Verizon’s Usage-based Data Plans: Bad for Consumers

Background

By now, you’ve most likely heard about Verizon Wireless following in the steps of AT&T’s usage-based (or ‘tiered’ as they are known to many) data plans. If you haven’t or aren’t exactly sure what that means, it’s a pretty simple concept. Essentially, Verizon previously offered a plan that was more or less unlimited. As long as you weren’t abusing the network, you could use as much data as you wanted per-month.

This plan was $30 across the board, although many subscribers were eligible for substantial discounts through their employers. For instance, my data plan through Verizon costs less than $25 a month. Honestly, that’s quite a bit of money for a wireless Internet connection accessible only via a smartphone–especially when my landline ISP doesn’t charge much more than that for a lot more use.

Those types of wireless charges are to be expected though. You’re paying for the use of the Internet almost anywhere over a relatively limited amount of bandwidth.

What’s Coming

Today, all of that is changing. Verizon is doing several things that won’t immediately affect current subscribers, but that may affect subscription renewals down the road and will definitely impact all new smartphone purchasers who aren’t already attached to a smartphone data plan. No matter how I look at these items, I can’t figure out even one single way that consumers will be impacted positively. Don’t believe what Verizon tells you. This isn’t at all good!

First, while the lowest priced data package will continue to start at $30, it will be capped at 2GB and any usage over this will be an additional $10 per 1GB. So, no matter who you are, you’ll have to worry a bit about going over your data limits each month similar to the buckets of minutes you purchase (i.e. 700, 1000, etc). Even though this seems like a good amount of data, don’t forget that your phone always uses some amount of data, even when it’s put away with the screen off. Unless you turn off 3G/4G, completely, it’s impossible to stop the flow of data. If you think you’ll use more than 2GB, plans are available for 5GB at $50 and 10GB at $80.

Second, corporate discounts are only available for customers purchasing at least the 5GB level of service. So if all you need is 2GB per month, don’t expect to get a percentage or dollar discount on your data. It won’t apply. Makes a lot of sense, right?

Third, if you want to tether a device to your phone (like a laptop, tablet, iPod Touch, etc), you must purchase the tethering option for an additional $20 per month. Granted, this gives you an additional 2GB to use, but it doesn’t seem really fair when you consider the fact that they’re placing unreasonable restrictions on what you’re allowed to do with a data package you paid through the nose for already. Even if you are currently grandfathered in to an unlimited plan, it’ll cost you an extra $30 per month to add tethering. So that’s $60 a month for data right there. Ouch.

Finally, while Verizon is currently allowing existing data plan subscribers to maintain their unlimited status, they’ll most likely force everyone to convert to a usage-based plan in the future. This is pure speculation at this point, but given their current direction, it seems probable.

Bottom-line

By now you’re probably thinking: “wow, this guy just hates usage-based data plans!” That’s not true at all. In fact, I’ll even support usage-based plans as long as the pricing is fair! The new policy is anything but. Many of you probably remember when Big Red introduced a $15 smartphone data plan last year that provided a 150MB allowance. They discontinued it shortly thereafter because few people bothered to get it. It was such a horrible value that most users just figured paying $30 for unlimited data was a much better deal. A few emails, picture messages, and web pages would blast through 150MB in a matter of days, if not hours. Verizon would have you believe that they learned from that mistake and are correcting things now. Well, I have news for you: they’re not.

I challenge Verizon and anyone else who supports this move to name one consumer-focused reason that this is, in fact, a good move. Just one!

For the rational, logical people out there, I think you’ll agree that this is an awful move for a company that’s been touting its super-fast, super-reliable 4G network since the end of 2010. A network that will allow users to blow through 2GB of data in an incredibly brief period of time. You’ll rack up overage after overage in no time flat. It’s crazy.

Take Action

So…what can you do to bring about change? Here are a few ideas:

  1. Sign the official petition asking Verizon to reconsider their decision and either bring back unlimited data or scrap the usage-based pricing scheme and start over.
  2. Don’t add any additional smartphones to any existing or new plans. If Verizon ever forces you out of unlimited data, drop the data plan altogether.
  3. Encourage your family and friends to do the same as #1 and #2.
  4. Terminate your contract and head to Sprint, which still offers unlimited data (at least for now)
  5. File a complaint with the FTC

Obviously, none of the above will work if just a few people do it. We need everyone to take part in pushing Verizon to reverse their new policies. So, what are you waiting for?

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  • Jeremy Christian

    After hearing this I decided that I will not be getting a smartphone and the mandatory data plan, even though I’ve been eligible for a “free” upgrade for 3 years now. My Chocolate 3 will need to last me a bit longer so I instead bought a new battery for it.

  • Anonymous

    I just saw a post today over on Droid Life noting that you can still get unlimited data for $30/mo with Verizon’s prepaid plans. Not exactly sure how all that works…¬†http://www.droid-life.com/2011/07/13/verizon-prepaid-data-plan-remains-unlimited-for-30/

  • Mr Bholmes

    man verizon plans are horrible period……to expensive