Verizon continues the “congestion” myth with unlimited data plans

August 1, 2014

verizon-android

Recently, the Federal Communications Commission chairman Tom Wheeler wrote a letter to Verizon in which he stated that he was “deeply troubled” by the fact that Verizon was planning to slow down speeds of customers who had unlimited data plans. Previously, Verizon only throttled 3G EVDO customers if that user was in the top 5% of the heaviest users and if a local tower was suffering from congestion.

Verizon responded to this letter by releasing a statement stating:

“As we’ve said, what we announced last week was a highly targeted and very limited network optimization effort, only targeting cell sites experiencing high demand. The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don’t limit capacity for others.” - VerizonWireless

Of course, customers can avoid the slowdowns if they subscribe to one of Verizon’s shared data plans. Verizon states that the top 5% of data users were using 4.7 GB or more of data each month.

screen-shot-2014-07-25-at-1-49-20-pm 9to5Google

It seems a little odd that Verizon would be having trouble with such a small number of customers considering they love to tout the reliability of their network and the spectrum space that they have for future LTE enhancements. That is, unless Verizon is looking to make a major deal where they proceed to warn the FCC that they could soon run out of spectrum unless the deal was allowed!

Verizon’s tactics here mirror some of their most recent ones towards customers on an unlimited data plan. Verizon recently dropped the $5 monthly fee for the NFL Mobile app. Those with unlimited data plans will not be included in this perk. Verizon has not given any reason for this move other than Verizon simply wanting people off unlimited data plans and onto the shared data plans with a good chance of netting Verizon some overage fees.

Last year, Verizon launched their Edge handset upgrade program which allowed users to upgrade to a new device once every six months, provided they have paid off 50% of their current phone under monthly installments. But those on unlimited data plans were offered an even better deal with a limited promotion data tier called Verizon Max. This plan offered Max 6 GB of data monthly for $30 with overages between $10-$15 per GB.

more everything plan HowardForums

In 2010, Verizon followed AT&T by eliminating unlimited data plans and imposing low data caps and overage pricing on all future wireless data plans. Of course, if you moved to one of these shared plans, you had additional fees tacked onto your bill for each device that you connected to the plan and a good chance of hitting your data cap with a family that enjoyed using a video application of any kind. Since Verizon was at one point charging customers $15 per GB over their caps, how could Verizon not strike it rich with this new billing system?

Is it any wonder that just two years ago, US residents were paying seven times more than those overseas? Verizon charged $7.50 per gigabyte of LTE, which was three times the European average of $2.50 and ten times the 63 cents per gigabyte charged in Sweden.

Much like AT&T, Verizon has a long history of anti-competitive behavior being that they are one of the two wireless carriers controlling the high majority of wireless customers in the country:

  • In 2011, Verizon refused to make Google Wallet available to their customers. Why? According to Verizon, Google Wallet wasn’t safe for Verizon customers to use. In reality, Verizon was simply stopping Google from challenging their soon-to-be-released mobile payment platform, Isis.
  • When the original Galaxy Nexus 5 smartphone was released, it wasn’t supported at all by Verizon. AT&T, T-Mobile and Sprint found a way but not Verizon. Verizon was at the time pushing their droid handsets.
  • When the Nexus 7 was released, it was all ready to go on Verizon’s LTE network. Yet, it was blocked from activation. Verizon blamed “systems issues” while their own seven-inch tablet was shockingly on sale.

As Karl Bode puts it over at DSLReports:

“The reason for this is not complicated: the majority of the U.S. wireless sector is controlled by two companies, who, thanks to feeble competition and duopoly power (spectrum hoarding, regulatory capture, special access market dominance), have collectively jacked up the price of data to protect themselves from the looming loss of SMS and voice revenues. That’s courtesy of AT&T and Verizon’s new shared data plans, which offer unlimited voice and SMS, but impose per device fees and data overage charges of $15 per gigabyte. The latest earnings reports show shared data has consumers paying more than ever for their data.” - DSLReports

The bottom line is that Verizon wants to find additional sources of revenue from the same network. If families switch to the shared data plans, it is likely that the families will have to pick higher data plans and therefore give Verizon even more money per month. Let’s not forget the overages either.

This week, the Government Accountability Office (GAO) released a preliminary report on Internet data caps based on findings from focus groups and interviews with experts. The study found that usage-based pricing has little to do with managing network congestion and more to do with plans to increase the cost of Internet access. Included in the study was AT&T being criticized for not providing access to an online data meter while socking users with overage charges.

Shocking

Comments

  • Evan Wickes

    original galaxy nexus, not nexus 5

    • tzulu72

      No he meant the Nexus S, the Galaxy Nexus was on Verizon

      • Evan Wickes

        ur right… the G-Nex was CDMA & Big Red had it.

        • smokebomb

          There was a GSM version but it was only 3G.

  • Amir Khan

    Switch to t mobile, I did. Get great service in the cities, not so great when driving in the boonies between towns, which wasn’t a major negative for me. So happy to have left Verizon and their games. My monthly bill is also lower and i don’t have a contract that locks me in anymore.

