Verizon Tries To 'Debunk' News Reports Pointing Out Its New Wireless Plans Stink

from the tomato,-tomahto dept

Wed, Jul 13th 2016 6:41am — Karl Bode

Last week, we noted how Verizon had unveiled some new wireless data plans intended to be a competitive response to T-Mobile. In very Verizon-esque fashion, the new plans involved first and foremost raising already-industry high data prices another 17%, then scolding media outlets that called it a rate hike. The new plans also involved taking a number of ideas T-Mobile and other carriers had implemented years ago, then somehow making them worse.

For example, Verizon belatedly introduced a "Carryover" rollover data option. Under most implementations of this idea (as with T-Mobile), you're allowed to take any unused data at the end of the month and store it in the bank for future use. But under Verizon's implementation, this data only lasts one month -- and you have to burn through your existing allotment of data before it can even be used. This is Verizon's attempt to give the illusion of offering an innovative and competing service, but saddling it with caveats to make it incredibly less useful.

Not happy when the media quite correctly pointed out that its new data plans weren't much to write home about, Verizon issued a second, amusing press release clarifying the "myth v. reality" of what Verizon's offering versus what the media reported. As its opening salvo, Verizon repeats its claim that a 17% rate hike isn't a rate hike if you squint and look at the numbers in just the right way:

Myth: Verizon is raising prices with its new plans.

Reality: The price per GB is lower, across the board. The price went from $30 to $17.50 per GB on the S size plan and from $5.56 to $4.58 on XXL.

This is, of course, not unlike the cable industry trying to claim you're not really paying too much for cable because you're now getting more amazing value per channel. In reality, usage caps are already arbitrary constructs with no ties to real-world costs, and Verizon's entire plan structure is carefully built to drive as many customers to the most expensive data plans. Plans they may not need, but sign up for simply because they have no idea what a megabyte even is, and want to avoid any risk of absurd $15 per gigabyte overage fees.

More amusing perhaps is Verizon's attempt to claim that the Carryover data plan outlined above isn't just copying a relatively good idea and making it worse (and charging more), it's Verizon's incredible delivery of "the entire package" and an "incredible value":

Myth: Verizon is copying the competition with introducing Carryover and Safety Mode; Verizon’s competitors offer the same type of plans, but for less money.

Reality: No other wireless company can offer the entire package. We bring together options customers tell us they want, in a new plan with incredible value - and a new My Verizon app that puts you in control - all on the best network.

Verizon's modus operandi in response to heightened competition from T-Mobile has been to pretend that the company's network is just so good, it doesn't have to compete on price. In fact, as T-Mobile has applied more and more pressure, Verizon has gone so far as to claim that "price sensitive" customers don't matter. But that's not how real competition works. You don't get to magically choose when you have to compete on price, though with a generation of being a government-pampered duopoly under its belt, Verizon executives clearly believe otherwise.

Verizon's tactic of charging "premium pricing for a premium service" worked for a while, but as T-Mobile's network improves and the company has started hoovering up the sector's valuable postpaid subscribers, Verizon's been forced to take more serious notice. So far Verizon's response has been to try and pantomime competition, assuming that consumers and the media are too stupid to notice the difference. Verizon slowly but surely learning that you don't get to head fake real competitive pressure should prove interesting to watch.

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.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: competition, mobile, prices
Companies: verizon

46 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Vidiot (profile), 13 Jul 2016 @ 5:04am

Service with a smile
"We bring together options customers tell us they want..."

Me: "I want a bigger bill every month. Can you do that for me?"

VZ: "Sure!"

Me: "I'd like my rollovers to be totally useless, too."

VZ: "Can do! After all, the customer is always right..."
[ link to this | view in thread ]
aerinai (profile), 13 Jul 2016 @ 6:02am

Verizon's Reality: The price per GB is lower, across the board. The price went from $30 to $17.50 per GB on the S size plan and from $5.56 to $4.58 on XXL.

Actual Reality: Comcast has a 1TB cap for $70... or $0.07 a GB.... or if you consider their 300GB cap... that would be $0.23...

A 20-60x premium on data for the same backhaul infrastructure seems a little bit like fleecing any way you look at it... though slighty better than the $0.10 for 3kb they used to charge for a text message...
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 6:51am

Myth: Verizon hates its customers.

