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Verizon Wireless CEO Lowell McAdam  (Source: Associated Press)
Verizon CEO kicks customers in the gut when it comes to LTE data

Most of us take our smartphone's "unlimited" 3G data plans for granted. We pay the $30 data fee (in addition to the charge for monthly minutes) and surf away with little regard for data overage charges. We do this because using a smartphone in normal day-to-day duties rarely would consume gigabytes of data within a month which would tip off wireless providers like AT&T and Verizon.

Those who tether, however, be it through unauthorized means like jailbreaking on the iPhone or through officially sanctioned tethering data plans, can find it easy to consume gigabytes worth of data in a month. This comes from people tethering their notebooks and other internet-capable devices to the phone which make sucking down copious amounts of data easy.

With this in mind, Verizon appears to be taking a preemptive step to curb users who consume large amounts of data. According to the Financial Times, Verizon wants to put in place a tiered pricing strategy for LTE (4G) data plans. What makes this move even more puzzling to potential customers is that Verizon Wireless CEO Lowell McAdam recently stated that the cost of carrying 1MB of data over its upcoming LTE wireless network will be "half to one-third the cost" of Verizon's existing EVDO network.

What is even more interesting is that Lowell stated, “I expect people will have four or five or perhaps even more devices they will connect to the network” -- but he went on to say that these same customers would prefer to buy "buckets" of data by the MB for this usage scenario.

For most people connecting four or more devices, conventional wisdom would say that they would want an unlimited plan to avoid overage charges; but perhaps Lowell knows something about Verizon customers that we don't.

Lowell went on to add that his company will have three to five handsets next year that will work on its LTE data networks. Verizon Wireless also expects to switch over to LTE voice traffic by 2012.

Sprint, which is offering competing 4G data coverage via WiMAX, is launching its HTC EVO 4G smartphone early next month. That phone will come with attached with an unlimited 4G data plan, albeit with a $10 higher price tag (per month) than what most customers are used to for their current 3G data plans.



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Makes sense, though...
By TheHarvester on 5/27/2010 2:15:08 PM , Rating: 4
I mean, you've got to figure people will, if possible and if the reception is alright inside their homes, quit their cable or whatever wired solution they've got. You've got your cable connection with you already, and internet TV's ubiquitous enough that you can pretty much get what you want online. They shell out the extra 30 bucks a month for the 4G unlimited and have their internet with them wherever they go. At least by limiting they retain some control over how far this can be stretched, so you can't really blame them. As long as they're accurately representing the plan (not Comcasting and throttling traffic on an unlimited plan), seems legitimate to me. But hell, I'd be willing to shell out quite a bit for an unlimited connection that will replace my cable bill and allow me to have my cable-speed connection wherever I go.




RE: Makes sense, though...
By R6Raven on 5/27/2010 2:30:15 PM , Rating: 2
Agreed for the most part. At least they're telling you upfront not to expect it. Alternatives are saying 4G will cost the same as 3G, then tacking on a mandatory $10/month, or just deciding that your "unlimited" plan may be capped...


RE: Makes sense, though...
By MozeeToby on 5/27/2010 3:18:44 PM , Rating: 5
Acceptable: Being told in advertisements and in the store that your 4g plan will be capped at X gb, after which you will automatically be transitioned over to 3g.

Unacceptable: Invisible caps. Unclear advertising. Massive overage charges. Service outages/cutoffs.

If you're upfront about it at time of sign up and in your advertising you're free to model your charges however you want. It's when no one knows about the caps until they are broken or people get sent $20000 cell phone bills that things get retarded.


RE: Makes sense, though...
By mcnabney on 5/28/2010 10:41:24 AM , Rating: 2
Those $20,000 phone bills come from parents who give their precious little snowflake an aircard, which he promptly uses to stream torrents 24/7.


