, change the unlimited data war to a cost per data war (see how that worked out for long distance companies), and push people to companies with unlimited data, like Sprint has now.

I'm happy AT&T and Verizon did this. There is less pressure on infrastructure rollout, which means they WON'T be doing such infrastructure rollouts, allowing smaller companies with less network buildout (Spring, Tmobile esp. if they'd get off their asses) to catch up.

Lowering the competition bar is a rather stupid thing for them to be doing. Just means the competition has less of a hurdle to kick your ass closer in the future.

Re:Why not raise the price instead?

[DavidShor]

I would argue that executive pay is wildly inflated due to a cozy "good old boys" network where CEO's get to appoint the people in charge of setting their own salaries. Due to the realities of how corporate voting works, small shareholders have very little ability to complain or change things. Large Shareholders are themselves part of the network that benefits from this system and usually don't rock the boat. This allows them to secure producer surplus that would otherwise go to workers or consumers.

.

This has been a large reason that median wages have been stagnant even as productivity has increased. The workers have gotten more productive, but all of the gains have gone directly to the top. And this has had macro-economic consequences. A flood of money caused financial market instability, and consumers turned to borrowing en-masse in order to maintain their standard of living. This can be considered a major cause to our last recession.

So yes, I have every right to care. We don't live in some Econ 101 fantasy where the costs of one's actions is entirely borne by oneself.

Re:Why not raise the price instead?

[osgeek]

And this is why I keep saying that widespread telecom infrastructure can feasibly be operated only by government-founded nonprofit orgs.

How does "government founded nonprofit org" belong anywhere near something as rapidly evolving as the telecom industry?

Sounds like a heck of a plan to completely put the brakes on ever seeing the industry advance again.

The government's involvement should be limited to preventing and dismantling monopolies in the marketplace.

Re:Why not raise the price instead?

[jc42]

I'm a customer. I have ample reason to decide what we deserve. Or else I'll be taking my business elsewhere. Or building a competing service....

No, you won't. Sure, you can pull up your roots and move elsewhere. But you'll find that the local comm service there is controlled and regulated in the same way. There will be only one or two legal comm suppliers, and unless you have the money to "persuade" a majority of the legislature there, you won't break into the business.

It's been like this since the days of the first (telegraph, telephone) comm services. What makes you think you can change it? Do you actually have enough money to buy into the regulatory structure? If so, what are you doing reading slashdot? Get busy. Buy out the regulatory system and change things. We'll all know when you succeed.

Re:Why not raise the price instead?

[Anonymous Coward]

There will be only one or two legal comm suppliers, and unless you have the money to "persuade" a majority of the legislature there, you won't break into the business.

Then you can find a way to setup an illegal pirate comm supplier, and do covert things to make the legal comm suppliers' services stop working.... if you know what I mean.

Re:Why not raise the price instead?

[Anonymous Coward]

presuming they can stop buying their execs yachts and cocaine

If only it were that simple. These companies *REALLY* do not understand their customers. They and I say this with all seriousness *BELIEVE* that everyone *WANTS* to pay them. They seriously can not understand that people do not want to just hand over their entire wallet over to them to pillage thru. You think I am kidding. But I have spoken with these 'higher ups'. They really do not understand that they are being stupid. They truly can not understand it. You may think I am kidding. If someone had told me this say 2 years ago I would have thought they were messing with me. I am not. They honestly do not understand their customer. They are so out of touch they do not understand. You quite literally have to drag them into customer meetings after customer meeting where customer after customer tells them 'you sell over priced shit'. *THEN* they start to see it. Even then they only grudgingly accept it but still fight it every inch of the way.

If you saw the organization from the other side you may understand it. But these guys are not money grubbing bastards. But just so doped up on their own kool aid they can not see they are strangling the very market they should be cultivating.

Re:Why not raise the price instead?

[gumbi west]

Interesting conspiracy theory, I think you are totally wrong but put your finger on the right idea.

I'll bet that it two years we are back to unlimited data, but the companies didn't build to handle 3G data with people downloading several GB each. What they want you to do for now is do everything but DL movies on their network and then DL movies at home.

Just growing pains of managing these huge networks that grew faster than anyone predicted.

Re:Why not raise the price instead?

[drinkypoo]

It's zealotry at its worst: "My opinion, and yours, are equally valid, for everything, regardless."

I think that if you reread my comment carefully you will find that I have said nothing of the sort, although I admit that it was intended to be deceptive. In any case, see sig.

Re:Why not raise the price instead?

[Anonymous Coward]

I suppose the difference here is who gets off.

Re:Why not raise the price instead?

[xmundt]

Greetings and Salutations.
          One question that has been bubbling around in my mind ever since the interview with the CEO of Verizon where he was ranting about "unlimited" users and how they were abusing the network, is this: What percentage of Verizon's network resources ARE being burned by "abusers"? Is it a case where 3% of the users are burning 60% of the network capacity? I have yet to see any hard numbers on that. At one time, I thought my usage of about 30 gig a month was pretty big. However, I have seen other postings where people report that they use 7-10x that amount per month! makes me look like a piker!
          regards
          dave mundt

Re:Why not raise the price instead?

[dgatwood]

Yeah that's what we need - another monopoly. Because they work so well (amtrak, the nearly-bankrupt post ffice, the govt schools, Comcast, Microsoft).

The Post Office is struggling because they're competing with UPS and FedEx on the package front and the need for first class mail has been largely eliminated by the Internet. It was doing just fine until disruptive technology made it largely unnecessary. That's really the best you can hope for when it comes to any government-run company.

Amtrak was formed to do a job that the private sector wanted out of because it lost so much money. It was pretty much inevitable that they would similarly lose money. The only way that comparison would be relevant to a government-sponsored telco would be if cell providers were losing money. :-)

Government-run schools are not even similar. A bunch of politicians *running* anything is almost always a bad idea. Government works best when it spends the money to fund creation of an independent nonprofit corporate entity that does a particular task, then steps back and leaves the day-to-day administration to businesspeople who know what they are doing.

Comcast and Microsoft are for-profit monopolies, which are completely different than nonprofit monopolies. With a nonprofit or not-for-profit monopoly, all excess revenue gets rolled into R&D or infrastructure expansion/improvement. You really can't do any job cheaper than an effectively run nonprofit monopoly (assuming similar levels of R&D spending, that is).

I'll see your Post Office and raise you TVA. That's much closer to telecom infrastructure, and they're generally doing a good job, and doing it for a heck of a lot less than the commercial power providers do.

I want CHOICE and by creating a monopoly you've taken that away

Au contraire. What I propose is the government building the tower infrastructure and leasing it in a nondiscriminatory way to any company that wants to use it to provide service. This would mean that instead of two nationwide cell networks with halfway usable coverage, you would have dozens with incredible coverage. You would have far more choice if the government provides the underlying infrastructure because monopolies would inherently have negligible advantage over smaller companies.

Put another way, the only reason monopolies are so prevalent in the telecom world is that the infrastructure costs make competition unprofitable. Change the system so that the per-customer infrastructure costs remain consistent even if companies consolidate, and you've just eliminated a major roadblock to competition.

Re:Why not raise the price instead?

[dgatwood]

How does "government founded nonprofit org" belong anywhere near something as rapidly evolving as the telecom industry?

Rapidly evolving? The U.S. is at least a decade behind Europe in broadband availability, and they have... wait for it... government-owned telecom companies providing much of their infrastructure. I see no reason why cellular service would be any different than wired telecom in this regard.

The government's involvement should be limited to preventing and dismantling monopolies in the marketplace.

That's fine. Dismantle AT&T and Verizon. Now we go back to the mess we had in the 90s where every little area of the country is owned by a different company and you start paying extortionate roaming fees as soon as you travel a hundred miles in any direction. Either that or you end up with spotty coverage because you've given half the cell towers in the area to a different company. Either way, there's just no way to break up those companies that wouldn't do far more harm than good.

If we want competition on a nationwide basis, there's only one way to do that, and that's for somebody to fork over the money and build at least one more nationwide network. So as long as we're doing that anyway, it might as well be a government-owned nonprofit that sells low-cost service to dozens of MVNOs. Then, in effect, we get dozens of nationwide networks for the price of one....

Re:Why not raise the price instead?

[dgatwood]

Not the point. The point was that it's so important that even a lot of people who can barely afford food have one, which means it's pretty darned important. And the fact that they don't have a land line makes it doubly important for them. Thus, cell phone service is a critical service that ranks right up there with power and water when it comes to the needs of our nation in the 21st century.

Re:Why not raise the price instead?

[BigSlowTarget]

AT&T made 10% of its revenue in profit last year. If they were to spontaneously give their customers back 10% of their payments the company would be non-profit. I'll buy that they'll charge more wherever possible and that their executives make more than they should, but there is no way a government agency could enter the market, build up the expertise and operate the infrastructure under current government mandated operational policies (including billing and oversight) for any less. You would either have to steal the infrastructure from the current owners and give it away or extort subsidies through excessive licensing pricing. You would be awarded by a host of non-profits (headquartered most likely wherever senator xyz received campaign contributions) that 'ran' the infrastructure by soliciting bids from for-profit contractors and outsourcing firms. Even better, they would be dedicated to making sure every nut-job living in a cave in the middle of nowhere had 5MB/s service available before they upgraded heavy use areas to 6MB/s.

As for cell data being the same as cell voice, the ability to dial 911 for emergency assistance is and always will be more important and morally justifiable than watching a movie on your phone. As I recall, many phones can reach emergency services even when not on a paid billing plan. People choose to buy illegal drugs instead of a roof all the time and that does not prove heroin is an essential part of human society.

I suspect this issue will be self resolved within three years. If infrastructure carriers start demanding ridiculous pricing for data then alternate methods of providing service will start to pop up and it will not go well for those carriers. Their infrastructure is a blessing and a curse - it's quite valuable but subject to becoming obsolete. If they price things high enough they will find they hold the in-house copper wiring of the 21st century.

Re:Why not raise the price instead?

[LBt1st]

Another simple truth is that if you sell a metered connection, some users will simply leave.

Maybe I'm getting old but we've already been down this road. ISP's back in the day all charged by the minute/MB and they all either switched to selling unlimited plans or got crushed by those that did. Nobody wants to have a meter ticking away while online.

And to anyone who responds with, "Well get used to it because they're all going to do this.", I can live just fine without the service of any of them.

Re:Why not raise the price instead?

[dgatwood]

AT&T made 10% of its revenue in profit last year. If they were to spontaneously give their customers back 10% of their payments the company would be non-profit.

True, but let's put those numbers in perspective. In just a single quarter in 2009 (ending in June), AT&T (the whole company, not just the cellular part) brought in over $30 billion dollars in revenue. If your percentage is right, then we should be looking at what could be done with three billion dollars. Three billion dollars in profit rolled into more towers would build 20,000 additional cell towers, based an average cost of $150,000 apiece. The U.S. is about 3,537,441 square miles, so that's one extra cell tower for every 176 square miles across the entire United States. The maximum area a GSM tower can cover is about 1600 square miles, assuming you're not restricting the gain to cover a smaller footprint due to high population density.

Sure, I'm ignoring mountain ranges, the need for higher tower density in cities, the cost of power, the cost of maintenance, and lots of other variables, but the fact remains that if AT&T turned their entire profit into tower construction for a single fiscal quarter, we would not have cellular problems anywhere in this country. We would have 100% coverage from coast to coast.

Still confident the government can't do a better job for less money?

Re:Why not raise the price instead?

[teh kurisu]

Vodafone and O2 are actually being relatively up-front about the limited nature of their packages (in O2's case, starting on Thursday). It's Orange that are still labouring under the delusion that 750 MB constitutes 'unlimited'.

Re:Why not raise the price instead?

[Coren22]

The problem is that Verizon is not under the same pressure as AT&T, Verizon has been upgrading their network to handle the load, now all of a sudden, their competitor who was not upgrading their network and is now feeling the pressure has decided to limit people, and Verizon decides to follow along. The two biggest cell phone companies in the USA just did the same thing and you don't think this is collusion.

Re:Why not raise the price instead?

[Coren22]

What choice do you believe you currently have with cell phone providers? You have two Big networks, and many small networks. The two big networks are proving that they don't care about the customer and are making poor choices. What other choice do you have?

Unlimited already means 5G

[wesw02]

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.

Re:Unlimited already means 5G

[rolfwind]

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.

Re:Unlimited already means 5G

[Anonymous Coward]

Added to which 'unlimited' isn't _ever_ unlimited; it's always limited by device capability and carrier capacity anyway. There are limits to access embodied in the device you buy and the locations you connect from, and they cannot sell everyone unlimited access.

The illusion is that 'unlimited' was ever possible; ISPs in the UK have been discouraged from using the term.

Re:Unlimited already means 5G

[Anonymous Coward]

You are talking about data cards meant to be hooked up to a computer, which are capped at 5G. Smartphones on Verizon are currently unlimited, hence this article.

Pay attention or FUD less.

Re:Unlimited already means 5G

[Anonymous Coward]

At least you get 5GB. Here in Europe I've recently seen some ads for "unlimited" data plans on TV, while careful investigation revealed that after 300MB you get throttled to 2KB/s.

Re:Unlimited already means 5G

[hedwards]

I think most people assume that unlimited means that it's as much as the device can use. I don't think anybody seriously believes that they're entitled to more than the full capacity of bandwidth use constantly over the month. That would be stupid. But, any constraints that the carrier places beyond what the device can handle is fraudulent in my view. If they want to call it unlimited, then they damn well better not be putting in any limits that the device itself doesn't require.

Re:Unlimited already means 5G

[ScytheBlade1]

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.

Re:Unlimited already means 5G

[ScytheBlade1]

Sorry to reply to myself, but I thought I linked this.

http://www.intomobile.com/2007/11/03/verizon-wireless-when-we-say-unlimited-data-we-mean-5gb-worth-of-unlimited-data.html

While that article is just as good at trolling a subject line as the OP is, the part we care about is this:

And, should you exceed the 5GB/month limit on your “unlimited” plan, Verizon will “reduce throughput speeds of any application that would otherwise exceed such speed to a maximum of approximately 200Kbps” – with actual speeds “subject to change.

It remains functionally unlimited, and the same type of cap pre-5GB applies: connection speed. Just a different speed.

Re:Unlimited already means 5G

[hduff]

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.

Re:Unlimited already means 5G

[commodore64_love]

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.

Re:Unlimited already means 5G

[internic]

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.

