Verizon: More Bandwidth Coming, But Consumers Will Pay

Get ready for some form of tiered broadband pricing. There is certainly nothing wrong with paying for what you use as a concept. But the problem that broadband providers have is backing away from phrases like “unlimited” that they used to use to attract customers.

In a Wall St. Journal article touting Verizon’s 4G service that is supposed to roll out next year, Verizon’s CTO Anthony Melone is quoted as saying that plans that offer “as much data as you can consume is the big issue that has to change.”

I don’t know about you, but in my view there seems to be some sort of major disconnect going on these days that should leave consumers more than slightly confused.

On the surface it is a no brainer. “Mobile, mobile everywhere” is the cry and everyone, especially the folks who own the pipes want a piece of that action. Nothing wrong with that. But here is where I see the disconnect. Content providers and device manufacturers are either creating at a speed that have consumers jumping on board so quickly that they are outstripping available bandwidth, or the bandwidth providers just can’t find a sweet spot to charge us without crippling both their current networks or the investment needed to enhance them further. Simply put, I think they’ve been caught playing catch up.

Two examples come to mind. One growing trend is online backup services. The mantra of “always backup” is now being extended to “always backup locally and online.” But when you think about backing up all of your data, you’re looking at a pretty good chunk of data traveling through somebody’s pipes, at least on the first backup. (In my case that would be about 25GB or so.) So, assuming there is some sort of tiered pricing for bandwidth usage or some sort of cap, there’s either a hidden cost for these services going to hit consumers, or it will become a tougher sell for companies that are in that business.

The other example is streaming media. Everyone wants streaming video and wants that video in HD. That consumes a lot of bandwidth no matter how the content is compressed. It’s almost like trying to sell someone a souped up sports car but only allowing them to test drive it on a bumpy single lane. The potential is there, but there are choke points ahead.

The Feds are working to free up bandwidth, but we all know that will take awhile even if it is effective. As well all head further down the road to “mobile, mobile everywhere” it is probably a good thing to keep in the back of our minds that we’ll see a few toll gates along the way.