Reality: Verizon knows its customers are a bunch of sheep who aren't going anywhere no matter how poorly we treat you.
[ link to this | view in thread ]
Pixelation, 13 Jul 2016 @ 6:51am

This is...
the death throes of the Unlimited bill. The only thing they offer that fits anyone else's definition of the word.
[ link to this | view in thread ]
David, 13 Jul 2016 @ 7:00am

Don't let yourself be screwed by other companies!
Verizon offers the finest selection of lubes right up your alley. Did I say lubes? Silly me. I mean tubes, of course.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 7:04am

Verizon's service for me is basically 1 bar at home and at work and then no service for 40 minutes in-between.

The only reason I'm still with them right now is because I have a grandfathered unlimited plan which I plan to hold on to until I die.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 7:05am

> Verizon slowly but surely learning that you don't get to head fake real competitive pressure should prove interesting to watch.

Could you take this sentence out behind the barn and strangle it? Or disassemble it and make two or three other correctly formed sentences?
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 7:19am

in a new plan with incredible value

For verizon that is.
[ link to this | view in thread ]
Michael, 13 Jul 2016 @ 7:20am

Re:
When someone holds up Comcast as a better deal, you know you have a problem...
[ link to this | view in thread ]
TRX (profile), 13 Jul 2016 @ 7:37am

Verizon: in the two years we had them, so far #1 for:

A) dropped calls
B) s m ch p ck t l ss c nv rs t n w s n nt ll g bl
C) dropped ca...
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 7:41am

Verizon should get Obi Wan Kenobi to be their spokesperson.

"Verizon has made great strides in improving the value it serves to its customers... from a certain point of view."
[ link to this | view in thread ]
Michael, 13 Jul 2016 @ 7:46am

Re:
"This isn't the billing line item you are looking for"
[ link to this | view in thread ]
David, 13 Jul 2016 @ 7:50am

Re:
Why didn't you say so? This can be arranged.
[ link to this | view in thread ]
Jeffrey Nonken (profile), 13 Jul 2016 @ 7:53am

Cargo Cult innovation: copying the form without the substance.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 7:53am

Man I can't wait... 2 more months and I'm out of my Verizon contract. I already have a Google Fi Nexus 5X phone. $30 a month for a gig of data and phone service vs being raped by Verizon for about $75 a phone with 3 gigs of shared data with my wife's phone.
[ link to this | view in thread ]
I.T. Guy, 13 Jul 2016 @ 8:37am

Re:
Thank you. I thought it was me not having enough coffee.
[ link to this | view in thread ]
metalliqaz (profile), 13 Jul 2016 @ 9:21am

Can we get a more measured analysis please?
Let me start by saying that I'm no fan of Verizon. I think the best thing about them is that, hey, at least they aren't Comcast. I currently hold a grandfathered unlimited plan with Verizon. So, I love a good point-and-laugh article about one of their press releases, but this part got to me.

As its opening salvo, Verizon repeats its claim that a 17% rate hike isn't a rate hike if you squint and look at the numbers in just the right way:

Myth: Verizon is raising prices with its new plans.

Reality: The price per GB is lower, across the board. The price went from $30 to $17.50 per GB on the S size plan and from $5.56 to $4.58 on XXL.

This is, of course, not unlike the cable industry trying to claim you're not really paying too much for cable because you're now getting more amazing value per channel. In reality, usage caps are already arbitrary constructs with no ties to real-world costs, and Verizon's entire plan structure is carefully built to drive as many customers to the most expensive data plans. Plans they may not need, but sign up for simply because they have no idea what a megabyte even is, and want to avoid any risk of absurd $15 per gigabyte overage fees.

Can we at least acknowledge that the price per GB is being lowered? One of our main complaints is that they overcharge per GB, so they should at least get some credit for reducing that number. Otherwise we just seem biased.

Instead, I would focus on two things. First that the price of entry has increased. Second that Verizon doesn't value every GB equally.

They need to called out on the fact they they are trying to make Internet access a premium product. Between higher costs for entry level plans and zero-rating of their own content they are expressing that access to independent, unfiltered information is not for the poor. I don't like that message one bit.

The second point is what strikes me the most. Verizon apparently values it's precious bandwith less if you're willing to write a bigger check. Why are we not calling them out for this? It undermines essentially every argument they make defending their pricing. Lower-tier plans which are more likely to get overage charges are more expensive per GB. Higher-tier plans which you might expect to be used more are less expensive per GB. It's completely backwards and suggests a cynical focus on forcing the customer to trade off overage charge fees vs unused pre-paid data.

A deeper dive into why we are so critical would be better than just harping on the fact that the new number is bigger than the old number.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 9:45am

Re: Can we get a more measured analysis please?
Can we at least acknowledge that the price per GB is being lowered?

