Why Verizon's shared data plan is a raw deal

Individuals end up paying more as Verizon now forces unlimited voice and text messages -- even if they don't want them.

Verizon's imposing booth at CES 2012
Jessica Dolcourt/CNET

Verizon Wireless' newly unveiled "Share Everything" plan may be a revolution in the industry, but it's going to leave a lot of individual customers unhappy with the change.

"Share Everything" allows customers for the first time to share a common bucket of data , similar to what they do with voice minutes and text messages under a family plan. The benefit comes when large families sign up for a single plan, yielding some savings.

I would be fine with the changes if "Share Everything" was just one of many options, but it's not. The new shared data plans, which includes a fee for unlimited voice and text, and a set amount of data, as well as another separate fee for each device, has become the new status quo. If you're a new customer, you'll have to choose one of these plans starting June 28. Fortunately for existing customers, they can keep their existing plans, although they will have to give up unlimited data if they choose to upgrade to a new subsidized phone.

Some people may be okay with getting unlimited access to voice and text messages, but I'm not one of them. I suspect I'm not alone. At a time when people are using data services more, which power alternative text and calling apps, they are looking to lean on voice and text messages less. That's particularly the case as many folks move to the faster 4G LTE network, which consumes data even faster.

But under the change, customers will have to give up their old grandfathered unlimited data plans right as people use more data than ever. It's a classic case of a carrier giving you more of what you don't need, and taking away what you do -- all for a higher price.

The plans are clearly geared towards families -- particularly ones in which a few members don't use as much data -- at the expense of individuals. An individual with a plan that consists of 450 voice minutes, 1,000 text messages, and 2 gigabytes of data currently pays $80 a month. Under the new structure, which offers unlimited voice and text messages, the price is $100.

As Verizon customer, I fall under the $80 plan, and rarely ever go over my calling or text message caps. I don't particularly relish the notion of a forced "upgrade" to a $100 plan -- $60 for 2GB of access and unlimited voice and text messages and a $40 access fee for a smartphone -- if I move to Share Everything.

For a couple, the new share plan would cost $150 for access for two smartphones, 4GB of data, and unlimited text and voice. That's not much different than a current share plan that comes with 700 minutes, 1,000 text messages per phone, and 2GB of data each. Current couples, however, would have to give up their unlimited data plans in exchange for unlimited voice and text messages.

Part of the problem are the high access fees for devices, which make it tough for individuals who want to sign up multiple devices under one plan. The access fee for a smartphones is $40 a month, while a basic phone is $30, and laptops, Netbooks, and mobile hotspots are $20. Even the lowest rate -- $10 a month for a tablet -- seems excessively high.

Verizon Wireless Chief Marketing Officer Tami Erwin acknowledged that some people would end up paying more under the new system, but stressed the savings that families would be obtain under the new plan.

It's easy to see why Verizon wants to focus on the family. Family plans of text messages and voice service aren't new, and have been tremendously successful at keeping groups of individuals tied to a single carrier. Verizon is hoping data will add another element of stickiness -- making it hard for family members to break away and sign up for their own plan at a different carrier.

"In a world where incentives for families favor concentrating around a single provider, the biggest providers win," said Craig Moffett, an analyst at Sanford C. Bernstein & Co. "In a household with two or three AT&T or Verizon devices -- say, a smartphone and a tablet or two, and one device from T-Mobile or Sprint...Sprint doesn't stand a chance."

The plans also open the door for AT&T to offer an identical plan -- undoubtedly with a few slight tweaks to claim differentiation -- which is bad news for individuals on that carrier.

The Verge's Chris Ziegler earlier today called the Verizon plans lackluster. I would go further and say it represents a raw deal for a lot of people.

Corrected at 4:40 a.m. PT June 13: The story previously inaccurately suggested that a person upgrading a phone or changing a plan would be forced to move to a "Share Everything" plan. Current customers can actually keep their existing plan, although they would lose their unlimited data plan after an upgrade.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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