If usage-based wireless data pricing is such a good idea, why won’t the carriers show us how it might actually work?
Verizon‘s CTO is the latest to try softening up customers to the idea of usage-based pricing for wireless data, while at the same time claiming the company has no plans to actually change things.
Dick Lynch, the Verizon CTO, is quoted in a Wall Street Journal story today talking about how a few “bandwidth hogs” use lots of data that the rest of us normal business users end up subsidizing.
Lynch went so far as to suggest that most users might actually pay less for data service if the big users paid their fair share.
“We will end up billing differently in the future,” Lynch told the Journal. But, like he said, there are no plans to do so at present.
If this sounds like the trouble the head of AT&T’s wireless business, Ralph de la Vega, got himself into last month, it’s pretty close.
“We are going to make sure incentives are in place to reduce or modify [data] uses so they don’t crowd out others in the same cell sites,” de la Vega told financial analysts, adding, “We have to get to those [high usage] customers and get them to recognize they have to change their patterns, or there are things we will do to change those patterns.”
Data pricing is almost certain to change. AT&T has said that just 3 percent of its customers are responsible for 40 percent of data usage. Those big users currently pay the same flat rate AT&T’s other customers pay.
It would be helpful if carriers would release more information about how much data typical users consume each month. For example, how much data does a member of AT&T’s top 3 percent actually use? And what does an average business customer use?
The current “all-you-can-eat” pricing of cellular data encourages the bandwidth hogs and I think we all can appreciate the need for some kind of change.
At the same time, the thought of usage-based pricing makes customers crazy, afraid that their already high wireless bills will increase even more.
Verizon and AT&T need to start being honest and tell us specifically what they are considering and how it would impact customers. A plan that increased costs for the top 10 percent of users but decreased them for everyone else would probably be popular.
Carriers should also project this pricing into the future. As more wireless apps come online, cloud computing matures, and tethering becomes more common, how long will it before the majority of us approach the usage levels of today’s bandwidth hogs? What we will pay then?
The FCC needs to get involved in this, perhaps along with the FTC. The carriers deserve a fair profit on wireless data and we all benefit from the building of robust networks. But, we also need affordable wireless and clear protection for customers.
Regulation–self or imposed–could make usage caps reasonable, pricing fair, and prevent surprises from overage charges when users exceed their future measured data plans.
Wireless carriers need to start treating customers like adults. Customers, in turn, should accept that data pricing changes are almost certain to happen, like them or not.
David Coursey has been writing about technology products and companies for more than 25 years. He tweets as
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