RE: Makes sense, though...
By inperfectdarkness on 5/27/2010 2:43:39 PM , Rating: 2
can't see how this makes verizon a better choice than sprint though (apart from customer service, and a whole other litany of things).

sprint still has the only truly unlimited smartphone plans; which (as someone who is going to bend the rules and tether it without paying additional fees) is truly a blessing.


RE: Makes sense, though...
By mcnabney on 5/27/2010 3:55:46 PM , Rating: 2
You can tether the Palm products on Verizon right now (Mobile hotspot) and I haven't heard anything in the media about Verizon blocking all of the Androids when Froyo (2.2) comes out and it is enabled in the OS.

I think their data plans go up to 5GB per month before getting overages. It sounds like the CEO is talking about data buckets, kind of like minutes. In a few years it is going to be all MBs so expect charges to migrate to that type of metering.


RE: Makes sense, though...
By mofo3k on 5/27/2010 3:57:18 PM , Rating: 2
Simple, Verizon works at my house, Sprint does not.


RE: Makes sense, though...
By seamonkey79 on 5/27/10, Rating: 0
RE: Makes sense, though...
By TheRequiem on 5/27/2010 5:55:12 PM , Rating: 5
I'm getting tired of the coverage issue. Verizon or AT&T don't work in plenty of areas. Sprint has 4g services with unlimited data for cheap. My question is why pay these absurd prices for Verizon who want to cap our INFORMATION age of Internet use? Dumb... I have YET to be with ANY cell phone company that doesn't have problems.


RE: Makes sense, though...
By mcnabney on 5/27/2010 11:10:16 PM , Rating: 2
Well, Sprint has a lot of problems.

First, they haven't shown a quarterly profit in almost 4 years. Yeah, I don't know how they stay in business either.

Second, Sprint doesn't even operate their own network anymore. That has all been contracted out to Sony/Ericsson.

Third, Sprint really hasn't built a 4G network - Clearwire has. And this gets even better. Clearwire has been hinting that they might 'upgrade' to LTE by 2012.

Fourth, since Sprint isn't making any money they can't afford to pour the billions of dollars into the network that AT&T and Verizon do.


RE: Makes sense, though...
By SirKronan on 5/28/2010 4:22:23 AM , Rating: 2
I think they're just preferring to err on the side of caution, to avoid things like all the issues iPhone users had with data plans when they became otherworldly popular.


RE: Makes sense, though...
By inperfectdarkness on 5/27/2010 2:50:59 PM , Rating: 2
the hassle of setup is another thing. i don't mind tethering when i'm on the road/overseas, but having to reconnect my phone to my computer every single day when i get home from work is a PITA.

now maybe if sprint's $10/month was to support an add-on which was a "fixed" wi-fi 4g connection in my house; then i could easily stomach it. hell, i pay $45/month for cox right now; and with a stable 4g internet source at my home (separate from my phone) i'd have already ditched the cable.


RE: Makes sense, though...
By mcnabney on 5/27/2010 3:24:05 PM , Rating: 2
The cost and capacity for cable to deliver a GB is far, far, far less than to deliver it wirelessly.


By inperfectdarkness on 5/27/2010 3:48:50 PM , Rating: 2
perhaps to install the infrastructure; but the maintenance costs of it are lower. installations in individual homes are a snap (don't require a "cable guy"). no wires accidentally getting cut. no carrier poles getting taken out by drivers/thunderstorms.


RE: Makes sense, though...
By Jedi2155 on 5/27/2010 2:58:44 PM , Rating: 2
Won't work as well for those with latency sensitive applications. I've tried VOIP (Ventrilo) on my laptop through my USB tethered T-Mobile G1 and would get pings of between 70-300 ms. Horrible for games.


RE: Makes sense, though...
By MrBlastman on 5/27/2010 3:12:55 PM , Rating: 2
The thing I'm most curious about is the latency. For hardcore FPS gaming on the PC, latency is king--the lower your ping and packet loss, the better. Latency makes a huge difference in your ability to perform in tournament play.

