System congestion was understandably a concern for service providers. Over time, two things happened. Equipment costs and access charges went down and, more importantly, usage patterns were modeled statistically to allow providers to predict peak usage requirements. Once that happened, flat-rate pricing eventually became the norm.
Major wireless service providers are even more paranoid about flat-rate pricing. To this day, it's relatively tough to find a flat-rate wireless plan, even for voice service. Instead, you sign up for a plan that gives you thousands of minutes per month, which for me at least, ends up translating into flat-rate pricing. I can't remember the last time I exceeded my monthly quota, though I still, perhaps out of habit, check my usage allotment as I get close to mid-month, when the meter resets to zero.
It's no surprise that these same wireless voice providers approach the delivery of data services from the same perspective. No flat-rate pricing has been the mantra of all the big players ever since they began adding data services to their networks. When 2.5G services began to appear in the market last year, that position was reaffirmed.
But last week, Verizon took the big plunge, announcing a $100, monthly flat-rate pricing plan for its 1X Express Network, a 2.5G system built around Qualcomm's CDMA technology that delivers 40- to 60-Kbps performance. That's far from inexpensive, but I'm willing to bet that it will increase adoption rates with corporate customers. Prior to introducing flat-rate pricing, Verizon charged by the byte, a strategy that never has had much appeal for data network services. Verizon -- and its competitors -- offers an array of complex pricing plans that appear to be designed to discourage customers from signing up.
Now that Verizon has opened the door, it seems inevitable that its competitors will have to follow suit. That trend will eventually drive prices lower. But it causes significant headaches for the managers and engineers who need to scale the services. You think designing wireless data systems within buildings is tough? Try doing it in a metropolitan area where every new cell involves not only major capital spending but also political battles with local governmental authorities.
I'm still optimistic that wide-area wireless services will one day be both ubiquitous and affordable. But don't expect it tomorrow, or even next year. Verizon took a small step in the right direction; still, it's likely the start of a fairly long journey.
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Send your comments on this column to Dave Molta at dmolta@nwc.com.
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