Could Verizon nix unlimited data for everyone?

Verizon Wireless has made it more difficult to keep an unlimited data plan. But could the carrier change its policy again and get rid of the plan for everyone? CNET's Marguerite Reardon offers some insights in this edition of Ask Maggie.

Verizon Wireless isn't making it easy for loyal, longtime smartphone customers to keep their existing unlimited data plans. And now some subscribers, who are willing to pony up the full price for a new smartphone, worry that Verizon may change its policy again and get rid of the plan for everyone.

Truth be told, few people actually need unlimited data. But for those who do, it's a good deal. In fact, it's such a good deal, these customers worry about losing it. And if you're a Verizon customer who wouldn't worry?

The carrier got rid of the unlimited plan for new customers in 2011. But it allowed existing customers to keep the plan. A year later, Verizon changed the policy again, forcing existing customers who want to keep their unlimited data plans to pay full price for a new phone when upgrading. What are the chances Verizon will change the policy yet again and get rid of unlimited entirely? In this Ask Maggie, I offer some insight into this very question.

Also in this edition of Ask Maggie, I offer some advice about using a Motorola Droid Razr Maxx while on vacation abroad.

Holding onto unlimited data

Dear Maggie,
I am one of a shrinking number of unlimited data customers on Verizon Wireless. My 4G phone is almost 2 years old and showing signs of failure. I want to keep my unlimited data plan. But I am worried that if I spend $700 for a new unsubsidized phone and keep my unlimited plan that Verizon will end the grandfather exception soon afterward. I refuse to be forced onto a tiered or shared plan. Do you have any insight as to what will happen next? Should I go ahead and pay full price and hope for the best?

Thanks,
MV

Dear MV,
This is a great question. It's clear that Verizon is working hard to move subscribers off its unlimited data plan. So you are wise to be nervous.

First, Verizon got rid of its unlimited data plan for new smartphone customers in 2011. It still allowed existing customers to keep their unlimited data plans so long as they didn't change their plans when they signed up for a new contract.

But this summer Verizon changed its pricing policy once again. Under the new policy, Verizon subscribers can only keep their existing unlimited data plans if they do not take the company's subsidy for a new phone once their contracts end. In other words, if a subscriber buys a device at full price, he can keep the unlimited data plan.

What this means for you is that you will be able to keep the unlimited data plan if you do not sign a new two-year contract and you buy your new smartphone at full price. But you bring up a very interesting question: Could Verizon change this policy once again, eventually forcing you and other unlimited data customers into a tiered offering or family share plan?

The short answer to your question is "yes."

I reached out to consumer rights attorney Michael Aschenbrener, of Aschenbrener Law regarding your question to get a legal perspective. Aschenbrener explained that Verizon Wireless is under no obligation to continue offering you an unlimited data plan. Verizon and all other carriers can refuse to continue providing service of any kind to any customer once that customer is paying his bill on a month-to-month basis, he said. You have to remember that when you forgo the subsidy, you are no longer in a contract for service with Verizon.

This means Verizon can change the terms at any time. Of course, this also means that you can cancel your service at any time and not pay an early termination fee.

But what I didn't realize and what you likely don't realize yourself is that even if you have a contract with Verizon, the terms could still be modified. Aschenbrener explained that according to the terms of carrier wireless contracts, operators include a clause that allows them to modify the terms whenever they want. The only upside for the consumer is that if the carrier changes the contract, you can get out of the contract without paying an early termination fee. The catch is that you have to pay close attention to these changes.

Here is the relevant provision from Verizon's Customer Agreement.

Can Verizon Wireless Change This Agreement or My Service?

We may change prices or any other term of your Service or this agreement at any time,but we'll provide notice first, including written notice if you have Postpay Service. If you use your Service after the change takes effect, that means you're accepting the change. If you're a Postpay customer and a change to your Plan or this agreement has a material adverse effect on you, you can cancel the line of Service that has been affected within 60 days of receiving the notice with no Early Termination Fee if we fail to negate the change after you notify us of your objection to it.

What this means is that Verizon could change its policy at any time and simply get rid of its unlimited data plan. So whether you buy your new phone or even if you were still within the two-year contract period, Verizon could get rid of this pricing plan and force all customers into a tiered offering.

