Verizon's LTE Pricing To Launch Dumb Pipe Era - InformationWeek
10:24 AM
Eric Zeman
Eric Zeman
Ransomware: Latest Developments & How to Defend Against Them
Nov 01, 2017
Ransomware is one of the fastest growing types of malware, and new breeds that escalate quickly ar ...Read More>>

Verizon's LTE Pricing To Launch Dumb Pipe Era

By considering network speeds as well as data transfer amounts in wireless plan pricing, Verizon Wireless has finally admitted that its network is a dump pipe.

Five years ago, before the network operators' walled gardens came tumbling down, one of their primary fears was that their expensive networks would eventually become dumb pipes. Those gardens collapsed to a degree, but still the operators fought the dump pipe label with value-added services accompanying basic access.

With Long Term Evolution, WiMax and HSPA+ networks on tap to deliver wireless broadband speeds beyond 10Mbps, the network operators are toying with new ideas through which to monetize those networks. Verizon Wireless' latest scheme takes a turn to the dark side, if you ask me, and clearly demonstrates that LTE and other "4G" networks are in fact the dumb pipes the operators feared.

According to a report in the Wall Street Journal, Verizon is weighing how to price LTE services. One idea is to meter service based on data usage. For example, customers who want access to 1GB of data transfer per month would pay less than those looking for access to 5GB of data transfer. That idea has been on the table for a while and in fact AT&T and Verizon Wireless are already using this model for access to their respective 3G networks.

Verizon's CFO Fran Shammo told the Wall Street Journal that it is now also weighing different price points for different data speeds. Want a faster connection? You'll have to pay more.

"If you want to pay for less speed, you'll pay for less speed and consume more, or you can pay for high speed and consume less," said Shammo. Shammo didn't indicate if customers could have access to high speeds and large amounts of data transfer. (Probably not.) Shammo also didn't give any indication how the pricing for these different packages would map out. Will it be $25/month for 5Mbps and $50 for 10Mbps? The pricing could land anywhere.

The killer comment made by Shammo, however, is that because Verizon's LTE network can deliver speeds between 1Mbps and 12Mbps, Verizon has plenty of room to offer tiered pricing for speeds -- "similar to home wired Internet service."

At home, I use Verizon Communication's FiOS TV, phone and internet services. Verizon offers different broadband speed packages. I pay for a 50Mbps download / 25Mbps upload package. There are other options available.

Make no mistake. Pricing services this way is a frank admission that the network is nothing more than a tunnel through which customers bore for access to the content they want.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll