Verizon does a Netflix

For about a month I have been following rumors that Verizon was going to introduce Family Shared Data Plans and use them as an excuse to get rid of grandfathered unlimited data customers like me. Today the official news hit the interwebz. The rumors were true, and the changes are worse than we could have imagined.

  • The good: They are introducing unlimited-talk unlimited text plans.
  • The bad: Talk may be cheap, but data is horribly expensive – starting at $50 for 1GB, going up to $100 for 10GB, with nothing beyond that.
  • The Ugly: Upgrading to a subsidized (i.e. cheap) phone will rip you out of your grandfathered unlimited data plan.

On their website they say “you have a choice”… but the choice that they give you is “pay full price for your phone or lose your unlimited plan“. Some choice.

When I upgraded to a Smartphone last year, I was offered an “Unlimited” Data plan. Six weeks later, they discontinued the unlimited plan. I was informed that I was “grandfathered in”, meaning that as long as I did not change my plan, I would keep unlimited data, even if I upgraded my phone.

Most months I have used 1-2GB of data, though one month, when I was streaming with Netflix, I believe that I passed 5GB, but that was an outlier. So I am hardly a “data hog” – Verizon’s main reason for killing unlimited data.

In addition to my phone, our plan has two non-smart-phones (Verizon calls them “Basic Phones”, but to almost everyone else they are “Dumbphones”), partly because $30 a month is a lot to pay for data that you don’t really need, and partly because Her Ladyship has a tendency to drop things. While I initially balked at the price, the value of the data has been worth the dollar-a-day cost. Our total monthly bill comes to just over $120. The new plan will cost about $150 (180-25%+taxes, fees and insurance), assuming I use only 2GB per month. If I use more then the cost goes up dramatically.

Ever since Verizon discontinued the Unlimited Plan, they have been trying to get people off it. The latest announcement – apparently an off-the-cuff remark by the CFO – has revealed their latest scheme: if you upgrade to a discounted phone, you lose Unlimited Data. This is particularly irksome to me; the one weakness of the Droid X2 is that it is a 3G phone – one of the last ones released. I had hoped to upgrade to a 4G phone and keep my unlimited data, now it feels like they are snatching out the rug from under me.

*Sigh* First “upgrade fees”, now this…

I understand that Unlimited Data Plans are a monkey on a Cellco’s back – but if they can’t handle the traffic, they should not offer the plans. I also understand that some users who, in their zeal to “get their moneys-worth”, use exorbitant amounts of data, need to be throttled. But there are other ways to crack that nut; just identify the persistent data hogs and deal with them individually. The aggressiveness of this move smacks of Verizon’s having made promises with every intention of reneging on them later.

This sort of brain-dead corporate maneuver is nothing new: late last summer, Netflix decided to raise their prices by 60%. At the time, I commented about what a bad idea that was, but Netflix management thought that the impact would be minimal. Events proved me right; they had a disastrous Q3 and Q4, with a crash in the share price and a net loss of over 800,000 customers. And that didn’t include many more people like me, who stayed but cut back their service. Having seen the comments about Verizon’s proposed change, I am of the opinion that this move is every bit as bone-headed as what Netflix did last summer.

While Shared Data Plans are a good thing, in principle, customers should have the choice to keep the deal that they signed up for if they prefer. Trying to force your customers to do business on your terms is rarely a good long-term strategy.

So… if I want to remain “unlimited”, my options are now:

  • Upgrade my phone to a 4G one before the change comes into effect. This would be a lot of hassle, but is doable.
  • Wait until after the change comes into effect, then purchase a new or used 4G phone.
  • Leave Verizon when my contract is up.

In conclusion, I cannot help the feeling that this is Verizon’s way of trying to get more money out of me while offering me less in return. There is absolutely no reason why this should be an “either-or” situation. They should honor their loyal customers, offering both options and let them decide which option is best…

…instead of trying to force the decision upon them.

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  • […] it is because I was not planning on this upgrade – Verizon sort of forced me into it by changing the rules. I had to upgrade if I wanted to keep my unlimited data plan and not pay full price for a new […]

  • […] to weed out "unlimited freeloaders" like us. Pardon the self promotion, but here is a blog post that I wrote on the subject back in […]

  • By Dead Man Walking « Wizard Prang's Blog on October 4, 2012 at 11:39 AM

    […] takes years to build a great reputation — and only one bone-headed decision to ruin it.I don’t know what is wrong with TiVo. Maybe they have a new CEO who is […]

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