Verizon Wireless Math Strikes Again: Pay Much More For Less!

from the pay-more,-get-less dept

Mon, Oct 11th 2010 10:54am — Mike Masnick

You may recall, from a few years ago, the concept of "Verizon Math," where the company had tremendous trouble understanding the difference between dollars and cents once you added decimals into the equation, repeatedly telling someone that .05 cents was the same as .05 dollars. While this isn't quite as insane, Techdirt reader Pangolin shares with us his experience in trying to see if there was a better deal on his Verizon MiFi that would let him use more than the capped $60/5GB plan at a reasonable rate. Since he was going to be using the MiFi more frequently, and might have to download large files for work, he was worried that he'd be going over the cap, and the $0.05 dollars per MB overage fee seemed high. He figured there must be a "pro" or "business" plan that might make more sense.

After searching and being unable to find it, he began an online chat with a Verizon rep (included in full after the jump below) where he discovered that the upgraded plan was for twice the data... but for more than three times the costs: 10GB for $199. And overage rates? On that plan, they're knocked up to $0.25/MB. As Pangolin notes, why would anyone pay for that, when they could just buy two or even three of the regular MiFi plans, and get a ton more data transfer and significantly lower overage fees even if they did go over. Verizon's answer? "Sorry."

For what it's worth, as Pangolin notes, there's no info online about a higher capped plan, and I contacted Verizon Wireless PR to ask them if such a plan existed. I got back a non-answer, pointing to the webpage showing the 5GB cap. So I asked again. And got no answer. So I asked again. And got no answer. On the fourth try, I was finally told that such a plan does not exist. Yet, if you look around many others have been offered the same plan, and various websites have reported on it as well. So, it sounds like Verizon does offer this oddly priced plan that makes no sense... but just doesn't want to admit it. It makes you wonder why they even bother at all.

In what world does it make sense to charge significantly more for less on an upgraded plan? Full transcript of the chat after the jump...

Please wait for a site operator to respond.

You are now chatting with 'Itrena'

Itrena: Hello, Thank you for visiting our chat service. May I have your 10-digit mobile number area code first and your name as it appears on the account please?

Pangolin: nnnnnnnnnn Pangolin

Itrena: For security purposes, may I please have the billing password on the account?

Pangolin: Question: Do you offer any business based or other plans that would allow larger than 5 GB or an overage charge less than .05 a mb? Password xxxxxxxx

Pangolin: Might be xxxxxx

Itrena: I'm sorry! That is not he billing password. We do have 10gb for 199.99 a month.

Pangolin: I hate this password stuff because I never use it - try xxxx

Itrena: Great, yes, that is correct. Thank you so much for verifying that information.

Itrena: We do have 10gb for 199.99 a month.

Pangolin: That's almost 4 times the 5 GB - that's quite outrageous. Wow. What about the 59.99 plan with less than .05 a mb? I don't think I'm in danger of going over but will be traveling a bit more. I could get a second and 3rd card for the $199.99 a month!

Pangolin: What about 99.99 a month? Maybe the 199.00 is a typo!

Itrena: No, I'm sorry. The price is 199.99.

Pangolin: OK - that's the only other plan available?

Itrena: Yes, it is. I'm sorry!

Pangolin: What's the overage charge per MB on that one?

Itrena: 0.25 a mb.

Pangolin: Please confirm that on the $59.99 plan I am on that the per mb charge for overage is .05 mb.

Itrena: Yes, that is correct .05 for overages.

Pangolin: So for almost 4 times the price I can double my usage but pay 5 times as much for any overage. That's not much of a deal is it?!?

Itrena: It is not again I'm sorry! But that is the price.

Pangolin: I understand you don't set them! Thank you for your time! I'll leave things as they are for now.

Itrena: Thank you for chatting with us have a Great Day!

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

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Filed Under: mifi, pricing, wireless
Companies: verizon wireless

36 Comments

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Yogi, 11 Oct 2010 @ 11:07am

expensive!
Damn, that's one hell of an expensive connection! I wonder how prices compare across the world - the prices in the States seem to be a lot higher than anywhere else.
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- Anonymous Coward, 11 Oct 2010 @ 11:17am
  
  Re: expensive!
  Ummm, not to put too fine a point on it, but the United States has changed over the years from Republic, to Democracy, to Regulatory Capture as a system of government.
  
  A friend of mine calls it inverse socialism: The means of production own the government.
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  - Dark Helmet (profile), 11 Oct 2010 @ 11:21am
    
    Re: Re: expensive!
    "The means of production own the government."
    
