Verizon Mulls Charging Extra for Faster Wireless Data Speeds

Verizon Mulls Charging Extra for Faster 4G Wireless Data Speeds
Verizon Mulls Charging Extra for Faster 4G Wireless Data Speeds

Verizon (VZ) is considering expanding its wireless data pricing plans to include rates based on the speed at which data is delivered -- potentially adding yet another layer of complexity to the rapidly evolving systems by which customers are charged for consuming mobile data.

Verizon is reportedly toying with the idea of charging a premium for the faster data speeds delivered on its new 4G network, which is expected to be available throughout much of the U.S. by the end of the year, according to a Wall Street Journalarticle. If the telecom giant goes ahead with data speed pricing, it wouldn't be the first time an Internet service provider has made such a move. Remember dial-up rates versus broadband rates?

But where things have become more complex of late is in the realm of tiered wireless data pricing, which AT&T (T) kicked off earlier this year, and which is now being offered as a holiday promotion by Verizon. Under tiered data pricing plans, users have caps on the amount of data they can use in a given month, in contrast to the old industry standard of offering a plan with a flat rate for unlimited use. Data hogs love unlimited data plans, especially with the increasing popularity of online video and the ubiquitous availability of Internet access.

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Although Verizon is testing the waters of a tiered data plan with its holiday promotion, company CEO Ivan Seidenberg has kept mum on whether its unlimited data plan would eventually be eliminated altogether, according to the report. Hold onto its unlimited plans could be a double-edged sword for Verizon: One the one hand, it could go a long way in retaining and attracting new customers who have high data-consumption needs, but, on the other, those data-hog customers will be more expensive for Verizon to serve.

Verizon, however, apparently views its 4G network as potentially providing a means to mix things up on the pricing plans and hopes to land data hogs who are willing to spend more for faster speed.

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