Alec Saunders SquawkBox

The rumours flying over the weekend that Verizon would introduce unlimited plans today were true.  In the name of "simplification", they've introduced a number of tiers of unlimited voice and data plans.  The tiers look like this:

The two lower price tiers charge $1.99/Mb for data.  Otherwise data is included.  And there's a small discount for families signing up for multiple lines.

Note that none of these plans include unlimited data. The data provided can only be used for the purpose described. The fine print on the Verizon contract reads: The Data Plans and Features MAY NOT be used for any other purpose. Examples of prohibited uses include, without limitation, the following: (i) continuous uploading, downloading or streaming of audio or video programming or games; (ii) server devices or host computer applications, including, but not limited to, Web camera posts or broadcasts, automatic data feeds, automated machine-to-machine connections or peer-to-peer (P2P) file sharing; or (iii) as a substitute or backup for private lines or dedicated data connections. This means, by way of example only, that checking email, surfing the Internet, downloading legally acquired songs, and/or visiting corporate intranets is permitted, but downloading movies using P2P file sharing services and/or redirecting television signals for viewing on laptops is prohibited. A person engaged in prohibited uses, continuously for one hour, could typically use 100 to 200 MBs, or, if engaged in prohibited uses for 10 hours a day, 7 days a week, could use more than 5 GBs in a month.

Does this change the game?  It's a step forward in that the meter is now turned off. It's certainly a lot less confusing than plans which require you to designate the five callers you speak with the most often, or offer unlimited calling between customers of the same network. 

People will probably trade up to more expensive plans to simply have the peace of mind that they will never see another overage charge.  This is going to generate enormous short term profits for Verizon as nervous customers switch from bucket minute plans to unlimited plans.  Over the long term, as other carriers copy these plans, prices will fall.  Moreover, expect them to fall faster than previously simply because this simplification will enable easier comparison shopping for consumers.  In addition, expect an acceleration of the trend to abandon the land line.  There's simply no need to have one anymore once you have one of these plans.  

My sense is that this is a game changer.  Expect the other wireless carriers to follow suit.  It's probably the final nail in Vonage's coffin as well.