    Otherwise known as phase 1 fascism....
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  - Ima Fish (profile), 11 Oct 2010 @ 11:36am
    
    Re: Re: expensive!
    I call it reverse Fascism. Instead of the government running industry, industry runs the government.
    [ link to this | view in chronology ]
    - Dark Helmet (profile), 11 Oct 2010 @ 11:39am
      
      Re: Re: Re: expensive!
      “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” -- Benito Mussolini
      
      Note that he does not stipulate as to which takes control of the other....
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Jon B., 11 Oct 2010 @ 11:24am

Well, at least the Verizon rep didn't try to defend it. It sounds like even the rep might have been a outsourced drone, so even though the rep didn't say "Yep this is stupid" they probably would have agreed. Plus if Verizon isn't advertising it (or even admitting they have it), then it's possible this is an old plan that's still in their computer system (because some poor sap in still on contract with it)

Also, even though I saw this on my RSS feed, I still think the word "jump" is retarded :-P
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A Dan (profile), 11 Oct 2010 @ 11:30am

Peanut butter and McNuggets
You don't always get a better deal by buying more at once.
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Anonymous Coward, 11 Oct 2010 @ 11:39am

The likelihood is that Verizon is attempting to penalize heavy downloaders -- hence the higher price. They would rather sell 5 or 6 $60 plans to people who use 150M/month than 1 $200 plan to someone who uses 10G/month. It's free money for them if they oversell their bandwidth and heavy users reduce the amount they can oversell without complaints from the sheep... err, I mean the users.
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mischab1, 11 Oct 2010 @ 11:45am

In what world does it make sense to charge significantly more for less on an upgraded plan? One where they can say they have an upgrade option but don't actually want anyone to use it. Of course denying it exists defeats the whole purpose.
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- Mack46, 11 Oct 2010 @ 12:49pm
  
  Re:
  mischab1 is exactly right. It's not stupidity to have this pricing. Verizon's CMDA network cannot handle ridiculous traffic loads, so they have to throttle it to give the best service. Hence the pricing to discourage heavy data users. AT&T hasn't figured that out and have an uprising of their users. (I'm one of them, BTW.)
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- Mack46, 11 Oct 2010 @ 12:49pm
  
  Re:
  mischab1 is exactly right. It's not stupidity to have this pricing. Verizon's CMDA network cannot handle ridiculous traffic loads, so they have to throttle it to give the best service. Hence the pricing to discourage heavy data users. AT&T hasn't figured that out and have an uprising of their users. (I'm one of them, BTW.)
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PRMan, 11 Oct 2010 @ 11:49am

Switch to Sprint?
Try other providers... Verizon is good, but uber-expensive.
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Berenerd (profile), 11 Oct 2010 @ 11:53am

So with my calculations and using the Verizon site...
Expanded plan you are paying
$19.999/GB for 10GB plan
$11.998/GB for 05GB plan

Lets do some more math...Lets say you use 15GB/month on each plan....
$96.666/GB for the 10GB plan with overages. (199.99+(5000*.25))/15
$37.33267/GB (rounded)for the 5 GB plan with overages. (59.99+(10000*.05))/15

Looks like the smaller plan is cheaper all around. Now lets go with 3 Data plans at 59.99 each. That is only $11.998 (59.99*3)/15

i am curious to what AT&T would charge for the expanded time if they offered it. Back on my corporate plan in my last job with Verizon they capped me at 5GB. The COMPANY had a contract where overages were not charged. So I guess if you are a company with 60k employees+ world wide, you might be able to barter a better deal. better start hiring yourselves some employees.
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Josh in CharlotteNC (profile), 11 Oct 2010 @ 11:59am

Not learning their lesson
".05 a mb"
".05 for overages"
"0.25 a mb."

Units are important. This is where they got in trouble the first time, mixing the units between dollars and cents. Completely leaving off units is arguably worse.

.05 what per MB? Dollars? Cents? Potatoes?
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- Pangolin (profile), 11 Oct 2010 @ 12:23pm
  
  Re: Not learning their lesson
  It's pretty clear on the web site that it's 5 cents per megabyte of overage. I'm still amazed there's not a better offering.
  
  As to sprint - I have a sprint card too. It's on "holiday" right now but when active still has the 5gb cap as well as shoddy coverage compared to verizon. It is nice that they let you put it on holiday for a time though.
  
  In self defense I added tethering to my iphone so I have a solution from each carrier.
  