Re:Unlimited already means 5G

[ukyoCE]

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:Unlimited already means 5G

[Anonymous Coward]

I haven't been fined the several times I've far exceeded 5gb. I've even exceeded 10gb (android app went nuts downloading, a big chunk of that 10gb was within 24 hours).

Smartphone plans are truly unlimited. Laptop and similar plans are not. Smartphone plans are advertised unlimited and it is delivered. Laptop and similar plans are advertised with 5gb caps. It's all on the website.

Re:Unlimited already means 5G

[Anonymous Coward]

Oh stop spreading the god damn FUD.

Smartphone plans are advertised with unlimited data and unlimited data is delivered. I have far exceeded 5gb on my smartphone multiple times without adverse effects (no bandwidth capping nor supposed fines). Everyone who perpetuates this lie has no fucking clue what they're talking about. When I discovered I was at 7gb for the month half way through the month one time (as indicated by my account, not my device), I went out of my way to test for a bandwidth cap and was pulling over 1mbit. I never, to this day, received any fines, notices, warnings, threats, or anything else telling me to stop it.

On the other hand, laptop plans (use of laptop cards and USB dongles) and tethering plans are capped at 5gb. THIS IS NOT IN THE FINE PRINT. If you look at the god damn website (vzw.com) and look up the laptop plans, the bandwidth caps are in BOLD. They go out of their way to tell you "this plan is limited." If you buy one of these plans expecting unlimited service, exceed the 5gb, and get punished, you fucked up, not Verizon, because you not only IGNORED the advertising, you didn't read your agreement. Don't give me that shit about "who reads agreements?" because that shit will get you in trouble so you damn well better read it.

Some years ago Verizon use to advertise unlimited data and place caps on it, punishing customers that exceeded it. Verizon, and other carriers that did the same thing, were sued and fined and were required to either provide the advertised service or stop advertising it as such. Oh hey! Consumer protection happened.

Re:Unlimited already means 5G

[Anonymous Coward]

I just checked my usage and it was 9GB last month on my Droid (which is hard for me to fathom, though I typically run with wifi disabled). This month (almost over), it's 4.5 GB. That's easier to believe because I've been doing some tethering this month, but it's still much higher than I had with the iPhone 3G. 3 months ago, I used 700 MB on the Droid.

Re:Unlimited already means 5G

[Anonymous Coward]

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.

Completely false, Unlimited data for smart phones is actually true unlimited. The 5gb cap is for data cards for laptops and perhaps tethering....

Re:Unlimited already means 5G

[bynary]

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 actually faster than Sprint's 4G.
Me: Great! Sign me up.

(I know what you're thinking: that should have set off warning bells in my head)

Signed up, took the air card home, and did some speed tests online. Expected: 2-3 Mbps. Actual: 730 Kbps. Two weeks later, after updating the firmware on the air card and trying two computers (Mac OS X and Win7), I placed a call to T-Mobile to cancel my service due to false advertising. After two customer service reps and a tech support rep, I finally got through to a "manager." Oh, and it turns out "unlimited" means 5 GBs and then they throttle your connection speed down to below half. And, it turns out, their new, faster 3G service isn't actually available in my area yet.

Me: I want to cancel my service without incurring the early termination fee because I was lied to by a sales rep in your store.
Mgr: It's not our store. They're an authorized reseller.
Me: (Rather irritated at this point) But they bear your logo. Regardless, T-Mobile ultimately sets the prices and dictates the terms of the contract. I want to cancel my service because what I was sold in the store and what I'm experiencing at home are two entirely different things.

(After lot of back and forth about network speeds, technical issues, pricing, contract terms and etc.)

Mgr: I can offer you half off of your termination fee or if you can get the store to take your equipment back we won't charge you any fees.

I got the T-Mobile/not-T-Mobile store to take the equipment back and canceled my service. T-Mobile is all kinds of FAIL, and I can only imagine what other wireless carriers dream up to sell to their customers.

Re:Unlimited already means 5G

[spire3661]

I get double limit on my Verizon Palm Pre. 5 GB of phone data and 5 GB of Mobile broadband hotspot. Ive called and confirmed (as much as can be confirmed with a company that cant properly place decimals, but i digress) that they are separate limits. I know they usually charge $40 for the hotspot but i happened to get it free during a promotion for at least the next 2 years. My wife got the same deal too so potentially i have 20 GB of mobile transfer for $60/month.

Re:Unlimited already means 5G

[Golias]

Reminds me a bit of this classic strip:

http://www.penny-arcade.com/images/2009/20090501.jpg

Re:Unlimited already means 5G

[Anonymous Coward]

uh.. charge more and get less? I guess I missed the part of my cable connection that is portable. I mean, as thrilling as the idea of having a giant spool of coaxial cable on the back of my car sounds, I think I'd be happier with a mobile data plan. Or perhaps you'd like to invest in a satellite, with uplinks, to connect you to your broadband connection at home. Its so cheap, everybody should have their own!

Re:Unlimited already means 5G

[Russ Nelson]

The article you link to is three year old, or should I say three years wrong. Talk to any Verizon reseller or rep, and they'll tell you "no such thing as unlimited, everything has a 5GB cap, and beyond that we charge you $.01KB."

Re:Unlimited already means 5G

[Pherlin]

Based on my experience with T-Mobile, they're the shittiest customer service out of everyone.

Protip: At the start of any dispute, research ALL Options. T-Mobile wouldn't budge on my issue until I filed complaints with both the FCC and BBB. The second I did both they were much more amicable to to providing a resolution that left noone happy, rather than just them.

Re:Unlimited already means 5G

[cbhacking]

I'm looking to switch carriers (off Verizon, TYVM) and was talking to a T-Mobile rep. Apparently, their "unlimited" plan works kind of like Comcast's Internet service; you get full speed up to 5GB/month, and then they throttle it back. Much though this idea annoys me, if it's a question between suddenly having slower Internet and suddenly having a vastly inflated phone bill, I'll take the slower service. It also technically holds to their "unlimited data for one fixed price" plan, unlike Verizon's offering.

Re:Unlimited already means 5G

[Anonymous Coward]

Really? I have an unlimited data plan and a Motorola Q9m. For 2 months I used it along with PDAnet as my only means of connecting to the internet. I used 12GB the first month and 9GB the second month. I was charged $0 additional fees.

Re:Unlimited already means 5G

[leenks]

In the UK, O2 is just about to start selling an "unlimited" data plan, with a 1GB cap... (with every subsequent GB costing 10GBP).

Re:Unlimited already means 5G

[HereIAmJH]

Based on my experience with T-Mobile, they're the shittiest customer service out of everyone.

I used to think that, then I signed up with Verizon Wireless. In less than two weeks I have already had a run in with them over a billing issue.

Irony is when your 'automatic' payment system requires manual payments because said 'automatic' payment system can't communicate properly with billing system.

Re:Unlimited already means 5G

[tompaulco]

Talk to any Verizon reseller or rep, and they'll tell you "no such thing as unlimited, everything has a 5GB cap, and beyond that we charge you $.01KB."
How come my bill says "unlimited monthly kilobyte" on it?

Re:Unlimited already means 5G

[tompaulco]

I hate phone companies. When I was out in the sticks, I got long distance service from AT&T and had a decent enough plan for something like 10 cents a minute and 15 cents a minute internationally. My first phone bill was about $500. I called and asked what was up, and explained to them that I was on such-and-such plan. They told me that plan was not available in my area, and so therefore they chose to put me on no plan at all, rather than call me back and try to talk me into some other plan. I told them that I had been sold that plan and that is the plan I wanted. They refused to honor the plan that their employee had sold me. The best they would agree to was to reduce the existing $475 worth of overcharges to only $225 worth of overcharges and then put me on a rate plan that was 50% higher than the rate they agreed to give me and had a monthly fee to boot. Unlike small companies like the one I own, apparently large companies do not have to honor the word of their employees and do not have to cover the cost of their employees making a mistake.

Re:Unlimited already means 5G

[Tran]

Funny, I have exactly the opposite experience. Verizon has had the worst service I have ever encountered. Can't speak to AT&T overall, but they gave us no gruff at all when we returned phones and canceled service withing their 2 week trial period when we discovered they had really bad coverage in the areas where it mattered most to us ( work, home, and the commute in between).
T-Mobile has had excellent customer service when adding or subtracting services, or when Billing questions arose (once in over 6 years with them now).

Re:Unlimited already means 5G

[Anonymous Coward]

"Just a different speed." A slower speed. Like, a speed LIMIT. As in, NOT unlimited. They limit the speed. They are limiting how much data you can transfer by LIMITING the speed. How in any rational world, is that UNlimited!?

Re:Unlimited already means 5G

[Coren22]

I think someone missled you. Unless you are talking about a data connection for a computer, the smartphone plans are unlimited, there are no overage charges for any smartphone plan. They seem to also give you unlimited texts, but I was unaware of this previously as I rarely use text messaging on my cell.

Re:Unlimited already means 5G

[Coren22]

Replying to myself, the above comments relate to Verizon smartphone plans. This is what this article is about, Verizon is rumbling about removing this plan and replacing it with a 5GB cap, if they did this to my plan, I would choose the breach of contract option and move to another provider...if there are any providers who still have these options.

No surprise

[name_already_taken]

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.

Re:No surprise

[rolfwind]

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 companies are never going to give up the status quo.

Re:No surprise

[Anonymous Coward]

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

SHOCKING INSIGHT. You do realize that Verizon is a business, right?

Go eat a bag of dicks, op.

Re:No surprise

[Concerned Onlooker]

"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.

Re:No surprise

[nurb432]

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.

Re:No surprise

[Overunderrated]

This isn't really surprising.

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

I hate to break it to you, but that's what customers are for.

Re:No surprise

[Bigjeff5]

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!

Re:No surprise

[jkabrahamson]

With all due respect isn't that the point of a business...making a profit? Every business views their customer as purely a source of profit. If they didn't they wouldn't be a business. You think McDonalds care's if you get fat from eating Big Macs? Of course not, that's why they fought legislation to put nutrition information on containers. You think Wal-Mart cares that they're lowering quality expectations in retail while putting people out of work? Not likely. I don't know of a lot of really successful businesses that don't view their customers as the source of profit. Viewing your customers as purely a profit source is called capitalism -- and for better or worse it is the most successful business economic machine in the history of the world. Don't take my word for it though, ask China. As to squeezing your customer basis, as a person who is dependent on their phone for their work, I'd be willing to pay more per month for an unlimited plan, but chances are unlike AT&T this isn't likely to happen for quite a while on Verizon. Keep in mind AT&T's woes are from the abnormally large amount of smart phone users that joined their network for the iPhone. They did it to themselves though, they forced you to buy a data plan with an iPhone. I know a lot of iPhone owners who rarely if ever use their "data" features of the phone and would be perfectly happy not having a data plan. Verizon could also probably do away with a lot of headaches not forcing smart phone users to carry data plans as they use to. My guess is due to contracts though, any of us that have had unlimited data from years earlier are likely to be grandfathered in provided we don't change our plans. I haven't changed my plan in over 2 years. My father-in-law was paying $12 a month for 250 minutes a month. He had that plan from when it was LA Cellular. I just added him to my family plan for $12 a month -- puts it in perspective, they're going to have a hard time changing the old timers.

Re:No surprise

[ScrewMaster]

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

SHOCKING INSIGHT. You do realize that Verizon is a business, right?

Go eat a bag of dicks, op.

You missed the point. They are also a communications service provider, offering services that more and more Americans are depending upon (landline use is falling in favor of cellular technology.) Furthermore, any communications company which simply goes about its business with no concern for the customer whatsoever is just begging for more regulation (why, for example, do you think that AT&T was even granted the original "universal coverage" monopoly? It's because that monopoly was in exchange for some serious regulation. The Feds were too smart back then to trust a major corporation very far at all.) Verizon is really pushing the matter: so, for example, are Sprint and AT&T. Operating in a businesslike fashion does not, intrinsically, include milking customers for every last dime just because you can. That's sociopathic behavior on the part of their respective corporate leadership. Period.

For the past year or so, I've had T-Mobile (which is nothing more than Deutsche Telekom, Germany's phone company) and I've been very happy with their plan, their service, and their billing practices (no stupidass extra charges for services my phone doesn't even support, no SMS spam, nothing.) Gotta figure the Germans would know how to run a complex operation efficiently. My understanding of their 3G data policy is that after ten gigs a month they shunt you down to Edge network speeds until your next billing date, although such policies change all the time. Not that it matters much to me: even with a little tethering on my laptop I've never pulled down more than 800 mb or so in a month (yes, I keep track of that.)

So long as the big boys keep screwing customers over providers like T-Mobile will keep taking them away. Look, there's an ongoing and increasing demand for mobile bandwidth, and these outfits either need to provide us with a service that supports the equipment they are selling to us, stop selling that hardware, or lose business. As of right now, I consider T-Mobile to be the most competitive and generally rational of the national cell phone companies. I've never been on Verizon (although I know some that are, and not one is happy with them) but AT&T and Sprint can stick it. Both pissed me off to the point where I switched, so if shafting your customer base is what your "shocking insight" is all about, it just goes to show that you don't know very much about how a real business operates. Verizon, Sprint and AT&T (well, ok ... SBC) are not businesses, they are extortion rings. Not that they're much different from the rest of corporate America, that's true enough.

Re:No surprise

[ScrewMaster]

"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.

Well, as irritated as I am at these outfits for their marketing drivel and false advertising, I tend to agree. But that's because I have some idea about what "bandwidth" means to me. I may pull down four or five hundred megs a month, so I'm out of your league but still I'm nowhere near my current cap of 10 Gb. I'm not sure what services are consuming so much bandwidth for so many people. Youtube, obviously, video services in general. Do some people spend all their time watching streaming video and download songs? I listen to streaming audio now and then using Google Listen on my Android phone, and tether my laptop occasionally, but I still don't burn through the kinds of bandwidth some people do

I think the problem here is one of perception. A lot of people (I'm going to go out on a limb here and say, "most people") don't have the slightest idea how to equate their phone usage with data consumption. They really don't. Consequently an "unlimited plan" gives them a sense of security that they're not going to get screwed by going over some arbitrary limit. The cell phone companies should understand that: they've spent a couple of decades training us to watch our minutes lest we get huge overage charges, but at least people understand how to account for minutes used. T-Mobile's approach (last I bothered to check on it) was to set up a "hard" limit of ten gigs and then switch off 3G and run you back to Edge speeds if you go over it. That way you don't lose connectivity (very important) and don't get a huge overage bill (also important.)

