Verizon’s 4G wireless network will be available in most major cities by the end of the year, though pricing for the service hasn’t yet been revealed. In an interview with the Wall Street Journal, the company hinted at speed-based service fees similar to how home broadband plans are priced.
Just like with broadband providers such as Comcast and Time Warner, Verizon would theoretically offer several tiers that increased in price as connection speeds increased.
It’d certainly be a departure from how cellular data plans are currently offered—everyone gets the same maximum speed, regardless of the data plan—but Verizon could make the argument that 4G speeds are so much faster than 3G speeds that some people may want the option to pay less per month even if it means artificially limiting the maximum connection speed. Even the slowest 4G connection speed offered would likely be faster than currently-available 3G speeds.
While Verizon’s 4G network may be priced based on speed tiers, Sprint’s 4G network has already rolled out and promises the same maximum throughput for everyone. T-Mobile and AT&T have similarly structured next-generation networks as well. So as consumers, we’re free to go with another network if we don’t like Verizon’s pricing thanks to the magic of competition.
What’s troubling is that Verizon CEO Ivan Seidenberg thinks that competition isn’t necessarily healthy. According to the article:
“Mr. Seidenberg also had some words for his smaller competitors like Sprint Nextel Corp. and T-Mobile USA, which claim to have their own 4G networks up and running already. He thinks the companies, along with other smaller wireless operators, should join forces. ‘There are too many players in the industry,’ he said. ‘I think it would be healthy if there’s more consolidation.’”
Healthy for whom? Consumers? We’re just recently seeing these smaller players significantly undercutting the monthly pricing plans of the four major carriers. Imagine if everything got consolidated. You’d have Sprint and Verizon join to become the one big CDMA-based carrier, and T-Mobile and AT&T would combine to become the GSM carrier. It’s highly unlikely that our monthly cell phone bills would drop with only two carriers in the market.
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