I am once again very pleased to have the opportunity to speak at Network World’sIT Roadmap events this, eight of which will be held around the country during 2008. We just completed our first, in Denver, this week, and if we’re coming to your town, and you’re an IT pro, I really recommend this event to you. It’s a once-day traveling trade show with multiple tracks, exhibits, keynotes, everything – and the NWW events staff does a great job making sure it all runs smoothly.
I Chair the wireless track (what else?), and in Denver one of our speakers was from Verizon Wireless. I’m always happy to have the carriers represented, and we got a look at Verizon’s plans for LTE. But of particular interest was some discussion with the audience on the subject of pricing plans, particularly for data. As I’ve written before, we now have unlimited voice plans, and, gee, I always thought we already had unlimited data plans, or at least I do with my current contract with VZW. Like most people, I don’t read most consumer contracts I sign, figuring they are standard in nature, tested in the courts, and at any rate, unchangeable by me. Don’t like the terms? No cellular for you.
So I’m pretty sure my data agreement explicitly mentions unlimited, but I’m also pretty sure there are certain activities that are expressly prohibited, effectively placing limits on what I can do (i.e., no net neutrality here). And, if you’re a new customer or signing up for a new plan, there are definitely restrictions now (see Verizon’s “Calling Plan Information“). For $60/month, you’ll get 5 GB of downloads (ideally, measured at Layer-7, but who knows?). Exceed that, and you’ll pay in one of two ways. If you exceed plan limits, each additional MB will be charged. If your plan has no limits (again, I think that’s me), exceed 5 GB in a month and your traffic will be throttled back (“shaped” is clearly not the intention here) to 200 Kbps for the next month, said throughput not being guaranteed any more than that within the 5 GB limit.
As much as I find the guess-what-you’ll-use-every-month-for-a-whole-year-and-then-pay-in-advance on voice plans to be patently unfair, again, deal with it or no cellular for you. And ditto for data plans – given the nature of the Web, it’s impossible to know how much data you’ll use every month, so an unlimited plan is the only realistic option unless you don’t mid being hit with a big bill that could be much more than the $20 monthly difference between the 50 MB plan and the 5 GB plan. But unless you have more than 1,000 users, you have to pay the $60/month/person, and perhaps more if you want, for example, to use dial-up networking. And, again, throughput is not guaranteed, nor is, of course, availability. Pay, and maybe they’ll do something for you. Maybe not.
You would think that the carriers would be rolling in dough here and using all of that cash to build out more capacity, but you’d be only partially right. Broadband data is very expensive to provision, and consumes a lot of very expensive spectrum (the 700 MHz. auctions are now at around $20B, the high end of my forecast). The carriers need to use price – and limits on data traffic – in order to manage the capacity they have. And, since adding new spectrum is so expensive thanks to the auction process that basically transfers even more of your money to the government, there’s little hope of data prices coming down any time soon or of the carriers offering truly unlimited service. Granted, a 5 GB limit should only affect those using the network for SlingPlayer Mobile type of activities, but you never know. Still 5 GB is a lot; just check your usage every now and then.
My hope is that competition will begin to help some here; that’s in fact the only real hope. But have you noticed that all of the major cellular carriers now offer unlimited service at exactly the same price? And it seems that none of them want, at present, anyway, to start the price war that is likely inevitable. Data, it seems, will follow pretty much the same path – expensive service, no guarantees, and now absolutely limits on monthly data volume.