Verizon and AT&T want to go to tiered billing for the sole purpose of extracting the last penny from their customer's wallets. It's not about making a profit, it's about squeezing your customers as hard as you possibly can, and if your marketing people can dissemble sufficiently well, leave said customers feeling like they're getting a great deal. And if, because said customers don't understand what they're buying, the company makes some bucks on overage charges .... well, hell, that's just gravy.

Weasels.

Re:No surprise

[compro01]

That's funny, because for me it's the next step in reducing my expenses

If you think your bill is going to go down as a result of this, I have a wonderful bridge you may be interested in.

Re:No surprise

[mcrbids]

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.

Any business can and should see their customers as a source of profit - what is a customer to a company if not a source of profit? (no profit = don't bother) But Verizon Wireless takes this to whole new levels. Over the past 2 years they have become incredibly adept at actually making stuff up that has no bearing whatsoever. I saw charges like "Account service restoral fee" for $20 on a phone line that had been in continuous service for over a year. And not just one or two, dozens of them that would actually nearly double my bill.

It became this monthly routine - get the bill, go over the bill, find all kinds of bogus charges, call, spend two hours on the phone with a very sincere-sounding customer service rep to ding all the bogus charges, and then pay the adjusted amount. Wash, rinse, repeat until I quit shopping at Verizon Wireless.

I guess it's a system that works for them, and they are good with it; but it's just not for me.

Re:No surprise

[Anonymous Coward]

If T-Mobile and Sprint were more than also-rans in this market, then there'd be less of these shenanigans from AT&T and Verizon. I'll be beyond pissed off if they do this. I pay a premium amount per month for my access and I'll be blunt when I state that it doesn't cost them nearly as much as they're claiming and there's room to sue them over these games- what those two are doing is called usury. They're grubbing for profits here and if there's issues with their network and data usage, perhaps they should practice what they preach (I distinctly remember Verizon admonishing AT&T to stop whining and start investing on infrastructure over a little snit over their "There's a map for that..." campaign Verizon did a while back...).

The stuff that's fueling their current profits becomes vastly less useful if they go and do a braindead thing like this- and analysts shouldn't be listened to in the first place (THOSE SOBs are the ones that put us in the current financial malaise the world's currently in, right along with the investment bankers and the mortgage people.).

Re:No surprise

[Svartalf]

With all due respect isn't that the point of a business...making a profit?

Won't challange that supposition, because that much would be right.

However, there's aspects to this that most people pro-business don't seem to quite get because they've not been watching all this time.

There's legal, grey-area legal, and illegal (but it's only that if someone calls you out on it in a lawsuit or some government person does so...)

There's sustainable and unsustainable.

ANY time I hear "maximizing profits" stated by some idiot with an MBA or similar I want to just throttle them. Maximizing profits typically involves grey-area legal, illegal, or unsustainable practices. It's roughly analogous to strip mining a business space.

What Verizon and AT&T is playing up here to will help them in the short term, but not the long term because they HAD this sort of thing previously and then they moved to making unlimited services available for a high monthly fee that was fixed. Turning back that clock to an earlier time might mean more for profitability in the short term, but as people get BIT by their new scheme for making profits, the customers will either go elsewhere or use their service only inasmuch as they need to- which means not at all in some people's cases. They're going to eventually LOSE money on the deal doing this because the people providing their current profits will quit doing so. It's not some cash cow you can keep milking for more and more money- at some threshold you implode things.

First fatal mistake that can KILL a business is worrying so much about that bottom line you quit thinking in terms of your customers- because you're about the bottom line instead of about the customers that are supplying you with that business in the first place.

Second one is letting the stock market dictate your business decisions- including what you're selling and how many people you retain employment on.

Third one is failing to listen to your customers' needs and not supplying them. This little discussion is about two of the main players doing that very thing.

Re:No surprise

[Golias]

All customers of everything are purely a source of profit, and the correct price to charge for anything is whatever the market will bear. That is how capitalism works. If you want me to either give something to you or do something for you, you must pay me what I ask in exchange.

Re:No surprise

[Anonymous Coward]

the customers will either go elsewhere or use their service only inasmuch as they need to- which means not at all in some people's cases.

Bingo.

If I'm paying $0.02/MB, nobody'll ever download a fart app, and nobody will ever write one. So few people will download any mobile apps that the only developers will be the telcos themselves, and the resulting apps will suck so hard nobody will use them either.

If enough people have unlimited data access, someone will write a fart app, just for the hell of it, because he'll know someone, somewhere, will download it. In an environment of cheap bandwidth, there's something like a Rule 34 effect: if a hardware platform exists, someone will write a fart app for it.

When enough people had fart apps, I said "Hey, smartphones have finally gotten to the point that you can really do anything you want with them..." and bought one. I liked having internet connectivity in my shirt pocket. As a result, Google knows more about me than it used to, and can sell that data to advertisers. My wireless vendor knows more about me than it used to, can sell that data to advertisers, and I'm paying them an an extra $30/month than I'd been paying before. A few local restaurants have gotten business that they wouldn't have otherwise gotten. All these profitably-positive externalities arose directly from the decision to offer unlimited data plans.

I still haven't downloaded a fart app, though.

Re:No surprise

[ScrewMaster]

If T-Mobile and Sprint were more than also-rans in this market, then there'd be less of these shenanigans from AT&T and Verizon.

Yeah, I tend to agree. Not to mention the fact that T-Mobile may not be around much longer, not in its current form. And that's too bad: the underdog tends to treat its customers better because it can't afford to lose them. I've had a cell phone since, well, the late eighties I guess, and so far T-Mobile has given me the least grief of any of the providers I've had. I suffered through Cellular One contract (my God what a bunch of pricks), Sprint, AT&T, U.S. Cellular, you-name-it. Granted, they all suck to one degree or another. It seems like shoving it up your customer's ass is just bred-in-the-boner to these people.

I'll be blunt when I state that it doesn't cost them nearly as much as they're claiming

Q: How do you tell when a cellular provider's CEO is lying?

A: His lips move.

Re:No surprise

[osgeek]

And if you were in charge of a business, you'd see your customers as... buddies to lend money to? Of course customers are their source of profit. Naturally, they want to keep those little walking wallets loyal to them, so they charge as much as they can without driving them away.

They're a business. They have the best network out there and it's not cheap for them to run. I'd switch to it in a heartbeat if my damned iPhone supported Verizon. AT&T blows ponies.

Jjust admit you found another way to fuck us.

[Jackie_Chan_Fan]

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:Jjust admit you found another way to fuck us.

[massysett]

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.

Re:Jjust admit you found another way to fuck us.

[unr3a1]

I never understood why people are WILLING to pay exorbitant amounts of money on stuff because they believe it is "premium".

massysett, it's this ideal called "fair price". If Honda turned around and decided that they wanted to charge $100,000 for a Honda Civic, that is not a fair price. The same way that I pay $30 a month for "unlimited data". Now I don't use anywhere NEAR 5 gigabytes per month of data usage.

You honestly think it would be fair for Verizon to change their data plans so that me, who maybe only uses .5-1GB per month to get charged per MB so I have to now pay $50 for that usage?

There is a point where charging more for a service does not originate with the intent to "cover costs" but for pure greed. They don't have to change it to a tiered service. Verizon makes a ridiculous amount of money already. This move is rooted in pure greed. And the fact that people like you get fooled into believing that they are somehow entitled to satisfy that greed is really really sad.

Re:Jjust admit you found another way to fuck us.

[Zak3056]

I never understood why people are WILLING to pay exorbitant amounts of money on stuff because they believe it is "premium".

Bad example, here--AT&T, Sprint, or VZW actually are "premium" services compared to Boost or Cricket. Just look at the coverage maps.

Re:Jjust admit you found another way to fuck us.

[azrider]

Bad example, here--AT&T, Sprint, or VZW actually are "premium" services compared to Boost or Cricket. Just look at the coverage maps.

News flash - use Boost CDMA and you are using Sprint (IDEN on Boost is the old Nextel which, while still Sprint, does not have the coverage).

Re:Jjust admit you found another way to fuck us.

[BrokenHalo]

I take your point, but I gather there are areas where neither of those networks have any coverage.

We have a similar situation in rural Australia (particularly Tasmania): only Telstra has coverage that can be (sort of) relied on, so many of us don't have a whole lot of choice about our providers.

I never take any notice of what handsets are on offer, though. I usually find it more convenient to buy unlocked devices outright off FleaBay, since I don't need to have the latest and greatest gadget.

Re:Jjust admit you found another way to fuck us.

[tweak13]

News flash - use Boost CDMA and you are using Sprint

Bullshit.
Boost uses Sprint, but gets none of Sprint's roaming agreements with other providers. That's a HUGE change to coverage. Those roaming agreements are the only reason Sprint has good coverage. Take away the ability to use those Verizon towers and your only hope is that you are one of the lucky few that live within range of a Sprint tower.

Re:Jjust admit you found another way to fuck us.

[adamchou]

Correct me if I'm wrong, but aren't those networks 3rd party providers of service that is basically Verizon or AT&T? They don't have their own cell towers right? If thats true, wouldn't this price hike also affect them?

Re:Jjust admit you found another way to fuck us.

[Zak3056]

News flash - use Boost CDMA and you are using Sprint

I hereby retract "Sprint" from my statement above (not using Sprint, I didn't realize how poor their coverage actually was) but what I said still applies to AT&T and VZW.

Re:Jjust admit you found another way to fuck us.

[Anonymous Coward]

Bullshit.

Boost is wholly owned by Sprint. This is not a roaming agreement. This is a company branding the same service under a different name for a different demographic of customers.

Re:Jjust admit you found another way to fuck us.

[compro01]

FYI, Boost=Sprint.

Re:Jjust admit you found another way to fuck us.

[unr3a1]

Just because there are other options that are not as good as Verizon, Sprint, or AT&T doesn't automatically make those three premium services. Those are the STANDARD that other companies should try to emulate.

Let me put it this way. Ferrari cars are (supposedly) beyond standard cars in quality, performance, luxury, etc. They are also rare, so all this combined means they are worth hundreds of thousands of dollars. In reality, what you are paying for is a name. They are still just a car that can be totaled, they aren't some super safe vehicles, they still get shitty gas mileage, and they still have to be maintained. Personally, anyone who actually pays $400,000 for a car (Ferrari or not) is delusional. The ONLY thing that makes them worth that much is their rarity.

Verizon, Sprint, AT&T ARE the standard for phone service. They are not rare, they still only provide phone service. People who are willing to pay $100+ a month for cell service (that's not even unlimited minutes) are crazy.

Consumers are getting mixed messages

[ClaraBow]

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!

Re:Consumers are getting mixed messages

[grumling]

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.

Re:Consumers are getting mixed messages

[Anonymous Coward]

The problem is that phones are actually getting to the point where people *want* to use the data services. It used to just be a half-assed "check off the feature box" exercise, so it wasn't a problem.

conscious parallelism...

[Anonymous Coward]

Just remember... conscious parallelism is legal under the antitrust laws!!!

The Internet cartel is rising. It will only get more powerful. Right now they are winning every major regulatory battle. The Internet will look very different in ten years.

Re:conscious parallelism...

[hedwards]

You're correct, although that doesn't mean that there won't be an investigation. If it turns out that there's any contact between the companies on the issue then that's a completely different matter. This is also coincidentally why service tends to suck so bad in the US. None of the providers have any incentive to compete over things like pricing of text messages. They all know that a price war would screw them all over.

Not so backwards after all

[lul_wat]

Here I thought New Zealand was 10 years behind because we don't have unlimited data. Turns out we were 10 years ahead.

Pimp tactics

[gilesjuk]

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.

Re:Pimp tactics

[Anonymous Coward]

So to pay for data we will have to start giving blowjobs to random strangers on the street, just like iphone users?

Re:Pimp tactics

[Anonymous Coward]

iphone users give blowjobs to random strangers because they like it. Sluts, not whores.

Missed Marketing Opportunity

[countach44]

I think that if they did this, Verizon would lose out on a great marketing opportunity. By keeping an unlimited data plan, they can taunt AT&T for scrapping theirs. Verizon was somewhat late to the game since they didn't have an iPhone competitor for a while, so why not use this to gain an edge?

SMS != data

[name_already_taken]

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.

Re:SMS != data

[TyFoN]

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

Re:SMS != data

[Anonymous Coward]

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

That's changing in LTE - it's all just data (AIPN).
Though I'm sure they'll find a way to charge big bucks for TXT messages.

Re:SMS != data

[lancejjj]

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.

Re:SMS != data

[shawb]

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 incorporated into that billing. And while the per message cost of supporting SMS isn't that much... the actual total cost to a telecom is significant; I would almost suspect something on the order of millions of dollars annually. Although I will gladly acquiesce that claim if someone shows me actual internal figures.

Re:SMS != data

[Bigjeff5]

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:SMS != data

[Anonymous Coward]

CDMA works more or less the same way - SMS messages are sent on the paging channel (one of the 'control' channels).

Re:SMS != data

[voidptr]

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 per text cost is far lower than the usually quoted per-over price. AT&T right now gives me three choices: $0.20/per; $5.00 / 200 and then $0.10/per; or $30 for unlimited. So if you regularly send more than 25 texts a month, you should just go to the $5 plan where you're going to pay between 2.5 - 19 cents each, and if you send more than 450, you should go to the $30 plan and pay 6 cents or less each.

Re:SMS != data

[BrokenHalo]

my friends (and spammers) like to send me text messages without my authorization. That costs me $0.20 every time...

Those of us living in Australia are well used to parasitic telcos, notorious for bait-and-switch tactics, outright lies and poor service. But you remind me that there are US residents much worse off. We complain at having to pay AU$0.25 for an SMS, but at least we don't have to pay to receive them (unless we are travelling overseas).

Re:SMS != data

[Anonymous Coward]

Sorry. I cannot say which telecom I work for but SMS costs, while not zero, are indeed negligible -- certainly not in the millions of dollars unless you factor in electricity, cooling, personnel, etc. It is entirely an artificial profit center.

You'll get differing opinions, of course. But any actual engineer will tell you the truth about this, if pressed.

Re:SMS != data

[Anonymous Coward]

the actual total cost to a telecom is significant; I would almost suspect something on the order of millions of dollars annually

That's in aggregate, though, based on the fact that millions of subscribers are sending SMS. Take into account that each one of those subscribers is already paying you at least $40 per month and those costs are basically nothing. It's also pretty small to the actual cost (in aggregate, like you have done) of all your subscribers' voice and data usage combined.

