FCC likely to approve of wireless tiered pricing: analysts
Federal regulators aren’t expected to stand in the way as wireless service providers move away from flat rate Internet plans and moving toward tiered pricing schemes, according to analysts.
Verizon Communications CEO Ivan Seidenberg said the nation’s largest wireless service provider will introduce pay-as-you-eat Internet data plans in coming months, joining AT&T and Cricket who have also moved toward tiered pricing schemes.
The Federal Communications Commission, which once looked at such price models with a skeptical eye, has recently signaled it would approve of those price packages. FCC Chairman Julius Genachowski recently said in seeking comments about his net neutrality proposal that tiered pricing plans could help alleviate data congestion on networks.
That would be boon for wireless operators, analysts said.
“Wireless cable operators for years have wanted to generate more revenue from broadband service through tiered pricing but delayed doing so due to potential FCC concerns,” said Paul Gallant, a communications and media analyst at Concept Capital.
As reported last January, Verizon Wireless chief technology officer Dick Lynch told Post Tech that the company planned to offer tiered pricing of its wireless services for fourth generation mobile broadband. Seidenberg said last week at an investor conference that tiered pricing was coming to wireless users the next four to six months, according to The Wall Street Journal.
The idea of tiered pricing had sparked debate among telecom policy observers.
Some public advocacy groups warned that users would access the Web less and the tech industry would be worse for it. But some consumers like the idea of paying for what they actually used, saying they didn’t want to pay flat-rate fees that subsidized the heaviest users.
Gallant predicted that the FCC would apply the same reasoning for tiered pricing on wireless networks to cable and broadband fixed-wired service providers such as Verizon’s FiOs. But public interest groups warn that charging too much for data would deter users from viewing video over the Internet. That could be a scheme, they say, to keep consumers strapped to their cable and satellite television subscriptions.
| September 27, 2010; 2:55 PM ET
Categories: AT&T, Broadband, FCC, Mobile, Net Neutrality, Sprint Nextel, T-Mobile, Verizon
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