I suppose, that gets me back to my point, how is the latency on these tethered connections? Can I expect to see 15 - 30 ms ping times? It is hard to compete when you have a 100-150 ms ping and everyone else has around 30 - 50 ms.

To the article--Verizon is protecting themselves. They aren't dumb. They realize that people will try and game the system to reduce the fees they pay. Somehow... they have to manage to keep their revenue streams strong.


RE: Makes sense, though...
By mcnabney on 5/27/2010 3:42:41 PM , Rating: 2
If latency is important you won't like wireless.

I get about 60ms ping on Roadrunner and about 160 on a Rev A aircard.

I know. It is amazing how businesses are actually trying to make money. When did that happen?


RE: Makes sense, though...
By jimhsu on 5/27/2010 5:24:28 PM , Rating: 2
It's the poorly kept secret of the wireless world - latency frankly sucks. Not as in 100 ms sucking, but frequently spikes of up to 300, 500, or even a whole freaking second. It's the same reason why your hard drive is slow compared to your SSD, why satellite internet just sucks compared to broadband or even ISDN, why people buy sports cars (less latency) instead of school buses (more bandwidth) to get from A to B faster.

Must read: http://www.stuartcheshire.org/rants/Latency.html


RE: Makes sense, though...
By droplets on 5/27/2010 7:20:26 PM , Rating: 2
quote:
The thing I'm most curious about is the latency


With my Pre tethered to my computer, bridged to my PS3, I can play MW2 online. With 130-200 latency. I get about 1 kill a round. If I get a text, I better pray I'm in a corner surround by my own claymores. If my phone rings, it's game over.

FYI.


RE: Makes sense, though...
By jinx101 on 5/27/10, Rating: -1
RE: Makes sense, though...
By mcnabney on 5/27/2010 3:47:55 PM , Rating: 2
You ignorance is amazing.

Wireless companies have to lease their spectrum.

Verizon spent over $20 BILLION DOLLARS on the last auction alone. And you wonder why they charge for their services.


lol?
By Azure Sky on 5/27/2010 2:44:23 PM , Rating: 2
Screw Verizon, honestly, and screw limmited data plans and price teirs. not just for wireless but for all internet...part of why i couldnt live in AUS, I would constantly be needing to buy more bandwidth...




RE: lol?
By mcnabney on 5/27/2010 4:21:57 PM , Rating: 2
Internet access is just like any other utility. They distribute a scarce resource.

Pretty sure you can't get an 'unlimited' monthly fee for water, electricity, or natural gas. They have been able to offer unlimited before because they had the capacity and few users took advantage of it. Now with Youtube, Hulu, and Netflix a large number of users can really rack up the bandwidth and potentially slow the entire network down.


RE: lol?
By Flahrydog on 5/27/2010 4:51:06 PM , Rating: 2
Your argument would be true if an internet connection was actually like a utility. Then you would only pay for what you use and not even sign up for a "plan." You get a set price per MB and that's it.

But that is not the case, and if you sign up for 2GB and only use 1GB, oh well you just wasted some money. And worse, if you use 3GB you get charged crazy overages. Your price doesn't rise if you use "too much" water, electricity, or natural gas.


RE: lol?
By Nutzo on 5/27/2010 5:23:57 PM , Rating: 2
Your price doesn't rise if you use "too much" water, electricity, or natural gas.

Actually, in Southern California, we have a tiered pricing. The more you use, the higher the price. Electricity prices start at .12 and climb to .38 per KWatt for anyone using an airconditioner during the summer. Use 2x as much power, and your bill ends up 3x-4x higher.


RE: lol?
By mcnabney on 5/27/2010 11:13:48 PM , Rating: 2
Where I live you pay a 'connect fee' plus usage for water, gas, and electricity. So if you don't use ANYTHING you still pay a fair amount to have service. It will be something similar for megabytes. The first increment costs a lot, and additional quantities are cheaper. They do this to avoid using the words 'connect fee'.