  Even so - just a moderate update to system software that happens in background can use 1/2 a gigabyte in a hurry. Do that on 5 connected machines and half the bandwidth is gone in an very short time.
  
  If there's a mobile solution other than these 3 carriers I'm all ears.
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fogbugzd (profile), 11 Oct 2010 @ 12:10pm

Monopoly pricing
When you have near-monopoly power and enough people locked into long term contracts you don't need to worry about having a pricing system that makes sense.
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- Woadan, 12 Oct 2010 @ 12:48pm
  
  Re: Monopoly pricing
  Verizon Wireless is 55% owned by Verizon Communications and 45% owned by Vodaphone. In this case, it is not a monopoly, or even close to it. Were we talking about a FiOS or DSL connection plan, it is Verizon Communications, and it is not a near-monopoly, it is one.
  
  I hate Verizon as much as the next guy. But let's not confuse the issue by making assertions that can't be backed up.
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  - Gabriel Tane (profile), 13 Oct 2010 @ 6:54am
    
    Re: Re: Monopoly pricing
    Well, to clarify things... a monopoly is not determined by who owns the company. It's determined by how many separate competitors there are out there. The fact that VZ Communications owns their FiOS and DSL does not make them a monopoly. The defense that VZ does not have a monopoly comes from the fact that Sprint, AT&T, T-Mobile, MetroPCS, Boost, et al are all separate providers. Unfortunately they all universally suck ;)
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Mike42 (profile), 11 Oct 2010 @ 12:28pm

Don't know what you guys are complaining about...
8 months ago it was $250 for the 10 gig cap. And the normal overage fee was 25 cents a meg. They dropped their prices! Why aren't you happy?
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- Pangolin (profile), 11 Oct 2010 @ 1:31pm
  
  Re: Don't know what you guys are complaining about...
  Funny. It's like a certain large retailer. Where a 25 foot garden hose is $5.00 but a 50 foot one is $15.00. A quart of milk for $1.99 or a half gallon for $5.00. I guess it's "New Math".
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  - Paddy Duke (profile), 12 Oct 2010 @ 8:36am
    
    Re: Re: Don't know what you guys are complaining about...
    Tom Lehrer would have had a field day with this.
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ac, 11 Oct 2010 @ 12:48pm

not to defend verizon but
if he went ahead and ran his overage up to 10 GB (5GB + 5GB over) that would cost him $250 in overage charges. So, $60(month) + $250(ovr) > $199. Sounds more like verizon is missing an opportunity to get more customers with a plan between 5GB and 10GB per month.
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Aaron Klein, 11 Oct 2010 @ 3:31pm

Verizon Mi-Fi
Hi Mike,

Thanks for the link to my post about the mi-fi. I certainly was astounded when they suggested the 10GB / $199 plan.

Of course, we now know there's a better solution if you get Sprint coverage in your area. Virgin Mobile offers a mi-fi with UNLIMITED usage on the Sprint network for $40/month. As far as I've seen, that's unbeatable.

Thanks again and great post.

Aaron
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- Rikuo (profile), 11 Oct 2010 @ 11:54pm
  
  Re: Verizon Mi-Fi
  Are you sure its unlimited? Everyone knows by now that when an ISP says unlimited, its speaking from a different dictionary than the rest of us.
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Lawrence D'Oliveiro, 11 Oct 2010 @ 4:57pm

I Thought We Were Badly Off In NZ
I get 10GB/month for a similar monthly charge, but my excess is NZD2/GB, which is about one-third what Verizon is charging.
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Gabriel Tane (profile), 12 Oct 2010 @ 6:45am

Password
Um... am I the only one that found them asking for your password wierd? Whatever happened to "employees will never ask for your password"?

I have Verizon, but haven't bothered with the IM support (they can't get stuff straight over the phone, why would I want to hamper them further by removing voice inflection?), so I don't have a basis of what thier standard practice is, but it really seems odd to me. Anyone else?
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- Woadan, 12 Oct 2010 @ 12:38pm
  
  Re: Password
  The account rep asked for an "billing password", not an account password. Why they used that term I don't know. It's supposed to be a PIN, and it is indeed a 4-digit code that the primary account holder can set up when he opens his/her account with Verizon. if not, it defaults to the last 4 of the SSAN of the primary account holder.
  
