Verizon: We'll Crack Down On Bandwidth Hogs

Those who use Verizon's unlimited mobile broadband service may be in for a nasty surprise: The company may begin charging high-bandwidth users extra fees, says a top Verizon exec. The service in question is Verizon's EvDO, which has average speeds of between 400-700 kilobits per second. The current cost is $60 per month with a two-year contract and Verizon voice plan.

Mobile users are beginning to share that bandwidth in the same way that home users share their broadband bandwidth using Wi-Fi. A whole generation of routers have been released that combine 3G and Wi-Fi. Plug your 3G card into the router, and it gives Internet access to any nearby Wi-Fi users.

Verizon is not amused, and it's not clear whether those routers violate the company's Terms of Service. The DSL Reports site,though, claims that within the past year Verizon has been sending out warning letters to customers that the company believes use too much bandwidth.

Yesterday, Verizon Wirelss made its first public statement about the issue, and it's pretty clear that the company will begin charging high-usage customers higher fees.

According to the IDG News service, Dick Lynch, executive vice president and chief technical officer for Verizon Wireless, told a press conference at the CTIA Wireless trade show, "I don't think you ought to assume that for the long term you're going to be able to pay the same amount as the... more casual user...the amount of usage that you demand from the network each month will in fact have to... drive the pricing structure."In other words, use more bandwidth, pay more cash.

Verizon is perfectly within its rights in doing this. But I'm not sure that the market will stand for it. After all, only a few years ago, home broadband providers tried to crack down on people who used Wi-Fi at home to share their Internet connection. They charged extra for those who wanted to share bandwidth, and even tried to ban the routers.

Today, they're practically begging people to use Wi-Fi to share bandwidth at home. Some offer below-cost routers to customers for just that purpose. They know that it's a way for them to gain new customers and keep existing ones happy.

Ultimately, the same thing will happen to Verizon. Increasingly, municipalities are being blanketed by free or low-cost Wi-Fi. WiMax is starting to get real. Verizon is about to face some stiff competition for mobile broadband, and charging its customers higher fees isn't the way to win.

So in the short term, Verizon may crack down on bandwidth hogs. But in the long run, they'll be begging them for their business.0