They'll also likely lie and tell you it's for your own good...
This week saw some people opining that with AT&T's new, expensive wireless data plans in play
, Verizon could better compete if they retained unlimited wireless data tiers. As we noted the other day, that's simply not happening
. Verizon, just like AT&T, is a huge fan of nickel and diming customers
at absolutely every conceivable opportunity. Like AT&T, Verizon wants to counter the SMS and voice revenues they'll ultimately lose to mobile VoIP and smartphone IM services -- and retain control in the face of the smartphone (r)evolution -- by constricting the pipe and jacking up the price of wireless data.
AT&T and Verizon both have the luxury of being so incredibly large and politically powerful, they don't really have to care if their subscribers don't like it. Both companies soften the blow by designing tiers that provide the illusion of value -- but upon closer inspection are always designed to nudge most consumers toward increasingly-expensive monthly bills. Verizon's current wireless data pricing is already fairly awful
, and gets worse once you factor in overages, fees, penalties, ETFs, and a universe of other surcharges.
For literally about the hundredth time this year -- Verizon this week hinted that wireless data pricing will soon be getting worse
. Speaking to Business Week
, Verizon CFO John Killian hinted that they'll be following in AT&T's footsteps and eliminating wireless data plans this year. The article, which fails to actually ask Verizon any questions, features almost on cue support for the idea from industry quote machine and Sanford Bernstein analyst Craig Moffett -- who has been pushing carriers to kill unlimited
for the sake of investors. Unlimited tiers will likely die when Verizon introduces LTE to market:
"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.
Business Week doesn't bother to pressure Killian on this claim that congestion (not greed) is the driving force for the desire to eliminate unlimited, despite the significant capacity boost Verizon will see from implementing LTE. Again, the desire to impose low caps and overages is about money
-- not about altruism, congestion, saving endangered species, or whatever justification AT&T and Verizon use this week. While some type of wireless caps may be necessary, there's a lot more leg room as we push toward 4G services. Here's industry analyst Dave Burstein from a recent piece on AT&T (and now Verizon's) move
Two of the best engineers in the U.S. tell me wireless congestion can be almost eliminated except at Katrina type emergencies with 5 and 10 gigabyte caps. Models from Adtran suggest 20-30 gig caps (or higher) are practical in the LTE generation. There's nothing wrong with caps if they are economically sensible. The problem is that AT&T placed the cap much too low.
You'll note that ISPs never provide hard data supporting their claim that a bandwidth apocalypse is inevitable if they can't introduce ultra-low caps and ultra-high overages (be they on terrestrial or wireless networks), and that's because that data doesn't exist. Of course with AT&T and Verizon making a bold new cash grab, this opens the door further for Sprint, T-Mobile and a growing number of prepaid operators to compete by introducing wireless data pricing models that don't require second mortgages.