Verizon CTO: flat-rate data 'isn't long-term sustainable'
By Chris Ziegler 
posted January 11th 2010 5:25PM
posted January 11th 2010 5:25PM
We'd secretly hoped that 4G would spell the end of 5GB caps on so-called "unlimited" plans, but the problem is that new categories of wireless devices are coming into the mix so quickly that we're likely going to get crunched no matter how advanced the technology -- hence the FCC's pleas to free up spectrum. Echoing comments made recently by AT&T Mobility head Ralph de la Vega, Verizon CTO Dick Lynch is saying that he doesn't see how they'll be able to offer an all-you-can-eat plan when the company's LTE network goes live over the course of the next few years, citing its open development initiative as a key reason -- it's losing control over what devices (and what kinds of devices) can get on its network, raising the odds that there'll be gadgets that incur particularly heavy use. It's a disappointing line for the company to take, but possibly a necessary evil in a truly wireless world. Long-term, the FCC and FTC might need to take a good, hard look at real-time network utilization to verify that Verizon's pricing is in line with its claimed usage, but for now, let's hope we don't all get priced out of our MiFis.
Move to TMO
@Xtole
This guy sounds like he's making excuses for continuing to charge ridiculously high rates to customers. I switched from Verizon for two reasons: Plan prices and the Palm Pre (four P's, lol).
@Xtole
"Dick Lynch" ...
Regrettably it just rolls off the tongue.
@Xtole
T-Mobile may be slightly less frustrating than the others in some respects, but charging based on usage would be a big step backwards for Verizon (which does not limit bandwidth for its smartphones).
We're now down to effectively two dominant carriers (with two more struggling to keep up). Ironically, if Verizon looks to beat 4G into usage-based pricing submission, it may benefit Sprint with their (heretofore unlimited) Clear WiMAX 4G service. Unless they follow suit, in which case I suspect the Google, the FCC, and others may well pursue other spectrum and alternatives.
And when did Engadget become wireless carrier apologists?
@Xtole
Yes! I find it absolutely hilarious that AT&T and Verizon are engaged in this huge pissing contest while completely ignoring T-Mo. Really... T-Mo is getting all the best phones, and they don't do the nasty rubbish with their network that AT&T and Verizon do.
I was stunned by my experience when switching: I just walked into the store and told them I recently bought an unlocked phone and want to switch to them, and they didn't even try to sell me one of their phones. Within ten minutes, I was signed up for an Even More Plus plan, and I was out the door. I've never had such good customer service from any carrier in the past.
Seriously... it went like this: "This is what I have, and this is what I want." "Sure!" "Here's my credit card." "Here's your SIM card."
@a dumb cat
I'm all for charging heavy use customers more. Of course, I will only support that when they starting charging low use customers less. I know, I know, it will never happen.
@jgp
Yeah keep telling yourself that.
@jgp thats not surprising, T-Mobile been announced that they will support whatever GSM phone you bring in to a certain point
@Xtole
this guy is bringing up a very valid point...
the bandwidth new phones are using is going to skyrocket as we move to new platforms... do you really want verizon to turn into at&t because its tubes are clogged?
i know its not as simple, and yes i would say give us a flat fee unlimited plan... but at this point no one knows what phones are going to be like in 2 years... TV and all other media is moving to internet based platforms... so really verizon just wants to wait it out and see what happens.
@jgp if they had SLIGHTLY better service in Philly... I would be there in a second.
@jgp
Sure, great phones, great plans, but lousy service across much of the country. That low rate for data does me little good when it's not 3g at all.
@justen tmob also has like half the subscribers at&t and verizon do. you say all the best phones like they have much more than just android devices. look at at&t's smartphone lineup, verizon's smartphone lineup, i would say that they probably have better data when it comes to how those smartphones can affect their respective networks when they have a ton of people using them.
@halfofalmost
T-Mobile would not be where it is today without BlackBerry. They also launched their first Android device almost a year and a half ago now. Sprint has had the Palm Pre since this past summer, their best selling phone (smart or otherwise) to date.
For Verizon, my instinct is this has much more to do with revenue than capacity, since they're saying they won't have any problems handling the iPhone or future devices. For AT&T, it has more to do with profit than capacity: AT&T has had several years now to build out their network to handle smartphone demand, and instead have banked the profits and neglected their infrastructure.
What he really meant was: "Long term flat-rate profits aren't long-term sustainable. We need new ways to charge outrageous fees for services."
I'm always amazed people absolutely *love* Verizon, or any teleco for that matter. Why so much loyalty from an industry actively looking for new and exciting ways to screw you out of what you're already supposedly paying for?
@Nerdtalker
Though their prices are definitely high, I love the fact that I'm getting reliable cell and 3g coverage almost everywhere. It'd be nice if it were cheaper but I'm definitely getting my moneys worth.
@Nerdtalker
I don't love Verizon, I love that I have a signal pretty much everywhere. Everything else is same old same old for corporate america.
@Nerdtalker - Someone please tell me how I can get "flat rate" pricing on my utility bill (gas/electric), Please? Better yet I would also like "flat rate" pricing at the gas pump too. Oh, and don't just give me "flat rate" pricing a some crappy buffet. I want all you can eat "flat rate" pricing at Ruth Chris as well.
The moral of the story here is in most other areas of life you pay for what you use and why should I be paying the same "flat rate" as some fuxnut tether'er/torrent'er bandwidth glutton! Just sayin...
@Nerdtalker
I take it you've never heard of Brazilian-style steakhouses? They have wonderful food and a flat rate. While it's certainly one hefty flat rate (usually around $50), it's worth it.
@Nerdtalker
You know what I would like them to explain?
