Optical/IP Networks

Verizon: Turn Tiers to Smiles

8:00 AM -- Today is the funeral for Verizon Wireless 's unlimited data plans, and the beginning of a new era of data monitoring and usage caps for its customers. (See Verizon Confirms the End of Unlimited and Verizon Sheds a Tier for Unlimited Data.) And, let's be honest, many of them are going to go over their caps faster than you can say gigabyte, especially on Long Term Evolution (LTE). This is essentially what Verizon wants so that it can encourage upgrades and eke more revenue out of its subscribers each month, but I doubt they'll stand for it for long.

Right now, Verizon has only outlined the pricing for its three new plans and noted that $10 will be charged per gigabyte of excess, but there has to be more the carrier can do to make its customers happy.

Outside of just adding more -- and cheaper -- choices, Verizon and other carriers moving to usage-based pricing could personalize the service plans to make them more worthwhile for certain customer segments. Promotions like offering a premium package for a music enthusiast that gives them 2GB of data per month but excuses Pandora from the tier. Or, a gold standard for a photography nut that increases the upload speeds for picture porting.

Other ideas include offering free nights and weekends, much like operators do on the voice side. Mike Manzo, CMO of Openet Telecom Ltd. , also suggests bundling in quality of service to a tier as an upgrade to guarantee it for video watching. Tiers could also be built around parental controls or utility functions for the enterprise.

The possibilities for sprucing up the tiers are legion, and they might help ease consumers into this new, buffet-less world.

I have no idea if Verizon will make any of these moves and the fear of net neutrality violations may stop them from even exploring them, but it just seems logical to me.

It is more logical, at least, than capping consumers' data, yet not letting them escape a two-year contract.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

cnwedit 12/5/2012 | 4:59:59 PM
re: Verizon: Turn Tiers to Smiles

Right now, this whole shift is striking fear into the hearts of current Verizon customers. It's a scary prospect to suddenly have to worry about how much data you are using, since few of us have any idea.

Do you know - is Verizon able to tell customers what their average data usage has been to this point? Otherwise, any choice of tiers is a shot in the dark for most people.

Also, do consumers get a warning when they are close to their data limits each month? Or do they wait in fear for the bill to arrive?

jdbower 12/5/2012 | 4:59:58 PM
re: Verizon: Turn Tiers to Smiles

For Android phones there is a VZW-provided widget that shows you your current data usage for the billing cycle as of the prior day.  Not realtime, but close enough for government work.  


Tiered billing is also a great way to encourage network offload, I'm at <400MB this month because I was on WiFi the bulk of the time.  I know many people who don't currently configure their devices to use WiFi at home because 3G/4G is free and fast enough.  


What I don't agree with is the tiered data tethering charge.  I fully understand charging more with an unlimited plan since PCs drive a lot more bandwidth but if I'm paying for a fixed amount of data it shouldn't matter where it originates from.  Hopefully in the next iteration this will go away (along with the futile battle against the illegal tethering apps) and they'll introduce a data family plan where I can pool bandwidth with others on my account.

[email protected] 12/5/2012 | 4:59:58 PM
re: Verizon: Turn Tiers to Smiles


You're spot on with your assessment. Subscribers will not be smiling when their next mobile data bill shows up.

But it's not so easy to implement creative charging plans beyond the tiered models that are replacing 'all-you-can-eat'. To offer free Pandora or Facebook within a paid package, the carrier needs to be able to differentiate between Facebook content and everything else. The problem is that on a Facebook page and other popular sites, content is linked from all over the Web - advertising, video, photos, feeds, etc. While Deep Packet Inspection (DPI) can find a URL, it doesn't investigate the actual content of a page.

[Shameless plug ahead]

To make it possible to extract these links and include them in charging packages, Mobixell has a zero rating function in its Seamless Access Mobile Internet Platform. It digs into the page content and associates linked content so that subscribers can freely use specific sites and services without worrying about going over their tier quotas when they watch a huge video (like the one of my daughter's dance recital that my wife linked to Facebook the other day).

As you said, don't know if Verizon will adopt any of these measures. But they shouldn't have to worry about Net Neutrality if they cooperate with content and service providers to make popular content and services available to everyone in a fair way.

sarahthomas1011 12/5/2012 | 4:59:57 PM
re: Verizon: Turn Tiers to Smiles

I agree with you about the family data plan. I think that's the next logical step. And, interest in Wi-Fi offload is certainly very high at operators, so I bet they'll begin promoting it a lot more to encourage its use.

Carol, the plans only apply to new customers, so they wouldn't have a history on Verizon. But I'd hope Verizon works with them to determine their usage habits. I don't see many current customers opting to switch to tiered pricing, but I suppose it could save some of the light users some money.

fgoldstein 12/5/2012 | 4:59:51 PM
re: Verizon: Turn Tiers to Smiles

It's not as if VZW really thinks it needs to make its subscribers happy.  If the market were fully comeptitive, sure.  But AT&T is buying T-M, and doing tiered data itself, so there's going to be a lot less competition.  MetroPCS is unmetered but has no tethering and a really lousy selection of phones, along with limited coverage. Sprint is weak.  I think VZW is noting that the market is tipping from competitive to oligopoly, and that gives them greater pricing power.  They no longer have to make cusotmers happy, just not so unhappy that the remaining competitor (ATT) looks better.  And that's pretty hard...

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