Re:SMS != data

[blueg3]

There are a limited number of these control packets in which to put the data. The bandwidth available to SMS messages is much smaller than the bandwidth available for data. They'd almost be better served moving SMS over to data -- which is what Google Voice does.

Re:SMS != data

[Gr8Apes]

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.

You are incorrect. There is no guarantees on SMS. In fact, AT&T doesn't even honor the SMS delivery notification flag, which is a requirement of the spec (you get notified only after the message has been received by the handset). This is a requirement of MMS, which is why AT&T did not get that until recently because their network did not support it. From out of network, they sent a response as soon as it hit their network. I don't know what in-network response was, but Blackberry owners were complaining that while Cingular used to have this functionality, after AT&T's takeover it was removed.

Re:SMS != data

[Anonymous Coward]

You have to pay to recieve text messages in the USA? That's ridiculous! And I thought the UK networks were moneygrabbers.

Re:SMS != data

[gumbi west]

I pay 2.1 cents in and out per text. Maybe you should switch to a new provider?

Re:SMS != data

[BikeHelmet]

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.

There are VOIP providers that offer calling anywhere in North America for 1 cent per minute - or as much as 2 cents, if you want a toll free number. (So that people can call you and pay nothing) The numbers themselves cost between $1-2/mo. These companies make a profit.

I have trouble believing cell towers are so expensive that providing service costs many million times as much.

Re:SMS != data

[Anonymous Coward]

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.

I've always found that aspect of the US mobile system to be so arse-backwards. While I can understand (though not really accept) why you folk need to pay to receive your calls (since your mobile phone numbers are virtually indistinguishable from landline numbers, and it wouldn't be fair to charge some unsuspecting user for a call they thought would be free), I can't figure out why you have to pay to receive your SMS - I mean its not as if the sender couldn't figure out it was going to cost them! (Indeed, it does cost them!)

Also, as the parent points out - you can't control which texts you receive and which you don't, so you pay for all your SMS spam too! At least with a phone call, you can hit 'reject'..

Most of the rest of the world has mobile numbers that are clearly identifable as mobile numbers. The caller (or texter) pays all the costs, and this is reasonable because the caller can identify the call as to a mobile. The recipient's telco bills the caller's telco, but not the recipient.

That all said, in my part of the world, $10 gets me 100MB, and these are these new fangled ultra low rates in order to prevent "bill shock" - previously we'd expect to pay $0.10/10kb (about $10/MB), with no initial quota. /grumble

It's obvious...

[SIGBUS]

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.

Re:It's obvious...

[icebraining]

Except the CEO has already left with his big bonuses when 4 arrives.

Well

[Anonymous Coward]

Hey Verizon.

I'm having a hard time paying my bill for my contract, so I'm going to have to pay less to accomediate my lack of money. Hope you don't mind.

The Lowest Common Denominator

[Enrique1218]

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

Re:The Lowest Common Denominator

[Fnord666]

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.

Re:The Lowest Common Denominator

[digitalchinky]

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 stick yet more phone calls on the wire. It's a net win for the telco, free money in a lot of ways. About as offensive as actually charging money to send SMS over a signaling system that is already active (and mostly idling) 24/7 anyway.

Providing more bandwidth to the end user, for nearer to what it actually costs, goes against every single principle they've built their companies upon for the last several decades. They wont go down that path without a lot of kicking and screaming.

Re:The Lowest Common Denominator

[Bigjeff5]

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.

Re:The Lowest Common Denominator

[Svartalf]

Actually, all it'd take is a complaint to the PUC over that one and they'll back off on the spot in most cases. They operate with the permission of the State you reside in and the PUC enforces the common law provisions there- they don't want sanctions over even a single incident, which could be much more than the lawsuit would cost them (because it'd cost you 5K and THEM 5k...).

Re:The Lowest Common Denominator

[vlueboy]

If your provider changes the terms of your service agreement, you have the option of discontinuing service instead.

They do this by sending you an explicit contract with the new terms and state that if you continue to pay, you auto-agree to the new terms. Credit card companies' standard M.O.

  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.

Nay. In the US, virtually all phone, isp and cable contracts I've signed include a clause stating that terms are subject to change without prior notice. A credit card handling money can't exactly get away with the same, but an ISP charge very little in comparison, and at fixed rates, so they don't lose much. Normally it's worthless to sue for the price of a few bucks tacked on your last few monthly bills due to court costs... but that is useless since contracts also wave away your rights as consumer by forcing you into arbitration. Your only other option is to wait for a greedy lawyer to mail you a letter stating a class action lawsuit entitles you to some near-worthless rewards if you decide to join them on pressing the fraud charges.

Re:The Lowest Common Denominator

[tompaulco]

Quite clearly the only sane option is to not sign such a contract. Very few people really NEED a cell phone anyway. We should send a message to the phone companies by not getting one.

Re:The Lowest Common Denominator

[vlueboy]

Quite clearly the only sane option is to not sign such a contract. Very few people really NEED a cell phone anyway. We should send a message to the phone companies by not getting one.

My reply expanded beyond just cellphones, which are only one application of this crazy legalese system. Now cellphones I can pardon, since I avoid contracts myself --a reason I have no Android is that if I skirt the contract, I must pay full price for the $500+ phone.

Now, for the ISPs and cable companies, in the United States, you cannot get internet service at all without contracts (you can't get broadband without indirectly accepting the clause saying it's illegal to run servers on port 80, for instance.) The word contract does not only mean "3 years and you get $X off" but the "binding" EULA tradition that American businesses use to shovel our "user rights to buy service without strings attached" away in exchange for the "right to get a service at all."

Re:The Lowest Common Denominator

[Anonymous Coward]

You shouldn't have to pay an early termination fee... because what you say sounds perfectly reasonable and accurate.

Good luck putting that theory into action though. Have fun paying that terminatino fee regardless.

Personally, until something not-retarded comes along, I'll forever stick with pay-as-you-go. I may not be able to browse the net on my cellphone, but for as much as I use it it costs me all of maybe $12 a month. I'd LIKE to be able to use it more... but all plans right now are stupid as hell. By the time the 'contract' is done, you shouldn't have to be paying for the phone three times over.

Yet another excuse to charge more money

[Xpendable]

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 effectively eliminates the QAM channels I used to be able to pick up on my LCD HDTV. WIthout the DTA I can only watch 15 channels. And of course they only give you 2 "free" DTA's... if you have more TV's, you have to rent them for $2 a month. Nothing but a SCAM. I am cancelling Comcast. And when Verizon ends the unliminted data plan, I am cancelling Verizon. Seriously... I might as well forego internet all together. Frak these companies who make it so expensive to enjoy technology with their 400% upcharges on services.

Re:Yet another excuse to charge more money

[Anonymous Coward]

I smell BS. I pay Comcast around $100 a month and have everything but movie channels, HD, DVR, and 12Mbps internet. I have no love for Comcast, their throttling practices and marketing BS annoy me, but it's a local monopoly. It's my ONLY option for TV(apartment complex and apartment isn't facing south) and the DSL service here is only 1.5 Mbps. So, while I hate being stuck with Comcast for now, and think they overcharge, it's not as bad as you're trying to make out.

Re:Yet another excuse to charge more money

[hedwards]

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 didn't come in properly on Comcrap. It might be a bit better if you're getting cable through a bulk package as a part of a condo association or similar, but the cable company just doesn't care enough to provide the service that it promises.

Same really goes for cell service. Since for the most part they all suck, there's basically no motivation by any of them to actually improve.

Re:Yet another excuse to charge more money

[MattGWU]

Wow, Comcast gives you two free boxes? I'll jump ship there! Cablevision/Optimum gives you zero free boxes, but they're requiring them in a few days. Also, the boxes are $5 instead of $2. Bargain!! They started taking away channels a year ago unless you got a box. Guess enough people didn't pay the ransom.

Why do we do this to ourselves?

Good

[Anonymous Coward]

I'd love a per-MB rate. Then I wouldn't have to pay $30/month for the privilege of owning a smartphone.

MBA solutions to technical problem

[pesho]

'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:MBA solutions to technical problem

[hedwards]

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.

Thanks for doing our market research, bitches !

[speedlaw]

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

[c0d3g33k]

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. 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.

Re:Two comments

[Jeff DeMaagd]

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.

Re:Two comments

[Bigjeff5]

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:Two comments

[Anonymous Coward]

Sometimes squeezing every last penny out of customers isn't the best way to do business.

Invalid by existence proof. Verizon (and AT&T) seem to be doing well, so it appears to be a fine way of doing business, at least so far. Perhaps your claim is that they would do even better if they didn't bother charging as much for services as they are doing now, but I would put on my skeptical face for that claim. Perhaps you're confusing "best way to do business" with "best way for people like me"?

Second: When I purchased my smartphone, I didn't like being forced to purchase the "unlimited" plan for $30/month.

Agreed. I only like to pay for what I use, and as a customer who doesn't use a lot of services I prefer to conduct business with companies that let me pay less for using less. I considered switching to AT&T when my contract is up because I don't use much data, but I'll have to weigh that against the poor performance of their voice calls. Hopefully Verizon does something similar and allows me to get a cheaper limited data plan than the one I have now.

Re:Two comments

[markus]

Android phones will use Wifi if available and only use 3G for existing TCP connections. The latter should be far and few between, and they are unlikely to use much data. You'd only have those if you started a connection on 3G and then walked into an area that has Wifi.

By default, Android phones disable Wifi when the phone is not in active use. So, background applications can still incur some 3G usage. This setting made sense on older hardware (e.g. G1, ADP) which needed a lot of power to keep Wifi connections active. Having Wifi permanently turned on would result in sharply reduced battery life.

For more recent Android hardware (e.g. Nexus One), it is generally a good idea to change the Wifi "sleep policy" to never. This will keep Wifi active even when the screen is turned off. And in fact, it often results in better battery life. It turns out, on these devices Wifi is a lot more efficient than 3G. So, not only are you conserving your data quota, but also your battery power.

Re:Two comments

[Montezumaa]

I am happy for you(I am being sincere, not condescending) that you live in a place where you a near a WiFi hotspot most of the time, but where I live, I am not so lucky. I might have one hotspot in a 750 square mile radius, but it gets better the closer I travel to the Metro-Atlanta area. I wish I had the luxury that you enjoy by having hotspots all around me, or even access to proper broadband internet(Verizon Wireless is the only broadband option, and even that sucks with the 5G cap and spotty service).

Living in a rural area, we are extremely light on hotspots and broadband access. I will not sell my house(which I built just five years ago) and all my land(around twenty acres) just to spend ten times the price for 1/8th the square footage(my home is 2200 square feet, plus full, finish basement...Georgia does not count basements in square footage for tax purposes...back on topic...) and zero land, plus a HOA(Home Owners Association) just to get surrounded by WiFi hotspots.

The fact of the matter is that these company's wireless divisions are wanting to offer phones that offer the "latest HD, 3D, [insert new marketing flashing shit word]" content on new phones, which eats more and more data, yet they want to cut the amount of data available and keep the prices(essentially) the same. AT&T is the most glaring by cutting the data throughput by more than half(the industry already limits "unlimited" plans to 5GB, which is wrong), yet they want to cut the price by $5 dollars. This is just a huge "FUCK YOU" with a few offensive gestures by AT&T.

Verizon Wireless is about to go down the same road, but people continue to blindly use the product. If I had a choice(which I do not, as I have to be able to access the internet for work), I would dump Verizon tomorrow and and go with a company that is willing to provide me with the service I pay for. As soon as said company exist in my area, then all the major corporations, that are screwing me on service, will be gone.

Re:Two comments

[Svartalf]

Unless Verizon does dividends on a regular basis, they're not concerned about "shareholder" value. Their motives are driven by the current going price for their stock- the "shareseller" value- which is a different thing, more akin to government sanctioned gambling than investment and business dealings.

And it's a way to commit corporate suicide, as it's been the cause of the demise and Chapter 11 filings of numerous companies over the last 10-15 years. Do your business right and that value or real shareholder value (if you do dividends...) will follow. There might be hiccups and down times, but in the long-run (as opposed to the day-trader timeframes of things we're doing these days...) it'll be a major positive.

Re:Two comments

[c0d3g33k]

You're assuming I live in a metropolitan area where there is an abundance of public hotspots so I can always rely on WiFi when moving about. Not so - I'm in a rural area too. I just spend a lot of time near a few places that do. I work from home, so most of the time I'm near my own wireless network, so I can use that to update apps, sync up with the cloud, control my media center etc. When not home, there are a few places I happen to frequent that also provide WiFi like the public library and the coffee shop. Beyond that, I'm not much better off than you - I could not rely solely on WiFi. The point was really that since my current habits keep near the 2-3 WiFi sources available to me, I don't really NEED the expensive data plan to consume data. Thus I would rather be able to turn it on/off except when traveling off my beaten path, because even with metered data I would likely spend less than the current mandatory monthly fee.

Re:Two comments

[c0d3g33k]

My phone *is* an android phone (Droid), so I'm quite familiar with the nuances of WiFi, 3G and how they behave and interact on this device.

What you say is accurate, but somewhat beside the point, which is that I would prefer greater control of when 3G is active should I choose to rely primarily on WiFi and use a limited or metered data plan. Yes, when connected to a WiFi network, the device will use that instead of 3G, but it automatically fall back to 3G if the connection fails in any way (and there doesn't seem to be any graceful fail- or switch-over for established connections - they just hang). That actually happens a lot, even when I'm stationary near a strong signal (eg. at home 10 feet away from my AP) and the connection freezes up fairly often and seems to be wonky when using channels higher than 6. But there's currently no way to prefer WiFi over 3G in a useful or convenient way. The device is designed to use 3G more or less constantly, based on what I observe. You can turn off 3G and retain data capability actually, but only in a fairly stupid way: by going to airplane mode (everything off) then selectively activating WiFi. But the ability to make and receive voice calls is still disabled, so this is fairly useless for regular use. That's about it. There are no settings to disable 3G only, easily toggle it on/off, or allow it only under certain conditions (except disallowing it when roaming). As such, any limited data plans offered that might be preferred by non power users need to take this into account.

Re:Two comments

[c0d3g33k]

Sometimes squeezing every last penny out of customers isn't the best way to do business.

Invalid by existence proof. Verizon (and AT&T) seem to be doing well, so it appears to be a fine way of doing business, at least so far. Perhaps your claim is that they would do even better if they didn't bother charging as much for services as they are doing now, but I would put on my skeptical face for that claim. Perhaps you're confusing "best way to do business" with "best way for people like me"?