RE: lol?
By Nutzo on 5/27/2010 5:28:22 PM , Rating: 2
Your price doesn't rise if you use "too much" water, electricity, or natural gas.

Actually, in Southern California, we have a tiered pricing. The more you use, the higher the price. Electricity prices start at .12 and climb to .38 per KWatt for anyone using an airconditioner during the summer.


RE: lol?
By mcnabney on 5/28/2010 10:47:51 AM , Rating: 3
<looks at electric bill>
Yeah, 8.125 cents per KWh here. I guess that is another reason not to move to Cali.

I also enjoy my 2800 square foot home that backs-up to parkland which only cost me $174k seven years ago. Flyover-country is awesome!


RE: lol?
By StevoLincolnite on 5/27/2010 7:05:39 PM , Rating: 2
quote:
Your argument would be true if an internet connection was actually like a utility. Then you would only pay for what you use and not even sign up for a "plan." You get a set price per MB and that's it.


There are providers now in Australia that are providing "Pay as you go" plans for the up-coming National broadband network, pay $1 and get 1gb of data, or $100 for $100gb and so on. - So you could end up paying $1 a month for your internet connection, or $100. - Good idea for light users, as it becomes a very cheap always-on connection.

However, they still do have plans suited to larger download users, with zero extra costs involved, where you get speed reduced to 64kbps/128kbps/256kbps/512kbps+ once you reach your monthly download limit (Speed caps depend on the ISP you are with, what DSLAM you are on, and of course what plan).

It's interesting where the US Internet connections are heading, they are heading towards a limited download system, while we are shifting towards unlimited. (Perhaps you guys lack decent competition?)


RE: lol?
By Wolfpup on 5/30/2010 3:44:36 AM , Rating: 2
Yeah, there's little competition and little regulation here. I don't know if it's any better there since I know nothing about it, but here most people have either zero, one, or two real broadband options (DSL and/or cable...or nothing).

Some company's DSL offerings are actually (to me) very reasonably priced, and essentially unlimited. Cable from Comcast though is $60/month, which to me is way too high-although I guess still reasonable compared to what cell phone companies charge for pathetic 5GB plans!

Regarding coverage-everywhere I've been, Sprint's at least as good as Verizon, and neither is as good as U.S. Cellular. AT&T is laughably bad, and pretty much everything but USCC goes down the drain if you leave the more populated areas. I'm not sure how T-Mobile is one way or the other here, as USCC and Sprint were the big too, followed by Verizon now, and to a lesser extent AT&T just because of the iPhone mostly.


lower cost structure
By fic2 on 5/27/2010 2:54:11 PM , Rating: 5
Yet another industry that is able to lower their cost structure through new tech, but wants to raise pricing at the same time for people that use it. Pretty much like the banks did with ATMs.




RE: lower cost structure
By mcnabney on 5/27/2010 4:12:56 PM , Rating: 3
I actually think this is the industry acknowledging that in a short while there will be only data. No minutes. No texts. Just megabytes.

I expect that they will bucket them something like this:
up to 250MB/mo $39.99
250-1GB/mo $59.99
1-5GB/mo $79.99
5-10GB/mo $99.99
10-15GB/mo $119.99


RE: lower cost structure
By keith524 on 5/27/2010 4:30:46 PM , Rating: 3
I doubt they would set the usage amounts that low. What most people here seem to be forgetting is that the current "unlimited" plans are not unlimited. The current $30 unlimited plan is really 5GB of unlimited data :P.

My guess would be they will keep the base cost at $30 and lower the data to 2GB. Then offer larger options from there. At the same time they will start allowing more phones to tether and work as wi-fi hotspots to encourage people to use more than 2GB and increase their allowance.


RE: lower cost structure
By mcnabney on 5/27/2010 11:20:05 PM , Rating: 2
Remember, that $30 is on top of some type of voice plan, so profit centers are going to be shifted around.

And the wireless company don't really want to cater to the minimum usage. Prepaid will remain for the true casual user.

