Verizon caps usage, but video is the culprit in network slowdown

Verizon in particular in the US is seen as being between a rock and hard place over unlimited data plans – unable to keep speeds on the upward spiral when it offers unlimited data plans – but unable to sign new customers when it doesn’t.

In Q1 this year Verizon lost 307,000 mobile customers, until it embraced the unlimited plans which were allowing Sprint to make a comeback, and which allowed T-Mobile to be the cellular net adds leader for 12 straight quarters. Then its customer numbers turned upwards again as Verizon added 614,000 phone customer in Q2, but already it is uncomfortable with the strategy and is looking to adjust it.

Over the past quarter phone commentators have been measuring the average speeds at both Verizon and AT&T noticed falls in those speeds as they adopted unlimited plans. Verizon fell from 16.9 Mbps to 14.9 Mbps, while AT&T fell from 13.9 Mbps to 12.9 Mbps during the past quarter.

Reports came in this week that suggests that Verizon is already on its second overhaul of the system already and it has now introduced three unlimited tiers and begun to cap video delivery speeds. US consumer papers Ars Technica and The Verge take the credit for being among the first to notice the changes.

Verizon will bring the changes in immediately. The new tiers are Go Unlimited, at $75 a month, Beyond Unlimited, at $85 a month and Business Unlimited, for enterprise customers. The original Unlimited plan was $80.

The cheaper of the new plans comes with restrictions and Go Unlimited customers can suffer reduced speeds whenever the operator feels like it, for instance when the network is congested. Video streaming is capped at 480p on phones; 720p on tablets.

Beyond Unlimited customers only get reduced speeds if the network is busy AND they’ve already used 22 GB of data in a billing cycle, but video streaming only falls to 720p on phones, 1080p on tablets. Clearly this is the culprit for slowing down Verizon’s network, because previously there were no caps on mobile video at all. Verizon has issued no announcement yet, just added these plans on its site. So instead T-Mobile CEO John Legere announced it for Verizon in a tweet suggesting that this was a sign the Verizon’s network was crumbling under the strain.