The Burning Question

Verizon Wireless this weekend confirmed to PhoneNews.com one of the most burning questions that many tech-focused users have wanted to know, since Verizon launched the LTE network.

And, that’s if their unlimited, grandfathered smartphone data plans are at risk, if customers move use their LTE SIM card in something other than a smartphone.

For those that don’t know, the SIM card is the little card inside most phones out there. It contains your subscriber access information, primarily your cell phone account number. Verizon recently began using SIM cards with the launch of its 4G LTE network. Carriers typically prefer customers not tinkering with the cards themselves though, leaving that task typically to the controlling hands of your local wireless store.

It has been no secret in the tinkering forums on the web, that you can drop an LTE SIM card from Verizon Wireless into devices other than smartphones. Users have pulled off SIM card swaps on devices like the Novatel MiFi and Samsung Galaxy Tab 10.1, and have achieved impressive results.

Unlike smartphones, which Verizon grandfathered in unlimited data plans, all hotspot and tablet plans for 4G LTE service on Verizon Wireless have been metered.

Metered, and costly. With data plans as much as $80 per month, it would actually be cheaper to scuttle a grandfathered voice plan, and use the smartphone plan’s unlimited data feature. Hence, why people have been wondering if they can pull it off.

AT&T Causes Concern

Of course, we at PhoneNews.com weren’t going to tell everyone to go and do something like this right away. History would show those that have, in the past, got burned.

AT&T has taken actions ranging from dropping people’s grandfathered data plans (and refusing to restore them), to cutting off data service entirely. Worse, some users report dropping their SIM card into non-AT&T Smartphones (such as unlocked Symbian devices from Nokia), and getting the same treatment.

This put us in a bit of a bind, since 4G LTE launched on Verizon. Even staffers at PhoneNews.com that had coveted grandfathered data plans on Verizon were unwilling to test the waters, for fear of waking up one morning and finding that unlimited data plan, replaced with a 2 GB data plan.

The FCC comes to the rescue…

As we noted in our precursor article on the new LTE iPad’s capability to use Smartphone SIM cards, Verizon (and following suit, AT&T), both agreed to a term in the FCC’s auctioning of new (C-Block) 700 MHz spectrum. Both carriers were interested in the spectrum, specifically for use on LTE deployments. And the FCC knew it.

Essentially, at the request of the public, and companies like Google, the FCC imposed rules that require 700 MHz license holders to not retaliate against subscriber device changes, of any kind. You get to keep the same plan, regardless of what kind of device it sits in.

The plight to get an answer…

We have tried for months to get Verizon to tackle this one. Seriously, it wasn’t an easy task. And we have no hard feelings with Verizon Wireless for not wanting to answer this question. We don’t like that the feds imposed these terms, either. We were hoping for market competition to achieve that.

Unfortunately, T-Mobile instead chose more onerous throttling terms, followed by AT&T. This leaves only Sprint, and grandfathered Verizon LTE customers, with truly unlimited data.

After several communications with Verizon’s press team, they did give us a truly straight-up answer… and here it is:

The SIM holds the detail of your data plan. If you move it to another device, you will be charged for the service you use. If you have an unlimited SIM and it fits another device, you can use it and you will pay for the service plan associated with the SIM.

Even we were surprised by the clarity of Verizon’s confirmation. This means Verizon is well aware that they cannot touch your grandfathered smartphone data plan, just because you chose to move it to a LTE MiFi or LTE iPad (which also acts as a portable hotspot).

SIM vs micro-SIM

Verizon Wireless did also ask us to remind customers that in order to use a micro-SIM device, you may need a micro-SIM. Many in the Internet community have found that GSM micro-SIM cutters (hailed in with iPhone 4 and iPad) also work with Verizon’s LTE SIM cards. Of course, Verizon Wireless would prefer you go to a store and have your SIM card swapped out for a micro-SIM if you need to do a replacement. It’s free of charge, too.

Examples show the potential…

Let’s say a family has four lines of service. The three additional lines have a $20 add-a-line fee, and the customer pays for $29.99 grandfathered unlimited data on each. That’s a total of $50 per shared line of service.

Verizon Wireless asks for $50 for 5 GB of metered 4G LTE data. If you use more than 5 GB of data per month, it’s cheaper to forward your calls to a prepaid phone, and pop the SIM card into an iPad or Novatel MiFi.

Even more obvious is that customers paying for that problematic mobile hotspot data add-on, an additional $30 per month, don’t seem to need to anymore. The plan was only offered to folks that specifically had a grandfathered data plan on an LTE smartphone… but seriously, why bother? At a savings of $360 per year, dropping that feature will pay for the cost of an LTE iPad on Verizon within a two-year contract cycle.

And, both the MiFi and iPad device provide the exact same features, albeit at the cost of convergence.

With voice-only plans at bargain prices, offerings like Page Plus Cellular will let you recycle your older Verizon 3G smartphone as a great voice-only device, and let your Smartphone SIM live on inside that iPad. Meanwhile, call forwarding will help you transition to your new number.

One really important note… You cannot keep your grandfathered data plan on Verizon and port your number to another provider. Like your number, your grandfathered data plan will go away from Verizon.

Throttling is the future, sadly

We are already aware of impending plans to throttle LTE data on Verizon Wireless. Hence, we’re not letting the cat out of the bag by telling folks this. Even if massive numbers of customers started using their Smartphone SIMs as MiFi dedicated Internet connections, the days of several-hundred-gigabyte data sessions on Verizon Wireless (and Sprint, too) are numbered.

The timing centers around shared data plans, and their rollout. Verizon is not going to scorn loyal customers like AT&T did. Instead, data plans on Verizon will have pooled throttling limits. For example, if Verizon imposes a 5 GB throttling limit, similar to AT&T’s revised limits, it will likely be account wide. Continuing the example, if you have four lines of service, the entire family will enjoy 20 GB of unthrottled LTE data per month. This will dramatically reduce the number of throttling events, while keeping Quality of Service and customer satisfaction high.

Conclusions, inveitable fallout

Some will love us for writing this… especially those who have been paying Verizon money all these years, and have those grandfathered plans. Some at Verizon Wireless may be running for the aspirin. And some that have known about this technique for awhile will be a bit ticked we’re sharing it with everyone.

But, we’re here to inform, and answer people’s burning questions. A ton of people have asked us to get to the bottom of this one, and that’s what we did. Keeping the carriers honest is one of our most important duties at PhoneNews.com.

We look forward to seeing market competition push up the levels of throttling and data caps, so that stories like these will be read years down the road as 21st Century relics of an era where data offerings didn’t meet consumer demand.

Because, seriously… if you pay for Internet on your PC at home, you wouldn’t expect to pay extra to use your iPod touch over Wi-Fi. The fact that carriers want to charge so much for tablet data, Sony PlayStation Vita data, and eventually watch phone data… and not even offer to bundle these services… simply underscores the lengths people will go to in order to enforce their grandfathering rights/privileges.