Like most mobile operators, Verizon Wireless puts a hard 5GB cap on its data services, with per-megabyte overage rates for cap offenders. This is a change from policies as recent as late 2007, where data was termed as unlimited (though Verizon did terminate contracts of some who consistently went over the hidden 5GB cap). The overage rates aren’t exactly user-friendly: 25 cents per MB, or $250 per gig. Essentially, those rates are reflective of Verizon’s desire for users to stick to that 5GB cap. In other words, don’t use it when not necessary. Yet a recent development has caused the nation’s largest operator to rethink its rates.
The specific development is Verizon’s MiFi router, which converts the company’s 3G signal into a Wi-Fi hotspot. It’s a pretty neat idea, since many mobile devices, and of course laptops, utilize WiFi functions. However, with a 5GB hard cap in place, many would find such a device superfluous. Why risk going over cap when the overage rates are so ridiculous?
To combat this issue ahead of the MiFi’s release this week, Verizon has rejiggered some of its rates, including overages. First up is their $40 data plan, which previously carried a 50MB cap and was primarily useful for checking email and nothing more. That cap gets raised to 250MB. Still not great, but at least it allows email checkers a margin of error. Overage rates for both plans, previously at 25 cents per MB, have also been lowered. The $40 plan carriers a per-MB rate of 10 cents, and the $60 plan now charges just 5 cents per overage MB.
Beyond making plans more appealing to its own users, Verizon is also putting pressure on the rest of the wireless industry to follow suit. After all, if Verizon is lowering its rates how can AT&T justify their 50 cents per MB overage rate? They won’t be able to for long. The hope is that Verizon’s move spurs an industry-wide overhaul of data management, but that’s a bit optimistic at this point. Lowering overage rates is a decent, but not great, start, even if an additional gigabyte of usage is still $50.
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