The question is whether Verizon will actually do this. That is a tough question to answer. It's clear that Verizon's executives don't want customers on the unlimited plan any longer. In fact, the company's Chief Financial Officer Fran Shammo has said on multiple occasions that the company is better off if all customers are on tiered offerings.

So far it looks like the policies that Verizon has in place to encourage (well, more like strong-arm) subscribers to abandon their unlimited data plans is working. Shammo said at an investor conference in September that Verizon has seen people coming off the unlimited data plan to subscribe to the Share plans . And on the company's third-quarter earnings call, he said that more customers than expected have been shifting to the Share Everything plans . And he also noted that the company has not seen a surge of unlimited subscribers paying full price to keep their data plans.

"Most devices sold during the quarter had a subsidy," he said. "But we saw some smartphone customers buying phones at full price."

This is good news for customers who really want to keep their unlimited data plans. Why? The way I see it, Verizon may feel like it can afford to appease a small minority of customers willing to pay full price for a smartphone to keep the unlimited data plan. Even though Verizon can change its pricing policy at any time, it may not want to risk the bad publicity from doing so. And why should they bother if most people are switching to the tiered offerings anyway?

A year ago, Verizon customers whipped themselves into a frenzy over a new $2 charge Verizon planned to impose on customers using the one-time online bill payment option. Verizon wanted to encourage customers to sign up for automatic online billing. Once word got out about the change, angry Verizon subscribers flooded social media channels, such as Facebook and Twitter. And the story was picked up by several mainstream media outlets.

Verizon execs quickly realized that the bad publicity from the $2 charge was not worth the potential benefit in revenue. And the day after the plan had been leaked, the company changed its position.

An outright ban of the unlimited data offer, even for existing "grandfathered" customers, could stir a similar frenzy.

On the other hand, wireless operators do seem to be a greedy lot. And I understand the distrust that you feel toward Verizon. But to be fair, Verizon has never promised this plan will exist forever.

So what should you do? If you really need the unlimited data plan because you use more than 2GB to 3GB of data per month, then it's likely worth the gamble. Buy a new smartphone at full price and hope that Verizon continues to offer the unlimited plan.

If you use less than 2GB of data each month, you really don't need the unlimited data plan. In that case, take the subsidy and sign up for a plan that better fits your needs. Odds are that you won't be paying any more for your service. And there's a slight chance your bill may cost you less.

Good luck with your decision. And thanks for reading!

Using the Razr Maxx abroad

Dear Maggie,
I have a Motorola Razr Maxx. I'm going on vacation to the Caribbean for the holidays. Can I get a local SIM card and temporarily replace it on my phone? Would that work?

Thanks,
Bill

Dear Bill,
The Razr Maxx is unlocked, so you should be able to pop out the SIM and put in a card from a local carrier. But one thing to note is that you need to make sure your device is running Android's Ice Cream Sandwich, or Android 4.0 version of software. If it is, then you should have no problem swapping the SIM.

Sarah Tew/CNET

If your Razr Maxx doesn't have ICS, don't worry. You can download it manually. Verizon has provided information on how to do this. First, go to settings on your device, then select About Phone, and select System Updates to download the software.

One thing to note is that once your device is unlocked for international use, that doesn't necessarily mean that you can put a SIM card in it from a domestic carrier and use it on a GSM network like AT&T or T-Mobile. While this is the case for the iPhone 5, that functionality is not enabled on the Droid Razr HD or Razr Maxx, according to users who have tried it.

When a domestic SIM is inserted, the device does recognize a new SIM card without requiring an unlock code. But it says the SIM card is invalid, which means it can't be used to make calls, access data, or send text messages on a GSM network.

The Verizon spokeswoman I contacted wouldn't comment on this specifically. All she would say is that whether unlocked Verizon Android phones work on competitors' networks "isn't something we test."

If some readers of this column have figured out a way around this restriction, I'd love to hear about it in the comments section following this story. I hope this advice was helpful. And enjoy your vacation. I am jealous!

Ask Maggie is an advice column that answers readers' wireless and broadband questions. The column now appears twice a week on CNET offering readers a double dosage of Ask Maggie's advice. If you have a question, I'd love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put "Ask Maggie" in the subject header. You can also follow me on Facebook on my Ask Maggie page.

 

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