Verizon: Flat Rate Data Not Sustainable Long Term

NETWORK HOGS: Verizon’s CTO Dick Lynch does not see how the company can offer flat-rate LTE data plans. The company’s open development initiative means Verizon is loosing control over what devices can connect to its LTE network when it goes live over the course of the next five years. In particular Verizon is worried about devices that will hog network bandwidth.

WRONG REACTION: Verizon’s reaction is reasonable but exactly the type of response that will result in massive under-utilization of its advanced data network and loss of revenue.

APP FOR THAT: Let’s assume that in a year or two there are no flat-rate data plans available from Verizon on its fast LTE network. There will be tiered plans. And there will be software tools that will control data connections, in many ways. These software tools will allow us to take fine control over every aspect of our portable devices.

FINE CONTROL: For instance, I can see an app that controls whether or not visual voicemail will be used. If I am bumping into my limit at the end of the month, the software will shut off visual voicemail and revert to the regular painful mode eating up voice minutes instead of data. The tool will also throttle down data transmissions to download just the email headers. I can also see an option where it allows information to be sent only when connected to WiFi. This type of app will certainly be great for the consumer but it will not necessarily be great for Verizon.

CHEAPEST DATA PLAN: The incentive for any Verizon customer wishing to add data to a voice plan is to get the cheapest data plan available. This will be possible because the software app that I am envisioning will make sure you never go over the data plan. And more and more folks will do what I do: find places where WiFi is free. In my area there are: McDonald’s, Le Boulanger, the public library, It’s a Grind, Starbucks (my U-verse account gives me free WiFi at Starbucks) and a few others. And that won’t be great for Verizon. Source: The Washington Post via Engadget