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The Limits of Unlimited

Published: September 21, 2012
Section: Opinions


There’s an old adage that says, “sharing is caring.” While sharing stuff is great when it
comes to sentiments, childhood toys and ideas for what to do on a Friday night, there
are some things that just shouldn’t be shared. Like test answers or the flu. Now, cellphone
data plans can be added to the list.

More than a year ago, both AT&T and Verizon stopped offering unlimited data plans to
customers that did not already have them. Both companies said that they would grandfather in the customers that already had unlimited data, effectively rewarding longtime customers with a good deal.

Since the Big Two eliminated the unlimited data option, only Sprint remains among the national carriers that offer it. AT&T throttles data speeds for customers who exceed a preset limit, meaning that a customer with a limited data plan, say 10 gigabytes (GB) a month, will suddenly have sluggish service once they use 5 GB.

In the meantime, the networks introduced tiered plans where customers could buy
preset levels of data for each line on their account. With this, everyone could relax
and know that if they were responsible, they wouldn’t get knocked over by the “fee-
hammer.” Under this system, like the older unlimited system, no consumer could
ever be harmed by the data use of another consumer.

Taking another step away from offering something good for consumers, Verizon has
started to actively promote their new “share everything” plans as a replacement for
the more traditional individual and family-share plans. For customers that currently
pay $30 a month for unlimited data under the old system, the new system charges
$50 a month for a single GB. I used to think that the tiered plans were bad, simply
because they limited data and charged insane fees for overages, but these new plans
are simply horrid.

Under the old system of unlimited data, it was as if Verizon and AT&T offered data
like coffee offered at a restaurant. Customers paid for their first glass along with their meal
(the minutes and texts), with offers of free refills whenever the glass got
low. When the two networks switched to tiered plans it became as if refills were no longer free.

Under the newest system, it’s like everyone at the table gets the same pot of coffee.
Everyone ahead of time has to agree on whether or not they want regular or decaf, and how much coffee they plan to drink. When one person at the table drains the entire pot early-on
in the meal then everyone else in the group either endures the rest of the meal (month)
without a sip of coffee or individually pay more than it’s worth to get more.

If that analogy was confusing, that’s because it is. There is really no way to simply and
comprehensively explain Verizon’s system. The website, Digital Trends, broke it
down with an analogy, which says that under the old tiered-system everyone on the same bill
used to get their own cup of water, and now with the new system everyone has their
own straw and shares a single cup of water.

While the newer plans can be good for some people, such as individuals, it is clearly
bad for almost everyone on a shared plan. Imagine a family of four in which each member has a smartphone. Under the tiered system each member could buy 10 GB, giving the family a total of 40 GB. Under the new system, that same family is only allowed to buy 20
GB with a fee of $15 a month for every additional GB.

While I am primarily using Verizon for examples, make no mistake that other
networks are working along the same path. AT&T offers shared data plans, but
at least momentarily, also sells less prohibitive individual tiered-plans. While this
remains speculative, the last few years have shown that when one of the top two
networks takes a stance against consumers, the other network is rarely far behind.
If Verizon can get away with only selling the shared plans, not counting pre-paid
options, then AT&T can be expected to follow suit within the year.

Now you might ask if there’s anything good about the new style of plans. If you make
a lot of calls, and send a lot of texts, and don’t do too much data intensive activity,
then perhaps the unlimited minutes and texts will be a good offer. But if you’re
a more typical consumer, who nowadays likes to check their email, download apps,
browse the Internet and maybe even use your phone as a GPS, then while limited
data is bad enough, sharing that data among two to three other people can seem like a
nightmare.

The one reprieve available, at least to Verizon customers, is that the company is letting
customers keep their favorable, unlimited data plans if customers pay full price
for their devices. Take the iPhone 5, for example, which is priced on average at $199. If a Verizon customer wanted to buy the phone and keep his or her
unlimited data, the price skyrockets to about $649—more than triple the subsidized
price. If customers want to keep their old plans, they’d have to go back in
time to the days of the original iPhone when they weren’t subsidized and cost $499
for a fourth the capacity of the current iPhone.