Verizon prepares fees for mobile users who download too much information

By Stephen C. Webster
Tuesday, July 5, 2011 12:57 EDT
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Verizon Wireless on Tuesday became the latest U.S. mobile data carrier to announce that it would implement usage-based pricing for Internet access, claiming the new fees would mean light users no longer “subsidize” those who rely on the company’s current unlimited data plans.

Though the company currently offers a $30-per-month “unlimited” data plan for smartphone owners, a spokesperson said that would not be available for new customers after July 7.

In its place, the company will offer data packages ranging from $10 for 75 megabytes, up to $80 for 10 gigabytes, with overage fees at $10 for every additional gigabyte downloaded.

Customers with the $30-a-month unlimited data plans who upgrade their phones after July 7 will be allowed to keep their plan, Verizon said.

AT&T, Verizon’s largest competitor, offers a similar pricing structure for mobile data, but its caps also extend to home-based DSL connections. T-Mobile as well has switched to tiered pricing for mobile data, but it simply slows Internet connections after a certain amount of data is consumed, as opposed to charging fees.

Sprint, the third largest carrier in the U.S., remains the last mobile provider to still offer unlimited Internet access at a flat monthly rate.

Fifty-six percent of U.S. broadband users last May paid for connections that were bandwidth-limited — a growing trend that has some industry groups worried about a collusive effort to commoditize bandwidth and force Internet companies like Netflix or Valve to pay and charge significantly more to deliver their services.

In spite of these and other concerns, the Federal Communications Commission (FCC) passed “net neutrality” rules last year that explicitly authorize bandwidth capping and Internet “fast lanes” for certain types of traffic.

The rules also mandated that all traffic be treated equally on wired networks only, after a successful lobbying campaign by wireless data companies.

Stephen C. Webster
Stephen C. Webster
Stephen C. Webster is the senior editor of Raw Story, and is based out of Austin, Texas. He previously worked as the associate editor of The Lone Star Iconoclast in Crawford, Texas, where he covered state politics and the peace movement’s resurgence at the start of the Iraq war. Webster has also contributed to publications such as True/Slant, Austin Monthly, The Dallas Business Journal, The Dallas Morning News, Fort Worth Weekly, The News Connection and others. Follow him on Twitter at @StephenCWebster.
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