No, not really, though tossing off a quick thought wasn't really a good way to make a nuanced point about business strategy though that wasn't really the objective. It's not about "liking" a business, it's about the real and perceived value of the product or services. I'm personally less likely to reduce the amount of services or features I pay for if they get a little better over time for the same cost, even if that cost is really more than I need or want to pay. And I might be more willing to try new services or features because I don't have to worry about getting screwed. Giving people less value for the same cost, in contrast, encourages them to evaluate the value of said services which can be a prelude to reducing them or seeking a better deal elsewhere. I'm no economist, but that seems to be a formula for a slow decline, not viable growth.

Re:Two comments

[zippthorne]

"growth" is overrated. What's wrong with reaching your asymptote and just plugging away making steady profits?

Also, where the heck can you find a company that's interested in "just" providing a good service to their customers at a profit for the long haul? I'd like to invest in some, but I can't pick them out from the companies that are looking to have good numbers for the fall quarterly so that the VP can unload his interest on unsuspecting small-timers.

Re:Two comments

[markus]

What you are asking for is arguably a very specific feature and something that is probably too complicated for typical end-users. But it is nonetheless quite useful and something that should in fact be available for power users who don't get confused by the fact that they might accidentally disable all data-communications on their device.

On GSM/UMTS devices, you can probably do most of what you want to do by installing APNDroid from the Android market. It allows you to selectively disable non-Wifi data connections. There are a few other applications (e.g. Timeriffic) that are aware of APNDroid and that can be configured to en-/disable data based on other factors (e.g. time of day). I believe there are similar applications that can trigger based on location, but I haven't tried that myself.

Unfortunately, I believe that this option is not really available for CDMA devices such as the Droid. Last I checked, APNDroid only worked on devices that actually use APNs -- and that's a GSM/UMTS technology.

Normally, in a situation like this, I would suggest you look at community-firmware such as the Cyanogen project, as they tend to be quite good about adding a lot of features for power users. But again, I think that won't help you. Last I checked, the Droid was difficult to work with and didn't have much in the way of community-firmware.

Sorry that I can't be of more help. But maybe some of these suggestions will give you an idea on where to look for a solution.

Re:Two comments

[dlgeek]

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. THAT is how you ensure customer loyalty. Sometimes squeezing every last penny out of customers isn't the best way to do business.

Woah... as a Linode customer who hadn't yet seen the announcement, thank you very much. Rebooted my server and got more allocated memory - awesome!

Re:Two comments

[Floritard]

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 now. Of course the selection isn't quite as large yet but still, most of the stuff we want to see is stream-able. Money's getting tight and we might have just canceled the service altogether.

Especially if we didn't just like Netflix. I feel like I'm taken care of with them in a way I can't say many other companies whose goods and services I buy make me feel. Lose a disc in the mail? No problem, we like you so not only are we going to forget about it, we're going to go ahead and promptly send out the next disc in your queue right away. They even do this if a disc is scratched. That is, if you tell them it's scratched. They just go, okay go ahead and mail that one back to us, but in the meantime we're going to send out another disc right away. They don't even wait for the damaged disc to return to them for evaluation. This is a company that values customer satisfaction over their own stock. Because ultimately my satisfaction is more valuable than a few pieces of their stock.

Then there is a company like Blockbuster Video. I was living for a time in a separate town from my girlfriend. So no Netflix for me. There was however a Blockbuster right next to where I worked. I went there occasionally, mostly because I had long had a membership and it was just easier than signing up for a new place. What can I say I'm lazy in odd ways. Then Blockbuster finally decided to get into the online game and I let a cute girl go ahead and sign me up. I figured I could rent some dvds, rip them that night and return them when I went to work in the morning. I powered through entire series of television shows in days and after two months of membership I canceled and had months worth of entertainment to watch at my leisure. I realize I was still giving money to Blockbuster, but I like to think that with all the processing costs I was at least a small loss for them. In fact I seem to recall them hiking their rates around the time I canceled, probably just due to them not fully appreciating the cost of their program, but I like to think that abusive customers like myself had something to do with that.

Because fuck Blockbuster. After years of exorbitant late fees, charging 1/5 the price of a game for a rental, hawking crap at the register, and finally just flat out pulling late fees off my credit card (this unexpected action cost me an overdraft fee or two in my lean college years!), I have slowly built up an attitude of contempt for these guys. I hope they fail in their bid for online and I hope they die a miserable death. I see the Blockbuster sign and I loathe it. I see the Netflix logo and I feel kind of warm. Sooner or later these businesses will come to understand the value of that.

Re:I'm so fucking tired of capitalism.

[speedlaw]

I had relatives on the "wrong" side of the wall. Things there didn't work out too well either.

Honest question

[Nikker]

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?

Re:Honest question

[WrongSizeGlass]

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: 17Mbs/5Mbs to the closest server and 13Mbs/3Mbs to a server across the country. I could get the 'Ultra' service but it wouldn't really make much of a difference for my needs. I have three clients who use the 'Ultra' service and they get great service.

Re:Honest question

[Anonymous Coward]

hey, i have to post anonymously, since i was moderating this discussion. however, i have worked at major ISPs.

anyway, there is no fundamental limit to the capacity that ISPs have for their own networks. or, if there is a limit, we're not even close yet. any one of them can expand their infrastructure, and quite easily, at that. however, it costs a lot of money to do it.

every single one of the big american ISPs, however, doesn't want to actually behave in a capitalist manner: they don't want to really rechannel profits into their systems' infrastructure. they want to take all of the profits, and make themselves wealthy. therefore, the capital of their business never really gets upgraded in the way it should. and everyone suffers.

to sum it up: this is something that is absolutely limited by finance alone. anyone who tells you otherwise is bullshitting either you, or themselves.

as for bottlenecks? packet filtering and inspection, as well as being forced to comply with too many idiotic US government laws. it takes a toll on network performance.

Re:Honest question

[AHuxley]

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 political fix is in, one network, no sharing, pure profit back to one or two telco like networks per region.
Read all you can about Australia and New Zealand with adsl and adsl 2+, that can give a clear view.

Re:Honest question

[Anonymous Coward]

The problem with all of it these days is no longer the last mile. (Ok it is if you live out in the boonies, or in a town with no competition) The upper limit on the last mile is 10,000mb. The hardware is not cheap, but it's not that expensive either, and certainly not beyond what Verizon is rolling out with their FIOS. Now that 10,000mb is only you talking directly to Verizon. The other 15,000 miles is the real problem.

  The best car anology is the last mile of the internet is like having a private road leading from your house to the street. You may have a real nice one where you can drive 200mph down it, but once you are on the main street you are stuck with the traffic, lower speed limits, bad driving directions, toll booths, and crappy roads. After all that then you still have to deal with the destination's private road which may be crap too. I always laugh at people who buy the fastest service and then don't understand why most websites still suck in terms of download speed.

The other portion of it is the service bandwidths are purposely set up so you would have to pay a premium to get a more symetrical connection. There is no reason for this other than to keep you from setting up your own servers for various online services.

The only real hope is more companies will take a page out of google's playbook, and just buy their own infrastructure, and bypass the telco's all together giving us more options for routing than the current over sold backbones they currently offer.

Re:Honest question

[Anonymous Coward]

In no ways a limit on bandwidth has been reached. As far as over-the-air transmission of data goes, there's at least these things that would help: Improvement in technology (LTE - 4th generation wireless data transmission), reduction in cell size (more towers) and freeing up frequencies from the massive spectrum that is currently reserved for other uses (all of which really don't have as much value and could mostly be put on a general "data service" for the most part). Out of these, the small cell size and upgrade of technology is more or less entirely in the provider's hands, but they're a bit reluctant about either, in particular they obviously don't want to compete strongly - they just want to do as little investments as possible and milk people. Your bandwidths are not growing nearly as fast as they could.

Now, of course there's also cable bound internet. The records for a SINGLE fiber is currently ~70TB/s for shorter range and ~15.5TB/s or longer ranges according to Wikipedia. Since there's no interference from the individual strands (put as many of them together as you want-they're small enough) and since they are "fairly" cheap to lay down (cheaper than roads, definitely, if you also factor in that such cables require nearly no maintenance, just a small amount of power on the transmission gear hooked up to them and occasional replacements for some of that gear)... well, basically with the investment, any western civilization could have more bandwidth than we can easily use for the foreseeable future. Neither our brains nor our computers will exceed the need any time soon, unless most of the "computer" was actually elsewhere.

And I don't know where current limitations at the provider's side lie. But it is definitely a matter of gouging people now - if bandwidth became as plentiful as the CURRENT generation of fiber optical wiring would make it if it were wired right to households, it'd also be nearly worthless. A simple upgrade to that technology as a government would probably do it would provide so much bandwidth it would be nearly worthless. 80 dollars+/month for what we have now? Hah. Maybe 1 dollar/month for those connections measured in GB/s...

Re:Honest question

[Comen]

I work for a big ISP, and bandwidth is not a issue on the backbone, we do more bandwidth in VOD video to the home than internet service will come close to for a long time.
The amount of bandwidth in the last mile has always been the real issue, but for home internet service that problem is getting much better and I would says both cable and dsl services have been able to provide over 100mb services to a house for awhile now, but there is a cost of upgrading equipment, and you will need more equipment (dslams,cmts) since you will be able to put a smaller amount of customers on a device. But these are just money issues, not technical ones, and these companies make lots of money, they are VERY profitable.
This goes for Verison also, it is very cheap for these companies to use several fiber rings around a city to get fairly cheap bandwidth, more bandwidth than they could ever use for cell phone back haul (10 gigabit ethernet between towers) but I would have to assume the bottleneck is the tower to the phone. I do not know much about this equipment works really, I am not sure if this equipment is limited by the amount of connections on the tower or the bandwidth of each connection, but I would assume that this is a issue that can be solved by spending money on more or better equipment.
I have a hard time listening to these companies whine about bandwidth, when they are making a killing, you can not even get attention in a Verison store where I live the demand is so high you get a number like you are at the DMV. The number one highest growing market is cell phone service, these companies know these very well. So having to upgrade equipment should not be a issue, it should be what they do, what they provide us, its a good problem to have!

Now about the unlimited plan thing, for most customers that buy a unlimited plan, it is not about having lots of bandwidth, its about insurance, or piece of mind!
This allows them to let someone play with the phone with out counting pennies, or that little johnny did not get a hold of my phone and run up a big bill by mistake, it lets you play with the phone with out counting minutes, but I guarantee for every 1 person that uses allot of bandwidth, you get 20 that do not use much bandwidth at all but want the unlimited option to make them feel protected from 1 bill that they are not ready for.

Re:Honest question

[Anonymous Coward]

Oh and 'scuse the TB (according to many this notation will mean Terrabyte. Its Tb, terrabit, the unit almost always used in telecommunications - meaning 8 times less).

Re:Honest question

[butlerm]

it is not about having lots of bandwidth, its about insurance, or piece of mind

I have lost a piece of my mind, and I don't know where to find it.

Re:Honest question

[murrdpirate]

Why does everyone think these ISPs are making so much money? They're not.

Five year average, after tax profit margin:

Verizon: 7.6%
AT&T: 10.5%
Sprint: (17.4%)

http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=vz
http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=T
http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=s

Re:Honest question

[xtal]

I work for a large WISP/Cable ISP.

There is no shortage of bandwidth. New technologies are making it cheaper than you can possibly imagine.

There is a problem getting it to the home. There exist wireless options to distribute with appropriate investment.

The only limitations I am aware of are regulatory, not physical. Even with current technologies based around OFDM/MIMO, we could be offering 1000+mbps wireless to most people with more bandwidth assigned. Gear is cheap.

Re:Honest question

[Anonymous Coward]

Not even the worst of it, I know a construction company that is almost having to declare bankruptcy because of cell phone companies.

They pull shady shit on those who build their cell towers. That's right, on top of fucking the customer over, they fuck over the contractors that build their very networks.

This customer of mine has now 4 people working for his company where he used to have 400, he's about to fold because thanks to the cell companies, he's nearly broke.

What happened was is that they had him sign a contract with little hidden things like "we can stop payment at any time for any reason but you are required to finish the job or face litigation" scattered in legalese throughout it. He foolishly signed, and halfway through deploying cell towers around california, they were cut off, but were expected to pay out of pocket for the rest of the materials and labor. He stopped building the tower they were working on, and guess what?

Verizon took his company to court, dragged him through court (they had no chance of winning the right way) and nearly bankrupted him.

If you think data plans are evil, look what they do to people who do business with them. they use them for cheap to free labor. He said they easily paid for 10 towers, and got 15 more for free.

So when they bitch about upgrading the infrastructure being so expensive, they're also lying, they don't even bother to pay for half of it. legally, most of their towers out there aren't even theirs.

Re:Honest question

[Khyber]

Your customer still has full legal ability to file a full property lien on those towers.

Re:Honest question

[Anonymous Coward]

Wanna bet?

Re:Honest question

[butlerm]

"we can stop payment at any time for any reason but you are required to finish the job or face litigation"

A valid contract has an essential property called "consideration", essentially a fancy way of saying quid pro quo, or something for something. A good judge should have laughed the cell phone company out of court, and denied their claim as a matter of public policy.

Re:Honest question

[Khyber]

Yea. People try this EXACT SAME BULLSHIT in the cleaning business. They lose, too, when they realize their contract violated the law exactly as this one has!

Re:Honest question

[voot]

it depends on how powerful the radios are on the tower. cell phone towers use special antennas to divide an area into slices which will have several antennas that only cover, say, 15 degrees or so. the further you are away from the antenna the wider the sector is, so they are run at a lower power to cover higher population dense areas.

so to build up the cellphone network, you need to build more towers in population dense areas.

Re:Honest question

[soppsa]

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?

bandwidth is not a issue on the backbone

You really thing that if everyone was torrenting on 1000mbps home conns this would still be the case? You must be a junior admin... and I certainly hope you aren't the capacity planner at my broadband provider.

Good, Unlimited is a Fantasy

[bill_mcgonigle]

This is good news - 'unlimited data' is a marketing fantasy, belied by the actual 5GB caps on plans. There is finite spectrum, even if we're not close to full utilization, and there is definitely capital cost associated with each unit of bits/time in service.

Anybody who thinks he's really getting 'free' unlimited data now is being fooled and/or billed (I hear there's one obscure MVNO still offering it, but for the most part there are steep overage charges).

When the carriers drop these pretences, they're left to compete on packet prices. Where markets are competitive, this can only serve to bring down the price of wireless Internet over time. And everybody knows the cell network is just wireless Internet pretending to be a phone system. Re-investment of profits into infrastructure (increasing capacity) should also improve as they seek to compete on service to counter-balance price.

