Again, 'Open Network' Push Is About Nickel And Diming Users
It's been made fairly clear that as Verizon loses the ability to lock down their phones and network (forcing consumers toward their wireless handset content), the carrier is going to make up for it by squeezing the pipe and imposing some steep per-byte charges. A recently leaked Verizon memo gave insight into the company's new wireless pricing plans for Internet-enabled handsets not quite powerful enough to be considered "smartphones": $9.99 for 25MB (50 cents each additional MB) or $19.99 for 75MB (30 cents each additional MB).
If you're a smartphone customer, you can still of course pay $60 a month for 5GB worth of data, but the significant majority of customers are going to be using what Verizon's now calling "Enhanced Multimedia Phones," which come tied to this new pricing. The company this week launched the first phone that utilizes this new, not so bargain basement pricing: the 3.1-inch AMOLED touch screen Samsung Rogue:
"The Samsung Rogue will serve as the flagship phone for the company's new data pricing option available to customers beginning today. The new data pricing gives Verizon Wireless customers more freedom to select how much data and the type of data they want to use. . . Customers who want to watch full-length TV shows plus news, sports, weather and live entertainment video clips can also add Verizon Wireless' new V CAST Video on Demand plan..."
Except with such low caps and steep overages, customers interested in freely wandering the web consuming video are going to be punished for their curiosity. That's of course where Verizon comes along to direct customers back to their $10.00 monthly VCAST video service. Previously, users who rarely went online could pay (an equally ridiculous) $1.99 per megabyte, though at least they had the option of choosing to not pay if they didn't use the Internet. Heavier users could sign up for the "unlimited megabytes" offered by Verizon's $15 a month Vcast VPak.
So what's the motivation? More money for an already very profitable company, silly. Verizon Wireless' second quarter results indicated that wireless data revenue comprised 29.3 percent of total Verizon Wireless revenues (net $3.16 billion in the second quarter alone), and jumped 24 percent from one year earlier. Verizon's already impressive wireless profits are about to get more impressive, and while that's great news for investors and Verizon executives, it's not particularly great news for you, or the generally open nature of the Internet.
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