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What you need to know for 01/18/2018

Down to Business: Verizon and its coming tiered fees

Down to Business: Verizon and its coming tiered fees

Verizon announced its intent to nudge unlimited-plan customers like me into a tiered-fee one.

I had to be dragged kicking and screaming into the smartphone era — not literally, of course, but through multiple entreaties from family members who told me I’d be sorry if I didn’t make the move.

So last summer I switched from a cellphone that already was pretty smart (camera, video recorder, text messaging) to one that also gave me Web access and email capabilities. And key to my decision was the unlimited data plan that my carrier, Verizon Wireless, offered — and soon would not. I bought an iPhone the day before the unlimited option ended. How could I not?

But imagine how I feel today, nearly a year later, after Verizon announced its intent to nudge unlimited-plan customers like me into a tiered-fee one. Irked? Angry? Peeved? Annoyed? Miffed?

Yes, all of those. And a bit betrayed, too.

Word of the pending change came at an industry conference last week that drew telecommunications heavyweights, including Verizon’s chief financial officer, Fran Shammo. He mentioned the idea of supplanting the unlimited plan in the context of the company’s build-out of its 4G LTE network — the latest generation of wireless technology that offers faster speeds for activities such as streaming video.

Shammo said he expected that by summer Verizon would unveil a shared-data plan under which a customer could have all of his mobile devices on one plan, rather than having to buy separate ones for his iPhone and his iPad, for instance. And families could benefit by having one plan for all of the devices that Mom, Dad, Sis and Junior used. Of course, there would be a company benefit to the shared plans, too: a tiered system of fees based on the amount of data used.

Right now, though, many of Verizon’s customers are on its 3G network — where I landed when I bought my smartphone last summer — and as Shammo told the industry conference, “a lot of our 3G base is unlimited.” But as the appetite grows for faster speeds and more mobile bells and whistles, customers will upgrade to 4G. “As they start to migrate into 4G, they will have to come off of unlimited and go into the data-share plan,” he said, according to a transcript of his remarks posted on Verizon’s website.

(Verizon later offered a clarification that no one would be forced to leave their unlimited plan, according to The New York Times. But if an unlimited customer later bought a new phone at a discounted price under a two-year contract, he would be shifted to a tiered plan, the statement said.)

Analysts have thought for some time that wider adoption of smartphones and tablets has been hampered by the one-device, one-plan formula. But at the same time, data has become an important component of sales for wireless companies. At Verizon, data revenue totaled $6.6 billion in the first quarter, the company reported last month, which comprised a big chunk of the $18.3 billion in overall sales recorded in the quarter.

How the shared-data plans will be structured remains to be seen. Will they be reminiscent of the “minutes” choices that plans had when cellphones were used primarily for making calls? I always hated trying to guess how many were enough for my family.

I can imagine a similarly dizzying experience in choosing a shared-data tier that will accommodate activities I don’t yet know I’ll undertake, on multiple devices I haven’t yet added to my mobile arsenal.

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