According to a report published in ChannelPartnersOnline on June 20th, 2011, Verizon is officially moving to a usage-based billing model for new smartphone subscribers as of July.
ChannelPartners reports that Verizon Wireless plans to move to tiered pricing next month on its data plans for new smartphone customers. On smartphones, including Apple’s iPhone, Verizon Wireless offers an unlimited email and data plan for $29.99 per month. Tiered pricing is very common internationally, but U.S. mobile operators have been slow to move away from all-you-can-eat data plans.
To read the full article, click here.
Commentary: Our Take on This
We were not asked to comment, but if we were, we would agree that usage-based billing more accurately applies charges for services to those using the services. In fact, since April 2010, Internet Providers (ISPs, WISPs, etc.) that want to charge their customers by usage can implement NetEqualizer’s Quota API to track usage over a specified time period.
In addition, if an Internet provider wants to enforce usage levels, the NetEqualizer also supports the use of “rate limits” through its Hard Limits feature. Internet Providers can set inbound and outbound Hard Limits by individual IP, for a whole Class B or Class C subnet, or any legal subnet value 1-32.
We believe that usage-based billing, when broadly adopted, will level the playing field throughout the Internet service space, enabling smaller Internet providers to compete more effectively with larger carriers. Many Internet providers have to charge for usage levels, in order to keep their contention ratios manageable and to remain profitable. In the past, this has been disadvantageous in markets where larger providers have come in and charged flat fees to consumers. With the advent of usage-based billing in the cellular space, consumers will be more apt to expect to pay for usage for all their Internet services.
We will keep watching the developments in this area, and reporting our thoughts here. If you are a small Internet provider, what is your take on usage-based billing? Let us know in the comments section below.