And just to contrast, VoIP is typically 64kb/64kb per second. Or 8KB+8KB/sec or about one MB combined per minute. So a GB will be 1000 minutes. So my prior guess isn't too far off. I am also wondering how MTM will work when it is MBs only. A lot of those family shares burn a ton of minutes. Now imagine that you are paying for all of the MBs on both sides of the conversation. I would be surprised if buckets don't go all the way up to 50 for a family share.


Same ol' story
By dj LiTh on 5/27/2010 1:59:18 PM , Rating: 5
All your bandwidth are belong to us!




RE: Same ol' story
By amanojaku on 5/27/2010 3:10:08 PM , Rating: 4
You download it! Your payment is not enough, see you next time, bye-bye!


I think what he means is..
By DanNeely on 5/28/2010 10:34:31 AM , Rating: 2

quote:
What is even more interesting is that Lowell stated, “I expect people will have four or five or perhaps even more devices they will connect to the network” -- but he went on to say that these same customers would prefer to buy "buckets" of data by the MB for this usage scenario. For most people connecting four or more devices, conventional wisdom would say that they would want an unlimited plan to avoid overage charges; but perhaps Lowell knows something about Verizon customers that we don't.


Under the current pricing strategy each of your unlimited devices would cost the same amount. 4x$30/50mo is a really large bill. If the pricing is right a per GB shared plan would make it much cheaper to add devices that you only use infrequently or primarily via wifi to your plan.




RE: I think what he means is..
By mcnabney on 5/28/2010 10:50:02 AM , Rating: 2
It would also be fairly egalitarian. Use it how you want, just pay for the 1s and 0s that you do use.

/I envision addblocking software in my future


RE: I think what he means is..
By DanNeely on 5/28/2010 12:00:52 PM , Rating: 2
That's something I've wanted for a while. Current options for non-contract data plans data plans are painfully expensive for what you get. I'd like a USB modem as a backup internet connection option at home and as an alternative to the extortionate prices some hotels charge for wifi. Unfortunately current prices for data are prohibitively high without a contract and I don't have problems often enough to justify $30+ a month.


Isn't that..
By ARoyalF on 5/27/2010 6:50:26 PM , Rating: 5
So xfiles smoking man works for Verizon now?

Sorry.....couldn't help myself.




Always to their advantage
By 3minence on 5/27/2010 3:26:42 PM , Rating: 2
I have no problem with a tiered bandwidth plan, but it seems these plans always only work out to the Telco's benefit. They will probably really screw the heavy users with a large price for heavy usage, but will not offer a Tier with excellent price for us minimal bandwidth users.

I really don't use the internet on my cell phone except to look up an address/phone number or check google maps for traffic info. But do they offer a $10 a month minimal usage plan? Nope.




RE: Always to their advantage
By mofo3k on 5/27/2010 4:06:38 PM , Rating: 2
If you have a "Multimedia" phone and not a smart phone then Verizon offers a $9.99/mo 25mb data plan


Grammar Nazi Question
By mjrpes3 on 5/27/2010 6:34:59 PM , Rating: 3
"and surf away with little disregard for data overage charges."

shouldn't it be "...with little regard for..."




LOL - Freudian Slip?
By Smartless on 5/27/2010 2:14:27 PM , Rating: 2
quote:
Verizon wants to put in place a tired pricing strategy f


Yeah I agree, its pretty tired.




Typical
By XSpeedracerX on 5/27/2010 7:27:07 PM , Rating: 2
Sounds like classic Verizon to me. Hope there LTE network lives up to the hype unlike the 3G CDMA network they've got now. Don't know about everyone else, but my experience with their networks have been not-so-good, with call quality below that of a low-rez youtube video and numerous dropped calls when they were made from 10:00 to 1:00 pm, nevermind the dropped texts. Totally not worth the $86/mo I was giving them.

I had to make the call to drop the contract from my new phone because the old one dropped it three times.




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