To be frank, I thought they'd milk another couple years out of the status quo before caving to the inevitable.

Re:Good, Unlimited is a Fantasy

[Shadow of Eternity]

"Where markets are competitive"

You do realise we're talking about America, right?

Re:Good, Unlimited is a Fantasy

[bill_mcgonigle]

Governments can impede markets, but they always lose in the end. Clearly that takes too long.

Many US markets have wireless competition, despite the regulatory hurdles.

Re:Good, Unlimited is a Fantasy

[Shadow of Eternity]

Oh how cute, you actually still think the Big Bad Gubmint wolf is trying to huff and puff and blow down the free market rather than the filthy rich corporations colluding with each other to ensure there's only the illusion of one despite the government's best efforts to actually protect the free market.

Go take a look at europe's cell market, that's what you get when your government actually protects the free market from the inherently destructive force of corporations with so much money they can afford to break the law.

The "Free Market" is just as much a logical fallacy as the "Worker's Paradise", and for the exact same reason: They both inherently require perfect people that behave perfectly.

Re:Good, Unlimited is a Fantasy

[Russ Nelson]

Actually, there *is* such a thing as unlimited Internet. You have a certain bandwidth limit, and you are allowed to suck down data all day long at that rate. Trouble is that's not an efficient use of their network, nor your time. People usually want high speed when they want it, and are willing to put up with total download amounts rather than being speed limited.

So, 5GB == 40Gbits/month = 1.3Gbits/day = 55Mbits/hour = 15Kbps **unlimited** (like, really, completely unlimited, download at 15kbps all day long).

Re:Good, Unlimited is a Fantasy

[teh kurisu]

It's relevant to the UK as well, where O2 are discontinuing 'unlimited' data in the same way, and introducing caps of 500 MB per month on all but their most expensive tariffs.

At the same time, we have the option of companies like giffgaff (who, ironically, operate as a virtual operator on O2's network) who offer genuinely unlimited data for 'personal mobile use'.

Re:Good, Unlimited is a Fantasy

[bill_mcgonigle]

you are allowed to suck down data all day long at that rate.

On wireless?

Re:Good, Unlimited is a Fantasy

[bill_mcgonigle]

the Big Bad Gubmint wolf is trying to huff and puff and blow down the free market rather than the filthy rich corporations colluding with each other

Corporations are tentacles of government - they're a legal fiction engaged in regulatory capture.

How cute that you think they're separate entities.

Re:Good, Unlimited is a Fantasy

[Shadow of Eternity]

So if it's the government doing it then it's proof government is evil. If it's not the government doing it... then it's still the government doing it and it's proof government is evil.

I think I've seen this kind of argument before.

Re:Good, Unlimited is a Fantasy

[bill_mcgonigle]

So if it's the government doing it then it's proof government is evil. If it's not the government doing it... then it's still the government doing it and it's proof government is evil.

Are you claiming all people are servants of the government?

I think I've seen this kind of argument before.

Then you should be able to clearly explain what you mean...

Re:Good, Unlimited is a Fantasy

[Shadow of Eternity]

No, you're claiming that.

Re:I'm so fucking tired of capitalism.

[Anonymous Coward]

Does Socialism have unlimited 4G?

Of course they will

[nurb432]

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.

Re:Of course they will

[vlueboy]

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 have included posts on how average filesizes are already going up due to blueray, HD on youtube and so on. Allow me to use borrow your insight to state that it makes perfect sense now. ISP's are probably actively lobbying to sell super-mega-pixel cameras, HD recording on everything and the slow disappearance of streaming content where low bandwidth was enough.

In return, hardware makers forcibly de-shelf perfectly good audio and video recorders every 12 months. Thus, "3... no, 5... no, 7! no, 8! no, 12 megapixels outta be enough for everybody!" hides the fact the highest-MP camera sells best to noobs who always think bigger is better. At $250 year after year, I'd rather be able to buy a cheap old, now unfindable 7MP camera and lower our average facebook upload times. Keep in mind that I know about batch resizing, camera settings and zipping files, but my friends still send huge multiscreenshot emails because they don't know better.

Re:I'm so fucking tired of capitalism.

[hedwards]

Actually Communism was really just a perverse form of capitalism. It's more or less exactly what Adam Smith warned about. Rather than one company owning everything, one entity did. The entity was generally the Communist party, and the results were indistinguishable from what the fascists in America are pushing for. Either the government controls the entire economy or a single corporate entity controls the government. Without appropriate regulation those are pretty much the only options which don't involve the entire country exploding.

It's for the best

[internic]

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), etc. When you enter into an unlimited agreement, you should know at the outset that the provider has no intent of holding up their side of the bargain. It's much better to enter into an agreement that is reasonable and has clear explicitly stated rules that you can mutually agree upon.

The question, of course, is will the cell carrier/ISP come up with a different model that serves people better? I admit that cell companies usually choose really unreasonable models, like calling minutes packages that start charging you some exorbitant rate without warning when you go over the cap. For data there are lots of options, though, and I think it could be handled pretty reasonably. Hopefully if the terms are explicitly stated (rather than buried in the fine print or unstated rules), the people will actually have more ability to choose a provider that will deal with them fairly...if such a thing can exist in the mobile phone market.

Re:It's for the best

[weaponsfree]

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.

It is possible to honestly offer "unlimited" data at N megabits per second, and that is how they market it today.

Google tells me there are, on average, 2629743.83 seconds in a month. If I'm buying "unlimited" 20 megabits per second service from my ISP, I can transfer approximately 321 gigabytes per month if I am constantly downloading at the maximum rate that we have mutually agreed upon.

I see your point, though: the lie is that you cannot really run your connection flat out without running afoul of the fine print. See Comcast's 250GB cap on their "unlimited" service, for example.

Which would you rather have?

A) 20 mbit/second "unlimited" service as described above: use it as often as you like during the month, and don't worry about your bill changing from month to month; the cap is effectively set by the 20 mbit/second data rate.

B) 100 mbit/second with a 321GB monthly cap; when you blow through the cap, you will likely pay through the nose for each extra megabit consumed.

C) Flat rate, metered, pay per megabit transferred. Perhaps with tiered pricing as practiced by some power companies.

E) Some other option?

Re:It's for the best

[internic]

It is possible to honestly offer "unlimited" data at N megabits per second, and that is how they market it today. Google tells me there are, on average, 2629743.83 seconds in a month. If I'm buying "unlimited" 20 megabits per second service from my ISP, I can transfer approximately 321 gigabytes per month if I am constantly downloading at the maximum rate that we have mutually agreed upon.

You're math is a screwy somewhere, because 20 Mb/s for a month would total about 6.57 TB, but you're correct that with a maximum possible data rate an unlimited deal is logically possible, since it translates to a finite amount of data. What I meant, however, is that an "unlimited" plan offered at any vaguely reasonable consumer price (and any reasonable bandwidth) is always a lie, because it is far, far underpriced. No matter what they tell you, they will not let you max that out over the long term*.

Which would you rather have? A) 20 mbit/second "unlimited" service as described above: use it as often as you like during the month, and don't worry about your bill changing from month to month; the cap is effectively set by the 20 mbit/second data rate. B) 100 mbit/second with a 321GB monthly cap; when you blow through the cap, you will likely pay through the nose for each extra megabit consumed. C) Flat rate, metered, pay per megabit transferred. Perhaps with tiered pricing as practiced by some power companies. E) Some other option?

As I've said, option A will never be available at a normal consumer price. Now, I would think it must be available at a sufficiently high price, but unless you really need it for some commercial purpose (or you're rather wealthy) you will almost certainly not be willing to pay what it really costs. Anyone purporting to offer you A for a normal-ish consumer price is almost certainly lying to you*. Option B clearly is undesirable. Option C is potentially okay, because it is honest. If you don't like be metered per-bit, a decent system would be one that would give you a cap and start to throttle you down gradually after you exceed it, but would, say, email you and give you the option to buy more data for that billing period. There are also ISPs that offer things they give names like "bursting" where you get some high data transfer rate for the first T seconds of a transfer and then it throttles down to a lower speed after that for a longer-term transfer. That approach seems pretty practical as well.

I think there is probably some variation or combination of these approaches that could work pretty well. I also think that ideally an ISP/carrier would let you choose among a few models to select the one that you like best. Some people would probably prefer a cap with throttling while others would just want to pay a flat rate. Then the only problem is communicating to the user what he is purchasing exactly. So the best solution might well be a default offering that is easy to explain and works pretty well for the average user and then an option for power users that would fit their needs a bit better (while still being an honest deal where you get what you pay for and pay for what you get).

* It is conceivable that an ISP would be willing to lose money on you as a customer if a) customers like you are extremely rare and those policies are making them lots of money on everyone else or b) they're trying to build up a reputation/monopoly and plan to lose money up front but change the rules on you later to make it back.

Re:It's for the best

[zippthorne]

Combo.

I'd like a flat-rate "unlimited"/always-on minimum plan with speed-boost (i.e. allow bursts of high speed as long as the minute or five-minute average is under the allotted bandwidth)

And combine that with metered packets (optimized for speed, latency, or whatever.): Set up a flag in the resource request packet or a side channel to establish which packets will be paid for and how many.

I'd like to be able to set my own cap on how many metered packets can go through, so that I'll never get stuck with an un-planned for bill.

There's nothing inherently wrong with metered pricing, and indeed, it provides an incentive for the telcos to upgrade infrastructure: if you're paying per-packet, more packets mean more money! But there need to be tools for the customers to be able to control their own costs, too, or else it's just a trap to gouge people.

For those in favour of "all you can eat" plans

[Twinbee]

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.'

Re:For those in favour of "all you can eat" plans

[Anonymous Coward]

AT&T have decided the appropriate price is $10/GB, plus an extra monthly fee so you have the privilege of tethering. Your absurd speculation about the benevolence of US telcos is completely unfounded.

Re:For those in favour of "all you can eat" plans

[novium]

Verizon charges something like $2/MB. It's also forcing everyone to add on an internet plan if they join/renew their contract/get a new phone. For all the comments about how it's really a matter of making the cost reflect the reality (etc, etc), it sure looks a lot like rent-seeking to me. Which is pretty much business as usual for the phone companies, I suppose.

Re:For those in favour of "all you can eat" plans

[Twinbee]

The off-the-top-of-my-head price of 0.01p per gig wasn't my point at all. I know it's wrong - I was making a much more important point.

I Have A Question

[DWMorse]

What happens if you're using a 3G Microcell over your existing broadband connection?

Are they proposing caps and extra charges for data transfer while you pay them for extending their network for free??

Re:I Have A Question

[lancejjj]

What happens if you're using a 3G Microcell over your existing broadband connection?

Well, it depends.

If you want that 3G Microcell to connect to the Verizon network, and have Verizon route and manage the connections and otherwise provide reliable data or voice transport service through Verizon's infrastructure on the back-end, then you should expect Verizon to charge you for that service.

On the other hand, if you do NOT want Verizon to provide that service to you, you simply don't need to use the Microcell device. In that case, you will not be using any of Verizon's infrastructure, and Verizon won't charge you any per-use charge of any kind. That's right: completely FREE.

Pretty sweet, eh?

Re:I'm so fucking tired of capitalism.

[pushing-robot]

Actually, the reason why wireless providers are able to get away with it is because the useful wireless spectrum is limited and thus governments require exorbitant fees to license it. Wireless is not an example of a free market but state-sponsored oligopoly.

Then again, concepts like "free market" and "socialism" are nothing but vague, idealistic theories that sound great on paper but never survive contact with the real world—especialy the human capacity for corruption.

This is about VoIP.

[barfy]

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.

Phone companies wet dream

[hpa]

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.

This is a load of crap

[bl8n8r]

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:This is a load of crap

[Bruha]

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.

Re:This is a load of crap

[xtal]

It's actually worse than you think.

Unlike FTTH and other technologies, real options exist to day for distributing very high data capacities over local wireless nodes fed from traditional fiber or CATV links, removing the need for expensive wiring to the home and exotic CPE devices. The limitations are far less on wireless devices than traditional links!

The biggest reason, IMO, lean third parties don't move into this space is regulatory.

Re:This is a load of crap

[luther349]

cell phone data is different then you fiber or phone line to your house. you dsl cable fiber etc are all dedicated lines for data. so we can use it all we like without costing the isp tons of money to service us or effecting the speed. cell phones on the other hand use satellites and towers. the data you use to view your pics movies downloads and so on are all shared with the data used for voice calls. this isnt all abought cost hear if you totally uncap the data for all on a large network your going to quickly overload the network cousing voice calls not to work drooped calls and all out slowness across the entire network. this is why all big networks have low caps to prevent such a flood. smaller or slower nerworks tend to be alot more relaxed with there data plans. boost mobile and its cdma for example has no caps but of course its not much faster then idsn or low end dsl so you really cant abuse it. its not true for all providers however cricket is 3g and have no limits voice or data. but there also alot smaller.

Re:I'm so fucking tired of capitalism.

[AHuxley]

Sure in your Zil limousine's, but the FSB and NSA will record every call and data packet.

Come to Romania

[Anonymous Coward]

You will get Unlimited data plans for 6-9 Euros(depending on carrier).
But i have never used more than 2 GB on my iphone.

Re:I'm so fucking tired of capitalism.

[ModernGeek]

If you don't like it, quit being the victim. Capitalizm works both ways, you know.

Oh hell no, I can't leave that one alone

[Anonymous Coward]

No, it isn't sweet. You're getting the shorter end of the deal. If you enter into an agreement to extend their network service so they can profit from it, but you get nothing from it, then they are flat out screwing you. If you do get something out of it - either monetary compensation (which can be used to offset the expense of using their network) or service compensation (favored bandwidth status in return for providing more/better access to their network) then it is a real business deal. Remember, if it's a one-way deal, it's just one party giving a gift to another. If it's a two-way deal, then it's a business transaction.

Stop shilling for the goddamn telco monopolies.

Re:Oh hell no, I can't leave that one alone

[Anonymous Coward]

If you enter into an agreement to extend their network service so they can profit from it, but you get nothing from it, then they are flat out screwing you.

I agree. But I personally wouldn't enter into an agreement where I would "get nothing out of it".

I recommend no one enter into a zero-value agreement.

Sounds like spitting at an opportunity, again.

[Anonymous Coward]

I don't see why so many people are whinning. {unless it is that neejerk conditioned reflex against a profitable business opportunity}

This cell phone business is like legalized drug dealing (as in heroin).

