Verizon Wireless said that starting Thursday it will end its unlimited data plans, responding to a deluge of smartphones and tablets sucking up bandwidth on its networks.
In place of all-you-can-eat Internet plans, Verizon Wireless said new customer will be offered monthly plans of $30 for 2 gigabytes of data, $50 for 5 gigabytes, and $80 for 10 gigabytes. Customer with feature phones with limited Internet capabilities can choose a $10 plan for 75 megabytes of data.
Existing customers won’t be affected by the change. The company didn’t respond to questions about how the new billing practices will affect renewing subscribers.
Verizon is the latest carrier to move to usage-based prices, or tiered billing. The new way of charging consumers is sure to confound customers and make them think twice the next time they watch a streaming video, send a big picture file by e-mail or play a game on their device.
Federal regulators and lawmakers have complained that consumers are easily caught off guard by higher-than-expected monthly overage charges.
Carriers say about one hour of streaming video a day will exceed a monthly 2 gigabytes cap.They also say users can check their data use on Web sites and through text message alerts. But they also protest a Federal Communications Commission proposal to end bill shock that would require companies to warn users when they get close to their data limits.
“It is a shame that Verizon and the other companies see the need to ration bits of data for their customers,” said Gigi Sohn, president of public interest group Public Knowledge. “At some point, consumers will realize these new technologies will be worth very little if they can’t or won’t afford to pay for them.”
Verizon, the nation’s biggest carrier, isn’t alone. AT&T was the first major carrier to change its billing practice and T-Mobile, which AT&T hopes to acquire, has followed suit. Sprint Nextel is the only national carrier that offers a basic $50 unlimited data plan. Sprint complains that AT&T’s bid for T-Mobile would make it harder to survive as a stand-alone firm, eliminating the last low-cost alternative to the biggest wireless firms, Verizon Wireless and AT&T.
Verizon spokeswoman Brenda Raney also said customers will have to pay for previously free mobile hot spot, or wireless, service. Starting July 7, smart phone customers will have to pay $30 for unlimited mobile hot spot service.
By comparison, AT&T offers monthly services of $15 for 200 megabytes and $45 for 4 gigabytes. It said 65 percent of consumers would be safely able to buy the $15 plan without going over their monthly limit. It charges $10 per gigabyte over a monthly plan.
Last March, T-Mobile began charging users from $10 for 200 megabytes a month to $60 for 10 gigabytes, its biggest data plan. When users go over their monthly allotment, the carrier throttles service so Web connections slow to a crawl.