No, because Verizon doesn't charge per GB. If you don't use all that data allowance then your cost has increased for no benefit.

While we are on the subject of benefits, T-Mobile has pulled an interesting one on me. My plan allows for rollover of data, except that temporarily, T-Mobile generously increased my data allowance to unlimited (real unlimited, not unlimited if you want slow data). However, now, instead of accruing rollover data, it accrues nothing.

So the benefit to me of the "unlimited data" is that I don't accrue any rollover.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 10:20am

Re: Re: Can we get a more measured analysis please?
So you're hoping that when you go back to limited the amount of rollover applied is (infinity) - (the amount you used that month)?
[ link to this | view in thread ]
Michael, 13 Jul 2016 @ 10:25am

Re:
I'm pretty sure that plan is good for another 70 years after you die.
[ link to this | view in thread ]
streetlight (profile), 13 Jul 2016 @ 10:30am

A better measure of price per Gigabyte
It seems to me the cost per Gigabyte should be the amount one pays for data during the billing period divided by the number of Gigabytes used. If you have a 5 Gigabyte/(billing period) plan costing $17.50 per GB, your data bill is $87.50. But if you only use 3.5 GB, your cost per Gigabyte is $25.00.

I'm using Google's Project Fi and I pay $10 per GB of cell data and if I use less than any multiple of a GB I get reimbursed for the unused cell data on my next bill at $0.01 per Mega Byte. There are cheaper plans than Fi if more than 2.5 GB use per month through other MVNOs, but for low cell data users, Project Fi might be a good choice.
[ link to this | view in thread ]
PRMan (profile), 13 Jul 2016 @ 10:40am

Re:
I have an unlimited plan too.

It's called a 3GB T-Mobile plan with Music Freedom and Binge On. Good luck going over when nothing counts. I haven't come close.

$30 a month.
[ link to this | view in thread ]
Hephaestus (profile), 13 Jul 2016 @ 10:46am

Re: Re:
That would be the copyright on the contract he signed, not the plan. The plan calls for his remaining heirs to continue paying for 70 years after he passes ...

hope that clarifies things ;-)
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 10:54am

Re:
Aren't the Comcast prices you quote for home internet while the Verizon prices are for wireless data? I know they are both prices for connectivity/data but there is a difference between the services.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 11:00am

how dare you point at the emperor’s butt cheeks and giggle.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 12:24pm

It's not a rate 'hike', a hike would be a small jaunt maybe across some pleasantly rolling hills.

THIS is strapping your prices to a DragonX rocket and blasting it towards the moon!
[ link to this | view in thread ]
That One Guy (profile), 13 Jul 2016 @ 1:05pm

Re:
Reality: Verizon knows its customers have no other option more often than not who aren't going anywhere no matter how poorly we treat you.
[ link to this | view in thread ]
Chuck, 13 Jul 2016 @ 1:45pm

Re:
What good is an unlimited plan if you're not able to use it? That's the reason I gave up on Sprint. I basically never had 4g reception and 3g was slow as hell. It just wasn't worth it.
[ link to this | view in thread ]
Chuck, 13 Jul 2016 @ 1:52pm

Re: Re:
I'm on t-mobile with a 6GB plan but it might as well be unlimited. I used 23GB of 4G last month and still managed to add .5GB to my rollover.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 2:08pm

Verizon's modus operandi in response to heightened competition from T-Mobile has been to pretend that the company's network is just so good, it doesn't have to compete on price... But that's not how real competition works.You don't get to magically choose when you have to compete on price...

Just a consideration here, but this statement is pretty much wrong. If that were true, then Mercedes Benz and Rolls Royce would be having some serious problems existing. Not to mention Gucci, Kitcho in Japan, even Apple fell into this category.

The reality is that if your product is better than everyone else's (or at least perceived to be), then you don't need to compete on price. Rolls Royce is just so good that they don't need to compete with Honda's price. Gucci is just so good that they don't need to compete with Forever21 prices. Apple used to be just so good that they didn't need to compete with Samsung's prices. Kitcho is just so good that they don't need to compete with any price at all.

