Verizon the most recent carrier to tighten the data spigot
Verizon the latest carrier to tighten the information spigot
The days when cellphone users could get all of the World wide web, video, and downloads they want for a flat monthly fee are fading, as Verizon Wireless becomes the most recent cellphone carrier to perform away with limitless information plans.
Beginning tomorrow, Verizon Wireless, the nation’s second-largest wireless carrier, will cap the amount of information downloads permitted beneath its $30-a-month wireless broadband program; it’s going to also unveil far more pricey options for users with big appetites for digital data.
The adjustments will impact only new prospects. Shoppers who now have limitless information plans, or who sign with Verizon these days, will probably be capable to carry on paying a flat charge for every one of the information they want to download.
Verizon follows the country’s quantity a single carrier, AT&T Inc., which did away with unlimited data plans last year. The smallest of the nation’s top four cellular companies, T-Mobile USA, still offers an limitless service, but the company dramatically slows down information transfers for heavy users - in effect, imposing a speed limit instead of a usage quota. Of the top wireless companies, only Sprint Nextel Corp. still offers unlimited information plans.
The trend follows an explosion in the quantity of digital information sent and received as much more people buy devices like Apple Inc.’s iPhone and smartphones running Google Inc.’s Android operating system. With limited network capacity, cellphone carriers can discourage heavy usage by placing caps on data transfers and charging more. “What we’re trying to complete is streamline our information strategy,’’ said a Verizon Wireless spokesman, Howard Waterman.
Limited plans “will certainly have an effect on consumer behavior,’’ said Craig Moffett, a cellular industry analyst for Sanford C. Bernstein Co. in New York. “If it’s going to cost a lot more for the consumer to watch a video, they’re going to think twice before they click on that link of the squirrel on water skis.’’
Verizon Wireless subscribers now pay $29.99 a month for as much data as they want. That means limitless access to e-mails, Web pages, and entertainment services that stream music, video clips, or movies.
After tomorrow, Verizon Wireless will allow new clients to send and receive a limit of 2 gigabytes of information per month for $30 - enough, said Waterman, to send 1,000 e-mails, view 100 Web pages, listen to a lot more than 20 hours of streaming music, upload more than 20 photographs, and view over two hours of high-definition video.
Verizon will offer higher-priced plans for consumers who use additional information. Consumers will be in a position to buy 5 gigabytes of information per month for $50, or 10 gigabytes for $80. Users who exceed their quotas will be billed $10 per extra gigabyte.
Edgar Dworsky, a former Massachusetts assistant attorney general who now runs the consumer education website consumerworld.org, noted that Verizon’s new plan lacks a low-priced option for consumers who use very little wireless data. AT&T, for instance, charges $15 a month for 200 megabytes of information, but at Verizon, the lowest-priced program will be $30 a month, the price it now charges for unlimited data.
“What used to be the cap has become the floor,’’ said Dworsky. “They probably see it as a good moneymaking opportunity.’’
Waterman said that 95 percent of Verizon Wireless consumers use less than the 2 gigabytes per month limit. However, Parul Desai, telecommunication policy counsel for Consumers Union, the nonprofit group that publishes Consumer Reports magazine, said even users who do not exceed the cap might cut back on usage anyway, to avoid accidentally going over the limit. “Maybe you won’t use Netflix,’’ Desai said, “or maybe you won’t try some new application.’’
Verizon Wireless plans to reassure worried clients by notifying them about how much they have used of their month-to-month data quota. A new service will send a free text message to smartphone users when they have used half their quota, with additional messages when the level reaches 75, 90, or 100 percent. Verizon Wireless will also warn users who have already crossed the line, texting them when usage hits 110 percent.
Meanwhile, Sprint said it sees no need to change its unlimited cellular information plan. The carrier offers 450 minutes of talk, limitless calls to other cellphones, and unlimited information on Sprint’s 3G or 4G networks for $79.99 a month.
Even as they build faster networks, cellular companies will discourage consumers from downloading additional information because the companies have only so much bandwidth to carry the traffic, said Neil Strother, mobile services analyst at ABI Research Inc. in Oyster Bay, N.Y. “Wireless networks do have potential capacity constraints,’’ he said.
Landline cable or telephone companies can increase capacity by adding extra cables, he added, but wireless companies must move voice and information over a limited spectrum of radio frequencies.
Amy Storey, a spokeswoman for CTIA, the cellular industry’s chief trade association, said the move toward wireless data caps underscores the need for federal regulators to provide additional radio frequencies for use by cellphone companies. “Right now, the quantity of spectrum we have available is not enough to meet consumer demand,’’ she said.
There is considerable evidence of a radio spectrum shortage. AT&T has said that its $39 billion bid to acquire rival T-Mobile USA is chiefly an effort to get access to T-Mobile’s radio frequencies. The deal would allow AT&T to quickly upgrade its cellular services.
Meanwhile, the cellular industry and the Federal Communications Commission are pressuring television broadcasters to sell some of the unused frequencies they currently control to wireless phone carriers.