    • Michael Samsara

      Solution – to the boonies problem with T-mobile. Buy a cheap throw away phone from Verizon or whatever carrier happens to have coverage in the particular part of the back of beyond you are traversing and then have your calls forward to both it and your regular phone so you don’t miss anything important. I mean, let’s face it, we all could somehow manage to survive the day with a little less texting or surfing – if we really really tried. I avoid Verizon and all things Verizon for the same reason I avoid all things Apple – a business paradigm that is all about them and only pays lip service to the ideal of service.

  • Neo Morpheus

    So, lets see, if I use 100GB on my unlimited, i get throttled, but if I pay 750 bucks, plus tax, plus their bogus fees, the same 100GB of data will magically have no problems?

    Sadly, nothing will happen, they will bribe, err, make a nice campaign contribution and all this will be swept under the rug.

    • Nunyur_Biznezz

      Nope it doesn’t say i you use 100 GB you get throttled. Only if the tower you are using is congested and only while it’s congested. If you move to an uncontested tower or the tower becomes uncontested you are no longer throttled. Also why are you using 100 GB on a mobile connection especially with wi-fi available? Get REAL internet if you want to use that much.

      • Neo Morpheus

        That’s what they stated, but knowing vericrooks, they will claim that any tower that you are attached is overcrowded.
        Also, note that very conveniently, they only target the unlimited users, hence my comment, 100 GB is 100GB, no matter what.
        Example, right now, im way bellow 2 GB for this period, yet my phone has being useless the last couple of days, so yes, they are targeting indiscriminately towards unlimited users.

        I never used 100gb, just stating that option.
        Also, if I could or need to use 100 GB I would. Why? simple, in my damn receipt it says UNLIMITED DATA, so guess what, I will use it if I needed, that’s why I pay them.

        Then again, you could just be a troll or one of their employees that are astroturfing the net.

      • LA

        “Also why are you using 100 GB on a mobile connection especially with wi-fi available? Get REAL internet if you want to use that much.”
        What if I live in an area that has no high speed internet?
        Why should I be denied the use of something that I, as a citizen own, just because some company says that I’m using too much of it? Verizon (and other cellular companies) only have “rights to operate” in a specific spectrum. Those airwaves still belong to the public. Companies like Comcast, and Centurylink might own the wires, but in many instances those wires are laid under public streets, ie property that I, as a taxpayer help maintain. Those companies are making use of public property, and they want to tell ME how much of it I can use?? Wrong.
        ALSO : The cost for Verizon to deliver one gigabyte of data is continuing to fall. If they can just “charge overages”, where is the incentive to try and deliver even more efficient ways to use spectrum, and deliver more data, faster. There wont be any.

  • TEEJAYZ

    Anyone using that much data needs to get a freaking life.

    • Rickrau5

      Yet here you are commenting about it..

      • TEEJAYZ

        Yeah…I had a sandwich today too. What’s your point?
        Is it just that you’ve lost touch with the fact that some people use computers…typically at work?
        Something tells me you need to get outside brother. No phone though, ok?
        That’s good advice. Hope you take it.

        • Rickrau5

          Touchy Touchy! Obviously that hit a soft spot. Aww Im sorry.

          • TEEJAYZ

            Nah sweetheart. I just spent a couple of days alone in the mountains. No soft spot here.

            You’re irrelevant brother. Don’t give yourself that much credit.

          • Rickrau5

            Really? Mountains. Wow. Totally. Please, continue to explain your life to an irrelevant person over the web, since, I mean, you have a life and all.

    • smokebomb

      I average 12GB (in a light month) of data use on my phone. There are 2 reasons for that: I take an hour bus ride to work every day (it’s free for me) which includes streaming music and YouTube videos (I have unlimited data on T-Mobile) and my Comcast internet is the biggest fucking joke of an internet service I’ve ever encountered (and I had FiOS at one point) so I rely on my phone.

    • cynfulto

      What if your job requires you to use that much? Who are you to be judging when you don’t know someone else’s situation? There could be a lot of reasons someone needs large amounts of data but here you are voicing an uneducate, unasked for opinion on a public forum. How about you get a clue to go along with your pathetic life.
      Damn!! Some of you people are something aren’t you?

  • smokebomb

    The fastest I ever got on Verizon was September 2011: 40 Mbps. In November 2012, I was getting 10 Mbps. I have T-Mobile now. Their 4G is almost as old, and I’m getting 89 down, 19.5 up. There’s congestion on Verizon because they spend too much money on CEOs and lawsuits for their anti-competetive practices, and not enough on infrastructure.

  • Lisa

    Yeah my phone has been screwing up since it went up for renewal do they have the option to make your phones stop working so you will get a new phone and sign another contract with them?

  • Nunyur_Biznezz

    What the author of this article forgets is though there may be few people causing congestion some of these people use over 1 TB per month. Now anyone that says 1 TB is reasonable when even cable ISPs don’t allow that much is nuts.

  • BillyBoB

    I’m was grandfathered in on the unlimited data plan. I just started receiving texts saying I went over my plans data limit. Anyone else having these issues with this?