You can (very easily) argue that Verizon's network isn't better than everyone else's and therefore they should have to compete on price. I would agree with that. But the argument "my product is just so good that I don't need to compete on price" is perfectly valid.
[ link to this | view in thread ]
techturf (profile), 13 Jul 2016 @ 3:11pm

Re:
So you're going from a $25/gB plan to a $30/gB plan?
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 5:09pm

Most folks won't see the light of day until the showers turn on, and then it will be to late. Until that time cover your ass and hang on.
[ link to this | view in thread ]
Anonymous Coward, 13 Jul 2016 @ 10:22pm

Re: Re:
He has to pay $75 x 2 = $150 for that 3 GB of shared data. So he's going from $50/1GB to $30/1GB.
[ link to this | view in thread ]
Anonymous Coward, 14 Jul 2016 @ 8:10am

Re: Service with a smile
lol, that's exactly how it goes...you hit the nail on the head!
[ link to this | view in thread ]
Yeahizme (profile), 14 Jul 2016 @ 8:13am

Re:
verizon has raped a lot of people lol...so let's see, if the max sentence for a rape is 25 years, then verizon should have no problem receiving a life sentence of no shorter than 9,999,999,999,999,999,999,999,999,999,999,999,999 years with another 3.25 billion years to serve after that lol
[ link to this | view in thread ]
Chuck, 14 Jul 2016 @ 8:14am

Poor Paul
So in other words, Paul didn't switch from Verizon to Sprint because he actually likes Sprint (because seriously nobody genuinely likes ANY of these companies).

Nonono, he did it because Verizon cost so much he was actually losing money being both a customer and spokesperson at the same time.

Actually makes a lot of sense.
[ link to this | view in thread ]
Tim, 14 Jul 2016 @ 4:18pm

Re:
I'm also still on the grandfathered unlimited data plan. How much data do you use on average each month? I find that I use only between 600MB and 3GB, I only keep the unlimited plan because I like the "idea" of having unlimited data even though I don't actually use it! : )
[ link to this | view in thread ]
Tony, 15 Jul 2016 @ 4:40am

Re:
You realize if you do that math considering you have 3 gb and your wife's phone that price is going to basically even out right?
[ link to this | view in thread ]
Tony, 15 Jul 2016 @ 4:42am

Re: Can we get a more measured analysis please?
Right, but it's the same as with anything, you get discounted rates for adding more that's just how business works
[ link to this | view in thread ]
Stewart Taylor, 26 Aug 2016 @ 10:22am

I agree
I agree, Verizon's rollover data plans are garbage and a massive scam. You don't get to use your left over data the next month. Instead they hide from you so that it will expire before you get to use it. I'm stuck with them another year and a half unfortunately but I will be looking at another carrier as soon as my time is up. It's a miserable little cellphone company and I wish they would just fold up an go out of business. This would allow REAL data plan innovation to take place with real cellular carriers.
[ link to this | view in thread ]
Stewart, 26 Aug 2016 @ 10:27am

Re:
This is very true...It's just like Walmart...There will be customers in those stores no matter how poor the customer service is. People just lower there standards after a while. People forget that Verizon and Walmart are our employees...they work for us the customer. But they are banking on the fact that people can't get together in one voice and do something about it. I will be willing to bet 100.00 that if about 1000 customers walked into a Verizon store and terminated there service, Verizon would (our employee) would give us what we wanted and that's a REAL rollover data plan.
[ link to this | view in thread ]
Stego, 26 Aug 2016 @ 10:31am

T-Mobile
T-Mobile will eventually put Verizon and ATT out of business in a few years. Let's just hope they still remain the cool company they are.
[ link to this | view in thread ]
John, 26 Aug 2016 @ 12:52pm

Verizon Carryover Data
It is a scam. It is only carry over ever other month. It would be a true carry over plan, if they used your carry over data 1st. Well I make sure my kids use it all up every other month. LOL Just another example of a big company scamming its customers into paying more for an illusion. Shame on you a Verizon.
[ link to this | view in thread ]
Jon, 12 Jan 2017 @ 7:44am

?
Whaaaaat!?
[ link to this | view in thread ]
That kid, 12 Jan 2017 @ 7:51am

Waiting for the right opportunity
I don't think Verizon cares about all these comments because we complain and complain but they're still getting our money. We're still with them. We don't leave. HOWEVER.... what they fail to realize is that people will only take so much crap!... and many of us are waiting for the right opportunity to make the change. One of the other carriers will soon make an offer that will be soo good that we finally get to say f_ck you verizon. And that day is coming. I laughed when the "can you hear me now" guy was on a commercial for sprint!!! What a kick in the nards lmao. He made the switch, and others will follow.
[ link to this | view in thread ]
Oscar, 9 Jul 2017 @ 8:20pm

I work at Verizon in Bakersfield and can tell you we do rip people off. Verizon is the devil!
[ link to this | view in thread ]