Remember when cell phones became so popular that it was almost impossible to make a call? It took awhile for the carriers to build out their networks to provide at least minimal service some of the time.
One way they paid for that was to start charging by the minute. Family plans helped spread the pain and made the metered pay plan more palatable.
Then smartphones came along and started burning up wireless broadband as well as talk channels. This is all great when it works but as more people discover that, the carriers find themselves again facing demand that quickly exceeds supply.
One solution would be to be spend even more money building ever bigger networks but with only so much spectrum to work with, there are limits that eventually exert themselves.
Besides, the problem (as the carriers see it) is not the occasional user who sends in his money each month and goes online or makes a call a few times a day. No, the problem is what carriers and the editorial page editors at the Wall Street Journal are now calling bandwidth hogs – consumers who actually spend a lot of time consuming the product they're paying for.
After all, the carriers have been selling bandwidth by its speed rather than quantity, the clear implication being that customer can watch videos and cruise the Web 24/7.
So we're back where we were a few decades ago. The carriers have created another monster. They're spend big bucks promoting wireless data and they're been so successful that the next goal is to stop people from using quite so much of it.
Verizon Wireless is said to be steeling itself for the transition, preparing to announce this summer that it will eliminate smartphone plans that allow unlimited wireless data, replacing them with tiered pricing that will force heavy users to pay more.
To soften the blow, the company will offer options like family plans for data, a Verizon Wireless executive told the Reuters Global Technology Summit.
“We have individual minutes for individual users. Then we eventually got to what we call family share where everyone in the family shares the same minutes,” said Verizon Wireless Chief Financial Officer Fran Shammo.
Shammo said it would be a “logical progression” to have family plans that allow a family to share their bandwidth allocation among a number of devices – smartphones, tablets, laptops and so forth. But Shammo said there was no firm timetable for the transition.