Michigan Telephone, VoIP and Broadband blog

Following up on the earlier report of Verizon’s announcement, some folks might think that we should know not to expect too much from a big telephone company. Karl, in an article at BroadbandReports.com noted the following:

Silicon Alley Insider’s Dan Frommer was one of only a few writers who seemed to get what this announcement was really about — the injection of a per-byte billing model into consumer consciousness:

Some people think this will open the door to devices running new services, like free Internet phone service or video calling. But Verizon (VZ) has no intention of turning itself into dumb pipe. You can expect service plans for non-Verizon phones to include data-network fees based on usage — meaning those “free” calls could cost a bundle.

(Read the complete article)

And Erick Schonfeld, in an article on the TechCrunch web site, made this observation:

Verizon’s newfound openness when it comes to its wireless network is not all that open after all. As I reported yesterday, Verizon Wireless announced that it would allow “any device” and “any app” to operate on its existing network. But that is not exactly so.

By “any device” Verizon means you can bring any CDMA device to its network. Verizon has a CDMA network, so only CDMA phones will work on it—fair enough. It was always clear about that. But what exactly does it mean by “any app”? I dug a little deeper and asked Verizon whether any of the new apps developed for the bring-your-own devices would also be available to its existing customers who bought their phones through Verizon. The answer for now is, “No.” Although a spokesperson tells me that they are looking into it. Unless it figures that out, Verizon is not really building an open network. It is building a two-tiered network: One for its preferred customers who play by its rules (i.e., its current 64 million subscribers), and one for the rabble not satisfied with its choice of phones and apps.

That complete article is here.

Right now, of course, it’s all speculation to some degree – after all, this option probably won’t be available for about a year, and I suspect that at the moment nothing about the upcoming offering is cast in concrete.  Indeed, the press release itself may have been put out with the intent of gauging the reaction from both potential customers and competitors.  If the competitors react to the announcement by offering truly open networks, then Verizon will likely feel obligated to do the same.

One other thing I will point out is that nothing will kill an otherwise great service quicker than per-byte billing.  I have probably said it a thousand times in my life, but people just hate having meters running when they use a service – and in particular, they hate invisible meters.  What I mean by that is, any situation where you have to trust the company doing the metering to bill accurately, with virtually no way to verify that they are doing so.  Customers don’t mind electric and natural gas meters because those are attached to our homes, and if we ever suspect they are faulty, we can turn off the main circuit breaker or shut off the main gas valve and see if the meter is still registering anything.

With metered telephone service or broadband service (wired or wireless), we don’t have even that level of comfort.  If we don’t have flat-rate service, then we’re supposed to accept a bill from a company that would profit by inflating the usage a bit, and that (in most cases) has a bit of a reputation for not always dealing fairly with customers.  People have accepted metered billing when there is no other option available for a particular type of service (though not everyone does – some simply choose to do without the service) but quite often, the moment a company with a flat rate offering comes along, customers tell the company with the metered offering where they can shove it (unless the flat rate option is significantly higher in price than what they are currently paying for the metered service).

Verizon can choose to implement their offering in a manner that is truly customer-friendly, and win the loyalty of customers for perhaps decades to come.  Or they can try to impose hidden charges and limitations on service, so that customer expectations are dashed, and their customers start looking for another company to do business with.  Maybe Verizon has seen the light, and finally understands that Lily Tomlin’s old line (as Ernestine the operator), “We don’t care, we don’t have to – we’re the phone company!” is not the way to do business anymore.  They really need to care what their customers think about them, and if they understand that, they won’t try any funny stuff.  If they don’t understand that, it will be a public relations disaster.  Stay tuned and see what happens!