Broadband services tend to get faster year after year, and there is a rumor circulating that Verizon’s 4G LTE is so exceptionally fast that the company might need to reconsider making unlimited mobile broadband plans available, at least for an unknown period of time just after the introduction. The problem is rather simple, but somewhat ironic: 4G LTE is just so incredibly fast that consumers might be prone to overuse it. Verizon is no stranger to fast broadband services, but many people tend to associate Verizon with their DSL or FiOS offerings instead of their wireless broadband services. Perhaps this is a strange oversight considering that Verizon Wireless is a coast-to-coast operation, and therefore serves a greater number of markets than any other form of Verizon-powered broadband.
How does Verizon’s implementation of 4G LTE stack up against DSL, FiOS, and other types of broadband services? Reports from field trials in early 4G deployment regions such as Boston are currently reporting download speeds of 50 to 60 Mbps, which is extremely attractive. Whether these speeds are attainable in real world situations, with hundreds or even thousands of customers using the same antennae and network infrastructure, is certainly debatable. This means that 4G LTE speeds will be extremely competitive, perhaps even between DSL and FiOS speeds.
Too Many People + Ultra-Fast Wireless = No More Unlimited Bandwidth
While there is no official word on whether or not Verizon Wireless will offer an unlimited usage 4G LTE plan or not, it would stand to good reason that Verizon Wireless would have some concerns. Before discussing those terms, it is important to note that Verizon Wireless currently their caps ‘unlimited’ plans at 5 GB per month in order to protect themselves from consumers that will use their broadband access non-stop, placing undue stress on their network resources. There is ample justification for such a limitation, as broadband giant Comcast also has caps in place for their unlimited cable modem services, and many other providers offer similar caps whether or nor not they are entirely forthwith about them. Such limits may not be disclosed in the simplest of language in all cases, and may fall under the portion of the contract that discusses unilateral termination.
The bottom line is that broadband access can only be affordable to consumers when providers are able distribute their expenses amongst as many consumers as possible. Consumers who use an undue amount of resources are essentially ruining the experience for other consumers, and thus need to either be charged extra or have their contracts terminated. With Verizon’s ultra-fast 4G wireless broadband service, the company may be at a point where their offerings are so fast that a 5 GB monthly data cap is simply not practical.
New Devices = More People
Another factor that might be weighing heavily on Verizon’s decision making process is the fact that mobile devices are on the crest of becoming fast enough to make full utilization of existing mobile broadband technologies, and devices capable of making excellent utilization of 4G services should be available in a year or two at the most. These devices are also coming equipped with enough power to make web browsing, media playing, and even media editing possible without the long pauses and slow performance that have characterized mobile devices until very recently. The net result is that consumers might begin adopting wireless broadband in record numbers, which means that companies such as Verizon Wireless need to do what they can to protect their interests, specifically those relating to the ability to serve their customers well.
Verizon could also invest additional funds in deploying additional 4G network infrastructure, but Verizon is a publicly traded company with a responsibility to be profitable. Profitability means that any expenses that Verizon incurs while deploying new networks will need to be recovered via higher fees to their consumer base. The proliferation of new devices that might attract consumers should help make fee increases more reasonable, but only if customers adopt such devices and/or Verizon Wireless 4G services in large numbers. In short, the future is something of a gamble for Verizon Wireless, and using bandwidth caps with per usage fees helps protect the company for undue risk. It also may help teach consumers to behave in responsible ways regarding their data usage patterns.
The Verdict
There are so many variables to consider, but a few things are clear. Firstly, Verizon’s 4G looks like it will be incredibly fast, and that is a very good thing. Second, Verizon’s existing bandwidth caps are very generous, and are hard to reach with most mobile devices unless one is using a broadband modem and a laptop 24/7. Lastly, Verizon is likely to deploy 4G services in stages, with major markets receiving the upgrades first and secondary markets receiving the eventual 4G roll-out over time. This should give Verizon plenty of time to fine-tune their offerings to meet the needs of consumers, and that is ultimately the goal of any company.