Give them a taste and they are hooked for life.

I would think the smart people would get off their duff, gin up the business plans, see the venture capitalists, and start their own cell phone companies.

Insensitive clods.

[BrokenHalo]

'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.

Re:Insensitive clods.

[cbiltcliffe]

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.

Re:Insensitive clods.

[Bert64]

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...

The original story is misleading

[ewieling]

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.

Re:The original story is misleading

[RoboRay]

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).

Verizon's unlimited data plan is for smartphones. That's why the article was talking about data plans for smartphones. They were not talking about USB dongles for your computer.

If you want an unlimited data plan for your computer, get a smartphone and tether with one of the 3rd-party proxy clients. If you tether through Verizon's service, you'll still be limited to the same limits you have now while tethering.

The Powers of Price Discrimination

[Bourdain]

Cell phone operators in the US domestic market live or die based on the principles and availability of price discrimination.

Long story short, if carriers starting charging some flavor of reasonable rates that approximate cost (such as would occur in a perfectly competitive market whereas what the US has more closely approximates an oligopoly) 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 they use all but a couple megabytes a month.

Further, like with voice, the true cost driver of, virtually any data use, is the maximum available bandwidth (and, to varying extents, the underlying quality of service/latency on the connection). Not all phone calls use the same amount of data but they are billed the same (e.g. if you had a long phone call where you are on hold with silence for a long time, that silence is largely compressed).

The carriers realized that most phone calls use a similar amount of data per minute. Accordingly, they decided that a reasonable and intuitive proxy to charge by bandwidth is to charge by peak or off-peak minute. They understand, like with the blackberry business users, that people have a different demand curve (i.e. they are less cost conscious, on average) during business hours for a variety of reasons.

With data on the other hand, there isn't a good intuitive proxy that makes the industry money to split up bandwidth. If carriers implemented something like peak and off-peak rates per megabyte it would decimate the money they are collecting from blackberry users, their cash cows. In fact, blackberry users are further "discriminated" against in that if they access a blackberry enterprise server, there's typically a surcharge from the carrier despite it not costing the carrier anything additional (verizon is guilty of this). This charge would also disappear with such metered usage.

The telecoms are in a tight spot though I'm not losing any sleep over it. They could get away with what they've been doing with some laughably price discrimination based plans (e.g. ~$20 for 10mb of blackberry data or $20 for 250mb of ipad data) or congress could allow some meaningful wireless carterfone legislation to pass which would eliminate this price discrimination.

I doubt the lobbyists would allow that :)

Re:The Powers of Price Discrimination

[butlerm]

It is unlikely, even in a perfectly competitive market, that there wouldn't both be be a minimum monthly charge (for having service at all), and data plans where you get up to so many GB in a base charge, and some overage fee or throttling after that.

The former is a simple matter of cost, the latter is due to the strong preference on the part of customers for fixed monthly rates, plus the ability (as you describe) to maintain a sizeable per-customer profit margin even on those that do not use very much data, without driving away those that use more typical amounts.

The real scam is where companies charge overage rates that are radically out of line with the average cost of delivering bandwidth. They make a lot of money that way, of course, but it is such a shady practice it ought to be regulated out of existence. Customers have to play a game to change plans all the time not to gain some marginal advantage or another, but to avoid being sent to the poor house.

Re:The Powers of Price Discrimination

[Bourdain]

It is unlikely, even in a perfectly competitive market, that there wouldn't both be be a minimum monthly charge

I disagree, even right now, so long as I don't have a phone classified as a corporate phone, I can use data a la carte (granted at a cost far in excess of average cost, but still cheaper than the lowest available plan).

strong preference on the part of customers for fixed monthly rates

Again, I disagree about this as a generality, prepay is popular and economical in other less oligopolistic markets. Further, if blackberry users could pay a la carte for their data, I'm sure most of them would love to since it would cut their $50/month to $3-$4/month even at the bloated current a la carte rates.

The real scam is where companies charge overage rates that are radically out of line with the average cost of delivering bandwidth.

Really? If this happened that often, there would be an outcry, that's why most carriers force people to buy a "virtually" unlimited data plan. I don't think the carriers are making that much over someone who accidentally uses too much data. Most people don't come close to their limits on a plan.

Customers have to play a game to change plans all the time not to gain some marginal advantage or another, but to avoid being sent to the poor house.

They can't change plans too often because of ETF's and hardware subsidies. I in fact have the same plan which I've been renewing since 2003 with verizon since it has slightly better a la carte data charges than anything currently available.

Re:The Powers of Price Discrimination

[butlerm]

"The real scam is where companies charge overage rates that are radically out of line with the average cost of delivering bandwidth."

Really? If this happened that often, there would be an outcry

Historically, it has been pretty much standard practice with voice minute overages. If the cell phone companies don't adopt similar tactics with data plans in the future it will be a considerable victory. When the marginal rate for something goes up instead of down with increasing quantity, something is usually very wrong. They call it "economies of scale" for a reason.

It's called reality.

[raehl]

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 and get crap bandwidth when 3,000 people show up later in the day.)

Anyway, bandwidth isn't unlimited. The more of it people use, the more network capacity you need to handle it, and even then you still have limits on the amount of data that can move through the air to one tower at one time.

I don't see why anyone expects a company to provide something that has a marginal cost and no natural consumption limit in an unlimited quantity for a fixed rate. That would be like having an agreement with the grocery store to get all the groceries you want for $400/month.

Frankly, I don't see why the idea of paying per meg or gig is such a big deal when most people already pay for an allowance of minutes. God forbid carriers adopt pricing policies that make sense!

Re:It's called reality.

[grapeape]

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 to meter their usage when they are constantly bombarded with "look our wireless can stream movies and music and you can video chat with grandma", perhaps comercials for data services should be required to have big warnings like cigarette packs (Warning usage of this service as advertised could result in excessive billing).

Re:It's called reality.

[Jackie_Chan_Fan]

Right, the more people use it, the more data is required.

But, if more people are using it, doesn't that mean verizon has more premium subscribers than before?

If they could afford the data requirements for the lower user base, they should certainly be able to afford it for a larger one.

I'm all for it

[obarthelemy]

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.

Re:I'm all for it

[Anonymous Coward]

Pay-as-you-go, m'man, pay-as-you-go. If you barely, barely use any data... just stick with for all intents and purposes no plan.

Why is that "collusion"?

[raftpeople]

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?

Re:Why is that "collusion"?

[kaizokuace]

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:Why is that "collusion"?

[Hognoxious]

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?

Re:Why is that "collusion"?

[murrdpirate]

"but it sure doesn't do anything good for the customers." Slashdotters probably use more data than most, so capping is always seen as a bad thing. But anyone who was staying below the cap before it existed (probably most people) will not be negatively impacted and in fact will benefit from increased speeds.

Re:Why is that "collusion"?

[kaizokuace]

If lil ol' me could find hard evidence I think those companies would be in a lot of trouble.

Re:Why is that "collusion"?

[Anonymous Coward]

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

No, I don't think they provide us with "hard evidence" without a lot of digging, but it's pretty obvious that some conspiracy is involved when telecommunication companies are granted exclusive access to large swaths of the radio spectrum that they maintain with a large lobbying presence in Washington. Without coordination, their efforts would fail.

Re:Why is that "collusion"?

[chazbet]

Collusion may be explicit or implicit but antitrust laws should be written and enforced so that no one firm has the market power to lead or lower prices.

Re:Why is that "collusion"?

[Macrat]

duopoloy

Re:Why is that "collusion"?

[ScentCone]

laws should be written and enforced so that no one firm has the market power to lead or lower prices

What a bunch of crap. Are you also suggesting that no company should be allowed to suddenly find a way to do something better, and thus offer what they do or produce at a lower price? It's just not fair to be more productive than the next guy, right? Yes, way to reward increases in productivity, there. Why you want to make the always-encroaching Nanny State even more powerful, and move to that delightfully effective central economic planning model (which has worked so well throughout history, right?), I'll never know. This model does seem to be favored by the lazy, though, so maybe that's it.

Re:Why is that "collusion"?

[Anonymous Coward]

Yes, the "conspiracy" is that the same market forces drive all these companies to do the same things, at roughly the same time. They don't need to communicate to do that. For example: the government announces legislation. Company A realizes the effects the legislation will have, and responds wotj strategic plan X. Company B realizes the same thing, and uses the same plan, because they will be affected in the same way as Company A would have.

Re:Why is that "collusion"?

[jimmydevice]

Like the stock and commodities markets and the market makers?

Re:Why is that "collusion"?

[mysidia]

Collusion is because they have coordinated the change with a change by their competitor, AT and T.

There is no reason for them to make that particular type of pricing change at this point in time, which makes pricing poorer for the consumer, other than their competitor has just made that same change.

Re:Why is that "collusion"?

[mysidia]

Two companies out of the blue decide to suddenly impose a usage charge on a service that used to be free? (Bits of data transfer)

This is not 'price matching'; this is changing conditions of service to create mutually beneficial revenue opportunities for both companies.

And it has been coordinated, as the changes for both companies are announced in close time proximity.

Do you have a reasonably believable explanation for this other than collusion, planning, or orchestration?

Re:Why is that "collusion"?

[vlueboy]

But anyone who was staying below the cap before it existed (probably most people) will not be negatively impacted and in fact will benefit from increased speeds.

Until entities like youtube go from 480 to HD on all their videos (either by forced upgrade or general collusion on part of the content makers.) Eventually you cannot find anyone producing low-bandwidth items. Think of how many 1megapixel portable cameras are sold today. Now compare to all those pesky, huge 12Megapixel photos people e-mail you un-resized.

The non-unlimited services that ISPs are moving towards will be increasing my monthly fees thanks to the collective ignorance of content creators. It all adds up to a smaller wallet if I'm a John Doe who can't tell 0.5 hours of his favorite non-HD series comes out to at least 100MB.

Re:Why is that "collusion"?

[murrdpirate]

I think you really underestimate people. I think the general public understands that movies consume a lot of data, and I certainly think most smart phone owners do. Even if some of them didn't, people generally don't stare at their shrinking wallet as drool drips of their chin. They can learn.

Entities like youtube can adapt too. If people feel constrained by their data limits, they will demand that content providers be cognizant of this. Many content providers already are, simply because it's too fucking slow to watch hi-quality videos on a cell phone (because of people like you who use 10 GB a month!!).

AT&T is planning on putting a cap at 2GB a month. According to AT&T, 98% of their customers use less than that (and 65% use only 200 MB!). http://www.wirelessweek.com/News/2010/06/Business-ATT-Data-Use-New-Plans-Data-Services/

Re:Why is that "collusion"?

[DavidShor]

It's a pretty standard result in Game Theory that you can collude without active communication. It's equivalent to the iterated Prisoner's Dilemma problem(Though in this case, "cooperation" is bad for consumers). You can have a strategy of "tit-for-tat" that goes as follows: If your competitor lowers the price, then you'll match that price decrease. But if he doesn't, then you don't. If he raises the price, then you raise it too. If you act according to this strategy, it doesn't take long for your competitor to figure it out, and he'll raise prices to his profit-maximizing level. So long as the barriers to entry are high enough, this the end result is permanently higher prices for consumers. This doesn't require any planning or orchestration, but the effect is exactly the same.

So yes, this is where regulators should come in and force competition back in the system.

Re:Why is that "collusion"?

[vlueboy]

Understimating people would make sense if there were less spyware and scams, out there. The only reason PC's are clean these days is that companies underestimating people have taken to protecting their brandnames by adding shovelware Antivirus systems that actually protects their machines beyond last decade's levels of Windows 98 and pre-firewall XP.

The tech business of spyware removal still thrives, and it's because of clueless who click on things. Getting back on-topic, these same users are the same ones who can't be expected to know their usage levels any given months. Even /. users mostly estimate usage through flashed routers or single-OS "guesstimate" utilities.

The general public knows that they're paying X for broadband, but don't know the difference between 3MB and 6MB, or fiber. They only know "faster because the advertisement said so" or "too slow on my own machine, so I have to upgrade." The data from AT&T only says that either they're lying, or they should ONLY meter that %2 after properly notifying them. AT&T is the same company that is failing badly at handling iPhone usage for 100% of people, so I doubt they're aiming at just targetting a measly 2% when they can pork barrel the rest of us.

They are "overestimating" users on purpose because we know full well who will benefit if you open up the 98% that are beneath the 2GB number to "accidentally" racking up high bandwidth every few months. The problem is when average lusers hear about new "alternative" sites from OUR already-alternative group, and have no idea how to protect themselves in ways that we take for granted.

Re:Why is that "collusion"?

[vlueboy]

Understimating people would make sense if there were less spyware and scams, out there.

Clarifying my sentence: "Your saying I'm underestimating people here would make sense if we saw no spyware and phone/web-related scams affecting our uneducated masses."

Scams are still a major issue regardless of computers, and spyware works because nobody thinks it's odd that their PC's web-less popups are out of ordinary, or dare do much about it without a helping hand --they only balk when the PC becomes unusable or upon several consecutive infections if they were careful to know what we did to clean them up. Matter of fact, none of the family PC's where I install antivirus/antispyware software had updates and scans manually run after I left, even if I gave specific instructions to the owner to avoid causing a relapse ending in my return to use the product for them.

Computers are an elective field, and not something everybody understands like us. Because our field is stupid, we don't realize that in any other type of product there are usage warnings mandated by government bodies, like "do not drink this liquid soap." People who have been trained scoff at the training label, but in our case, trainees are far fewer than the general populace.

Re:Why is that "collusion"?

[AndersOSU]

Agreed, and I think you nailed it.

I'm willing to concede that unlimited data is a bad business model and VZW was looking for a reason to get out of it. However, regulators ought to come in and look at the prices for data. I'm not expert enough to know but $10/GB could be reasonable, or it could be price-fixing .. but someone ought to figure out which.

Preaching to the choir here, but while they're at it they ought to look at SMS message prices. There is no way all the carriers settled on the ludicrously high $0.25/message without implicitly or explicitly colluding.

What is the point?

[Anonymous Coward]

What is the point of developing and advertising 4G and devices capable of great things using high bandwidth then the same breath say by the way we are taking away the ability to actually make use of it via neutering the bandwidth capacity? Make up your mind. Are you innovating or stepping backwards? You cant sell the new devices and new faster services and then say by the way you cant actually use them... sign here.

Data Plan

[dontgetshocked]

It's not like we have a right to expect performance and bang for our buck or anything nor should we be surprised when they inflate early termination fees.The customer has rights and expects value,who told you that?

