Every time a wireless or landline broadband carrier introduces a new promotion, there's usually a chorus of press outlets that declare that a "price war" has broken out. In reality, what's usually broken out is simply a marketing war, which may or may not include actual cost savings for the consumer. Many pricing plans are designed to provide the illusion of value but in reality nudge customers constantly toward higher bills. Tack on a bevy of below the line fees, fine print, restrictions, and surcharges -- and you'll often find the listed price isn't anywhere near the real price anyway.

Last week we saw Verizon introduce some new wireless pricing, and the press quickly bubbled with excitement over a new Verizon Wireless $69.99 a month unlimited talk plan. Not to be outdone, AT&T quickly offered a $69.99 plan of their own. The media then proceeded to squeak about how a price war had broken out. A few media outlets bothered to notice that Verizon's new pricing involved users probably paying a lot more for data, and even fewer remembered that Verizon just raised early termination fees for customers.

Fortunately, some in the press seem to be smartening up a little bit in terms of "price war fever." Olga Kharif at Business Week urges readers to "not be fooled" by the changes. Tony Bradley over at PC World likens Verizon's price drop to a "stage magician trick." Brad Tuttle over at Time correctly notes the changes are more "gentleman's agreement" than a war:

quote:

---

The WSJ calls what's happening now among the wireless providers a "pricing war," but it seems like more of a gentleman's agreement than a war. They are price matching, not one-upping each other. And while, yes, part of the intention is to attract customers like in any price war, the mission seems plainly aimed at getting more out of each customer over the long haul.

---

Marguerite Reardon at CNET also does a good job breaking down the changes with a useful FAQ, in the process exploring how Verizon's changes are more of a reshuffling than a price drop:

quote:

---

In short, where consumers can expect to save money is on voice calls. Whether they are using a smartphone, quick-messaging/multimedia device, or a basic feature phone, the companies have lowered the price of their unlimited voice plans. But where many customers will likely pay more is on accessing the mobile Internet.

---

Of course as we've discussed at length, as phones become computers and wireless networks evolve, revenues gleaned from voice minutes and SMS are threatened by VoIP over 3G and smartphone instant messaging. As such, the focus from here forward for companies like AT&T and Verizon will be about socking users with higher data rates and artificially constricting the broadband pipe with often absurd per megabyte overages -- in order to retain both revenues and market power.