  Please, let's not conflate the activity here to something it isn't. It clearly says "billing password".
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  - Gabriel Tane (profile), 13 Oct 2010 @ 6:16am
    
    Re: Re: Password
    It "clearly says 'billing password'", but you yourself said you weren't sure why they used that term. So, as a past VZ employee (unless there's a second Woadan here), you found it odd that they asked for a 'password'. Which is my point. The fact that it's a PIN makes much more sense. It may be semantics, but it's what lead to my concern. Overall, I wasn't accusing some evil VZ employee of a plot to take over this guy's account. I just found it odd and wanted to see if anyone else agreed. No need to condescend.
    
    And, by the way, not be a grammar nazi... but I think you misused 'conflate'. I wasn't bringing two different texts or ideas together into a whole. I was making a completely separate point. Cheers!
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Stephen, 12 Oct 2010 @ 10:41am

verizon
I rarely use my cell phone and mostly carry it just in case I have to let my daughter's aftercare program know my train is going to be late. It's on an ancient Verizon prepay plan: $.35 per minute during the week, then $.10 or $.15 at night and on weekends (it's tough to know because all I know is how many minutes I have left, but the minutes seem to triple or double nights and weekends).

Online Verizon only offers a $30 prepaid card that expires after 60 days unless you buy another. But I discovered, after my wife stored $300+ on the phone over several years, that by calling Verizon I could get $100 card that lasted a year. It's perfect. I spend about $120 a year, so I'm gradually wearing down my stored costs.

Here's the thing: Boy, are they desperate to get me on one of their crappy new plans, the most basic of which is $40 a month for 450 minutes, then $.45 per minute over that cap. If I spend 450 minutes a year on the phone, I'd be surprised. Oh, and it's like $1-3 for the first minute, like I'm taking a taxi. Ridiculous.

Best part: I asked an operator, a nice lady from Texas, why I couldn't just be billed for the minutes I used each month the way I am for utilities. She laughed and said, "Oh my gosh, that would be wonderful!" But "wonderful" is not in Verizon's business plan.

And this I hate: you can't get through the Verizon phone tree to actually buy a card. There's simply no option. Everything ultimately leads you to a plan or a request to input how much money you want to put on your phone (but no indication how long Verizon will let it last). To get an actual person, you have to call a technical services person and beg them to transfer you.

Only in America could such a crappy country not only exist but thrive. Well, maybe it could exist in Nigeria too.

Until cell phones and the internet are made utilities, America will fall farther and farther behind the world.
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Woadan, 12 Oct 2010 @ 11:39am

When I worked for Verizon, we once offered a "business" DSL plan for $60/month. At the time, residential/home DSL was $40 month. The residential plan came with up to 3 additional mailboxes with up to 10MB of storage *. (Yes, the number of additional mailboxes later expanded, and eventually got to 9.) The business account got up to 5 additional mailboxes with up to 20MB of storage *. That was the only difference in the two plans. 2 mailboxes and mail storage size. So for $20 more a month, "business" DSL customers got 2 more mailboxes, and more storage, equal to about 70 MB of storage *. No priority to the business customers on the network, no traffic shaping, nothing. just more mailboxes and storage within them!

*Of course, every week during a system maintenance run, anything older than 60 days would get deleted.
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Christopher (profile), 12 Oct 2010 @ 1:30pm

Yet another time when the FCC needs to step in.... but I doubt that they will, considering that they are in the pocket of these big name companies and allow them to do numerous things that we Americans would say are wrong.
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Dan, 12 Oct 2010 @ 1:54pm

Ridiculous!!
Wow, they sure are going at it in the long run! They don't get it do they? Outrageous!!
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- Dan, 12 Oct 2010 @ 1:58pm
  
  Re: Ridiculous!!
  You are definetly right! Isn't it cool that we have the same name?? I also am doing a 'current event' in Math Class, and we have to do a 2-3 paragraph summary, how it relates to decimals, and the website that we got it from. Any Ideas???!!???
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Crystal, 12 Oct 2010 @ 2:43pm

Really? Are these people crazy?? They have to be ashamed b/c they didn't admit that they came up with this foolish plan!!! :):):):):):)(:P:):):):):P:P:P:P:P:P:P:P:P:P:P:P - Smiley Face w/ tongue sticking out!! Catch y'all later!! Peace!
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nfxjghjs5yjj, 12 Oct 2010 @ 2:45pm

the time on here is totally wrong!! I posted at 5:44 not 2:43!!! Fudge to this website!
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- Brendan (profile), 13 Oct 2010 @ 8:43am
  
  Re: time zones
  The time is always stamped in PST (where TechDirt is), regardless of where you are. You'll notice articles and comments are posted "3 hours ago" if you're on EST/EDT.
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