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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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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.


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