Why do they charge 20 cents to text LOL to someone?
Really the data burden for a text is worthy of charging 20 cents a piece?!?!
Biggest network around can say whatever they want. Verizon could care less when I left. One of the reasons I switched to Sprint from Verizon was because they really need my business.
That and this awesome Palm Pre.
@glamajamma
couldn't care less*
@Peter F
Could care less is perfectly fine. You're a square
@glamajamma: too bad verizon's getting a better pre. better keyboard, better sliding mechanism, double the storage, and no silly nub button. :(
@pukerocket
Technically you are correct, if he was implying that Verizon could care even less than they do about him leaving. But, I think he really did just make a grammar mistake. Simple enough though, because a lot of people do that.
@prokanda
Care to provide some links, pictures and technical information to back up your statement?
@r34p3r This doesn't cover it all, but...
http://www.palm.com/us/products/phones/preplus/index.html
@r34p3r
Lol, dude. Prokanda is just reiterating what Engadget stated with their hands on with the palm pre plus. All the things he mentioned, the Engadget staff confirmed.
@r34p3r
have you been loving in a bubble?? Did you miss that little "CES" tradeshow held in that tiny desert town of Las Vegas? Engadget covered it extensively and yes, verizon did announce a Pre w/ 16GB memory, no nub, and a retooled slider and keyboard, n00b. Don't ask for links- go up to the search box yourself, or better yet, go to Engadget on our PC and just go back a day or 2 in the posts.
what a dick
@ppmcdoodles you stole my line.
@ppmcdoodles no, this is:
8=======D
Yeah, this is complete bullshit.
This + that 350$ ETF for an "Advanced device" makes them top dawg among the ubergreedy.
@(Unverified)
Yeah, companies should give devices to people for cheap when they scam the system. Oh wait, no. The high ETF may not be the best solution, but they can't keep bleeding money to the people that try to rip them off. That's not a very sustainable business model. If you just want loads of stuff for free, you'll have to vote socialist and hope you are dead by the time the nation spends itself into collapse.
@Abe
Yeah since everyone is "Scamming the system" -- damn scammers!!!
@(Unverified)
No, most people are definitely not scamming the system. This is a case of the same old story that repeats itself over and over again: a few people cheat the system, and everyone else has to pay for it.
@Abe
So if only a "Few" people are doing it, then it really shouldn't have that much impact then! Wake up, these companies are greedy as fuck, they will use every and any excuse in the book to punish us all.
@Abe ...go cash your verizon check.
@(Unverified)
Hmm, yes, it doesn't have that much of an effect until the few spreads into the many, "Hey guys, I can get a new Droid for $275!!" And then everyone else is doing it, and then it IS a problem. Wake up, if companies didn't look out for their own interests, they would get crushed, and then there goes consumer choice because no one is interested in starting a business that will just fail.
@h666
Also, I should mention, I don't use Verizon because it's too expensive for me. And yet, I realize that Verizon doesn't owe me cheap phone service.
@Abe
After your last two posts, I can't help but think of the great Mark Twain.
“It is better to keep your mouth shut and appear stupid than to open it and remove all doubt.”
@jon
Me thinks some economics and hard work would cure your outlook on life, jon. Someday, you will realize that the world owes you nothing.
@Abe "Wake up, if companies didn't look out for their own interests, they would get crushed, and then there goes consumer choice because no one is interested in starting a business that will just fail."
Wrong. If companies don't look out for their own interests, Uncle Sam steps up and gives them billions in free cash/interest free loans. Get with the times, duh.
@Abe
Good thing the bill of goods on the droid is only $170 or they'd be losing money.... but wait - isn't that what the ETF is supposed to cover? Sounds like the appropriate ETF is -$150
@PerryAJ
I had to laugh. You got me there. Sadly, Ayn Rand will probably be proven right.
@JSM
If a profit could really be made by selling Droids for $170, or even $300, someone would already be doing it, because they would sure get all the business, and companies like getting all the business. The fact that no one is doing it should tell you something about your ideas for a cheap Droid: it isn't worth it for anyone to do it, or else they would be doing it.
@Abe
And I'd guess entering the real world where companies are so good at protecting themselves from their customers that the government has to step in, could do you a world of good.
But that would require leaving daddy's teat.
@ivwshane
I don't really mind that you are calling me names, but I would like to clarify that I'm making the exact point that you are making. Companies exist for profit. If someone is not offering the deal you think they should on phones or phone service, that's because it is not sufficiently profitable for them. There is really nothing evil about this. If you want to create a non-profit telecom company, by all means, do it. I would like to use your cheap service until your business goes bankrupt.
@jon
I find this slightly ironic. I'm saying that Verizon or any other company should have the right to charge whatever they want, that's the world of business- if you don't like it, grow some balls, do some hard work, create your own company and do it differently. And you are saying that the government should step in and hold our hands to protect us from all the evil businesses (because, surely, all companies are pure evil). And yet somehow, I'M the one on the teat? I've had some logic courses, but they must have been insufficient, because I can't understand the logic in your assertions. Please, enlighten me.
@ivwshane
I apologize, I see that you weren't talking to me. Still, you could afford to be more pleasant to others. No reason for name-calling here.
@surgex
Your argument is irrefutable. :)
@Abe As a tried and true capitalist, I fully agree with you. If a company can't make money and profit off of their products and services, why does it exist?
However, I think everyone's beef with Verizon is that other carriers (specifically T-mobile, based on several responses) *don't* charge the outrageous ETF fee and *aren't* planning on getting rid of flat-rate data charges. It makes Verizon look "greedy", and unless they can directly convince their customers that the money they're gaining from these increased fees is being put to good use, they're gonna pay for it dearly.