I am okay with this...

[Chees0rz]

If they have multiple tiers to choose from, all less than what I am currently paying for unlimited.

I pay $30 a month (before discounts) for unlimited. I've used 620MB of data with 1 day left in my billing cycle.

Put me on a 1-2GB plan for half the price, and I'll be happy as a clam. I have heard way too many times that smart phones and data plans are too expensive. This is going to open a market for a lot of people to have connected devices. This may foster competition, forcing networks to build out infrastructure. And before you know it... unlimited could be back on the table for the masses, someday. Or am I blindingly naive and optimistic?

Of course, then there is always that one month you go over, and they charge you up the ass. They need to rework this to be a little more fair IMHO. I am too lazy to do the math and see how much markup they drill you with if you go over your subscription, but something tells me it's around 500%.

Terrible compared to Finland

[negge]

I must say that this whole wave of operators suddenly getting rid of their unlimited plans makes me feel lucky for living in Finland. Over here we have at least three or four major providers (Sonera, Saunalahti/Elisa, DNA, Welho) who sell 3G plans, and the only option is and unlimited plan, and yes, they are really unlimited in the sense that there are no artificial bandwidth caps, no transfer caps and no fining of heavy users (just like all our land-line Internet connections).

An unlimited data plan costs about 15€/month, and the price difference between the providers is quite small. The only downside is that they each own their own cell towers which only their own customers can use (unlike GSM, which is available to everyone).

I used to think this was bad.. but...

[josepha48]

.. I looked at my data plan and I have unlimited. I use about 200mb a month on my phone. I think most people do not use much more than that, and I have talked to a few people I know. Yes skype and other voip will loose this one as it means it will cost for that by bandwidth.

Few people actually use more than 2 gig and that is a lot of data. On a home land line you are getting os updates which can be huge, but on cell phones the apps are small and the updates are small too, so the bandwidth is much less. Unlimited plan for all means that certain few that use HUGE amounts of bandwidth are paying less per byte than those that use less bandwidth.

Figure everyone paying 50 a month. (USD) The person that uses 5 gig is paying 10/gig, but the person that uses 2G is paying 25/gig. The person that uses only 200mb is now paying 50 for .2Gig.

Unfortunately the opposite effect comes into play for the phone companies. If someone is paying for 2Gig then they will want to USE that 2G every month. So if their unlimited bandwidth has them at using 300mb and they don't want to get att's 200mb plan then they will get the att's 2Gig plan. As with cell minutes people think they need to use them all ( att's selling point on rollover minutes ). So people who use 300mb may start now using closer to 2G because they feel they are getting cheated.

It's funny because companies used to charge per mb to start with and had small plans.

Oh and basically what this is all about is the iphone now has a camera in the front for video. ATT's network cannot handle the extra bandwidth of everyone using it so that will become a premium service. Under a 2G + video plan at some point I am sure. Also verizon is thinking that it will end up with some video capable phones soon too, so they are gearing up.

I'd suggest people look at how much bandwidth they actually use on their phones before complaining too much.

Re:Unlimited already means 5G...*

[tunapez]

*Unlimited already means 5G... unless your contract was with alltel or your VZW was contracted prior to ~6/2008.

I have one of each and was shopping for alternatives the other day...it's only a matter of time until they force me to renew my truly unlimited, grandfathered accounts w/ new 5GB caps. I use one at home due to lack of hard-line options and occasionally use > 5GB per month(guesstimate, don't run the software). I could swap them out mid-month, but if there's going to be a new contract I would rather go somewhere else. That's when I saw T-mobil does NOT charge for over 5GB useage, but they will add you to the MUL and throttle your connection post 5GB. I'd rather risk a slow connection than be subjected to VZW's definition of penalties, which may change at any time.

Why all or nothing?

[istartedi]

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

[koan]

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.

Steak Makes Me Orgasm

[Anonymous Coward]

Honestly, she said that.

Re:I'm so fucking tired of capitalism.

[Dragon213]

They already record all that, so where's the downside?

Why not?

[bynary]

...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.

Actually that's the second thing I want. The first thing I want is for ISPs to stop weaseling out of their advertised services.

Rate Cap

[GrEp]

Verizon should go two tier and rate cap. You get unlimited at 3G bandwidth, and then pay separate for data over so many GB when you have your phone in full bandwidth mode. One easy menu option, everybody stays happy.

Re:Rate Cap

[GrEp]

Marketing campaign I am thinking guy with a bucket or water hose going at a pretty good clip. Some line concerning the need for something high bandwith like downloading the full Lord of the Rings trilogy off of Netflix, then guy clicks the menu option for 4G and some huge dude with a much bigger bucket or hose douses the guy.

this makes the wifi option more important

[roc97007]

It seems like this makes having a wifi option on your smartphone even more important. In my opinion, the fact that 3G is butt slow on both AT&T and Verizon is reason enough, but now that data plans have a potential to cost a lot of money, using local wifi makes even more sense.

I wasn't sure from the beginning (in the old Treo days) that data over cell was ever a good idea. The data rate was feeble and the cost of an unlimited data plan for a single phone was, and still is, -- let's face it -- as much as the cost of a much faster connection for every computer in your house.

But I believed the marketing, that each generation was faster (it was, in very small increments) and pretty soon we'd all have portable broadband everywhere there was a cell site, despite stories here and there that the major carriers hadn't built up anything like the infrastructure they would need to provide this service to significant numbers.

Now the systems are overloaded, the response is still crap compared to wifi, and it's about to get a lot more expensive.

I'm thinking it's time to Just Say No. Wifi has enough saturation that it will be my first choice from now on (which means I need to dump the Blackberry Tour, which is cell only) with the data plan a last resort.

They tried, they failed, the prices are going UP instead of DOWN. Time to find another solution.

Re:this makes the wifi option more important

[DaMattster]

Mod the parent up. This is exactly what is happening! Cell-based data plans are very expensive when compared to wifi and other options. Prices are going up when the economy, despite what the financial news wants us to believe, is not improving and we still have 15+ million unemployed. Go figure!

Down in VA

[Anonymous Coward]

Well, as an addendum, Verizon FIOS is down throughout Virginia today. Something bad happened. Usually the fiber ring will route the other way, but not this time.

Rising Prices

[jmactacular]

Is it just me, or does it seem that while prices for increasingly more powerful hardware have been going down over the years, prices for mobile services have been going up. Weren't text messages like five cents originally? Now T-Mobile dings me 20 cents a text. Shouldn't these services become LESS expensive as efficiency improves, economies of scale grow, etc...?

Re:Rising Prices

[Coren22]

Text message is a bad example. A text message consumes a control channel connection on the BTS, if too many people are sending text messages, it can cause phone calls to fall to go through, or for the BTS to have to drop a call to release a control channel. The cell phone providers have been increasing the cost of text messages to reduce the usage, as the network simply cannot handle massive amounts of text messages. This is a technical limitation of the hack that is the SMS.

As I am sure most people don't know what a BTS is, it is the physical hardware behind the Cell phone antennas:

http://en.wikipedia.org/wiki/Base_transceiver_station

your argument is flawed, they're unnecessary

[Chirs]

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.

Re:your argument is flawed, they're unnecessary

[commodore64_love]

Take a look at VirginMobile. It only costs $5 a month and is great for if your car breaks-down.

As for laptops you can get a used XP model for less than $100.

Hmmm

[OrwellianLurker]

I have an unlimited data plan with Verizon.... I don't even really use it very much, but if they kicked me off and started to charge me per megabyte I would probably use it even less... Fuck Verizon; I can't wait until I get to dump them.

More Bandwidth

[SLOviper]

"The more bandwidth that you make available, the faster it will be consumed."

Making more bandwidth available does nothing for demand.
The only case where that statement holds is if their network is currently in saturation.
Telling.

They can't handle the load

[Snaller]

I suspect the reason they are doing this is that they can't really deliver the product they are selling, they have gotten by by hoping all their paying customers are not going to use bandwith - and now they fear they might.

Two things will happen:

Better providers will come along and provide unlimited roads for the information super highway OR mobile internet will die off.
Internet didn't really take of until you had the all you can eat buffet - if its metered people are going to have the feeling "I gotta get of line its costing money!" and the mobile net will wither away.

Personally I think all of these providers are way too greedy - bandwith should be a lot cheaper than it is.

But then Google is working on giving the world free internet - so hang in there.

Re:They can't handle the load

[luther349]

thats what happond with dialup. free providers spread like wildfire and dialup prices nosedived. if google delevers free broadband to all that's what will happen with pay isps. thats the only way to force broadband prices down they need to compete with free. its the same for cell company's more providers need to come up with true unlimited 3g yes there are some like cricket but they are small and don't have a large user base or very large coverage.

Re:I'm so fucking tired of hooknosed kikes

[Anonymous Coward]

Marx. Goldman Sacks. Left or right, it's jewboys in charge.

verizon

[helix2301]

You knew this was coming. If AT&T can do it why can't we?

Welcome to a free market

[raftpeople]

"It may or may not actually involve collusion but it sure doesn't do anything good for the customers."

Do you realize how many price changes went into effect today across the US? What percentage of them do you think were "good for customers"?

I assume you know this, but your comments (and previous poster) have me wondering: the goal of a company is to take as much money as possible from customers and provide the minimal service in return such that profits will be maximized and the survival of the company will not be put in jeopardy.

A company like Verizon does not exist to make sure you have some inalienable right to unlimited service.

Re:Welcome to a free market

[AndersOSU]

Wouldn't it be nice if there were some sort of index that would measure that and let us know?

(FWIW, last month taken as a whole, price changes favored the consumer by 0.2%)

Industry-wide there is a 5gb limit on tethered

[Anonymous Coward]

As cell phones / ipad clones become more functional and can be used more like netbooks, it is inevitable that limits will hit cell phones too.

Totally inaccurate assessment

[SuperKendall]

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.

Oh, it's something else for sure - it's bullshit.

Because that is not at all what happened.

For 99% of existing users, the new AT&T plan SAVES MONEY and has NO IMPACT on how much bandwidth they use.

For instance, I am a heavy iPhone user - and have never crested even 1GB of data in a month, let along 2GB. But *if* I wanted to drop my current unlimited plan (which AT&T lets existing customers keep as long as they like) I pay $5/month less for than I do now, for exactly the same data usage I do today. The actual impact to customers is a savings in monthly fees, if they decide to drop the unlimited plans. Why on earth would I prefer to pay more, per month, forever for something I never use?

That is not collusion sir. That is common sense! Nothing in real life is "unlimited" nor is bandwidth. If you think so try going into an ALl-You-Can-Eat buffet and try lingering for a few days. Businesses are doing this because only now are consumers actually getting devices where the upper limit of bandwidth that can be consumed in a month starts to cost more to the business than they obtain from usage fees. So it's pretty obvious that every company is going to HAVE to drop unlimited plans.

Furthermore, let's say you were a super heavy data user on AT&T. What is your option? To pay $10/1GB/month more if you go over 2GB. That is not an unreasonable fee. The future is slightly lower costs for average users, with a lower cap but with somewhat reasonable overage fees.

Re:Totally inaccurate assessment

[BrainInAVat]

People don't use much data now, but pretty soon iPhone users are going to have hi-def video to upload, Netflix, video calling, multi-tasking so that they can listen to Pandora in the background.. all just in time for metered data. And even if you don't break the limit usually, now you have to pay attention to it, always monitoring your data usage, especially when you're about to use any of the new features.

Re:Totally inaccurate assessment

[SuperKendall]

People don't use much data now, but pretty soon iPhone users are going to have hi-def video to upload, Netflix, video calling, multi-tasking so that they can listen to Pandora in the background..

Most of which will still go over WiFi where people mostly hang out.

I use WAY more than 2GB of data on my phone, per month. But like I said, I could possibly even use the lower end plan because almost all the time, I'm near some kind of WiFi signal, either home or work.. Only traveling do a really lean heavily on the network.

And even if people do go over, 1GB for $10 is not unreasonable. That alone would probably cover most people's pandora usage alone for an entire month, the one thing that is likely to be a larger contributor to bandwidth than anything else (though I'm thinking not much more than today since people already use the Pandora app heavily).

Re:Totally inaccurate assessment

[BrainInAVat]

I wonder how many people actually have regular access to wi-fi. The average person who doesn't have a laptop probably doesn't have wi-fi at home. I don't know if most people even have wi-fi at work. Considering how often I see people hunched over a phone texting or doing some other non-phone call activity, I think that a lot of people out there will be using data over their 3G.

And imagine when 4G is readily available. If you can get that kind of speed then you're not going to want to wait until you're in a free hotspot. That's half the idea of a smart phone... using it anywhere.

That sounds like how things are

[SuperKendall]

If their new data plans include limitied but reasonable data allowances for a lower cost, I'm actually ok with that.

AT&T is doing exactly that. They have a low-end plan that gives you 200MB in a month, for less than the higher end plan that gives you 2GB a month.

Reviewing my actual data usage, I could make do with the lower end plan because as you say - I'm around a lot of WiFi frequently.

Even the 2GB plan is $5/month cheaper than what they were charging for "unlimited" use. But existing customers can keep unlimited as long as they like, even when they get new phones.

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

What smartphones do that? I thought pretty much all of them used WiFi when possible. This gives you not just a speed advantage but it's cheaper to power the WiFi radio than 3G... I know the iPhone uses WiFi preferentially (automatically joining networks you have asked it to join in the past, like for instance your home) and I'm pretty sure Android works that way as well.

Thank you, Sprint

[longbot]

I've been a Sprint customer since 2003 or so (the pre-EvDO days, back when data plans were still called "vision"). Sprint has consistently offered a better value than Verizon in data plans, especially once the "unlimited everything" plans started rolling out in the last year or two. Boneheaded moves like this will only cause people serious about mobile data to jump ship to networks with more sane policies. Perhaps after Verizon loses a large enough slice of their customer base they'll reconsider?

no regrets

[merockstar]

I had my Verizon service turned off completely earlier this year.

I do not miss having a cell phone, and now my decision feels super justified because I would have been interested in a data plan if I were going to continue having a cellular connection, but now that would be laughable decision.

I'm actually proud of myself for predicting the impending price gauging.

Is there any unlimited data plans left?

Call the federal regulators...

[Anonymous Coward]

Has somebody been checking these people for collusion? It certainly seems possible...
Regulator time!

Re:I'm so fucking tired of capitalism.

[Anonymous Coward]

If you don't like it, quit being the victim. Capitalizm works both ways, you know.

Can't we find a system that doesn't boil down to being either a victim or an abuser?