The impact of the last minute stampede by Verizon Wireless customers (new or otherwise) to lock in the company’s unlimited data plans before they were retired last week has reached Wall Street, but the ripples extend far beyond Verizon Wireless itself.

Macquarie USA analyst Kevin Smithen this morning downgraded AT&T stock to “neutral,” expressing concern about AT&T’s slowed growth in wireless revenues.

“We see increased headwinds to wireless revenue growth, limited improvement in enterprise and a lack of clarity on the status of the [pending acquisition of T-Mobile],” he writes. “We view projected organic revenue growth of 0.5% in 2012 as uninspiring. At current levels, we believe absolute and relative risk-reward to roughly balanced given these issues.”

Customers concerned about Internet Overcharging schemes being implemented by Verizon Wireless began fleeing other providers to “lock in” unlimited data service with Verizon before it was nigh.  One big victim of that was AT&T.

“We were waiting for the next iPhone to finally jump to Verizon, even if it meant paying a termination fee to AT&T, just to escape the dreadful service,” says Shai Lee, who was among several dozen readers contacting Stop the Cap! for assistance securing unlimited data plans with Big Red.  “When Verizon announced $30 for 2GB, there was no way we were going to be locked into paying that, so we jumped early.”

Many followed.

Smithen believes customers are also fleeing other carriers, especially T-Mobile, which he believes will lose two million customers before AT&T closes the deal or faces ultimate rejection for its merger by Washington regulators.

Some analysts believe T-Mobile customers are leaving over a combination of the company’s inherent weakness as a provider-now-in-limbo while others dread the reality of being ultimately stuck with AT&T.

“It’s like fleeing a country before the invading army reaches your town,” shares Samuel, a T-Mobile customer leaving for Verizon. “I won’t live under AT&T’s regime.”

Smithen sees even greater challenges for AT&T with the arrival of iPhone 5, which will either cost the company to subsidize or start another wave of AT&T emigration.

Verizon has already managed to secure 32 percent of the U.S. iPhone 4 market, according to a study by the mobile analytics company Localytics.  Since rumors about Verizon imminently ending unlimited data plans began in May of this year, Localytics has tracked a spike in Verizon iPhone purchases, one explained by existing customers upgrading to smartphones, and new customers arriving from other carriers.

For AT&T, customers on contract with smartphones are not adding additional services and those with data plans are trying to stay within plan limits, robbing AT&T of extra revenue.

Smithen says with this track record, average revenue per customer is “stalling.”

The Canadian Radio-television Telecommunications Commission is investigating Canadian ISP practices all week in a series of public hearings.

The Canadian Radio-television and Telecommunications Commission (CRTC) opened the first day of hearings on the practice of usage-based billing for Internet usage, advocated by the country’s largest wholesale provider of Internet bandwidth, Bell Canada.

These hearings are a follow-up to earlier ones that ultimately allowed Bell to mandate usage billing not only for its own customers, but for all independent ISPs that purchase bandwidth from the company.  Since the vast majority of independent providers purchase bandwidth from Bell, the CRTC ruling would have mandated the end of “unlimited use” Internet plans across the country.

Nearly a half-million Canadians disagreed with the CRTC ruling and created a political firestorm earlier this year, demanding that the government step in and overturn the CRTC ruling.  Bell temporarily withdrew the usage based billing mandate pending the outcome of hearings expected to run from today until early next week.

Appearing at today’s hearing, executives from Bell continued to defend usage-based pricing and plan pricing that forces consumers to guess at how much Internet usage they will need each month.

In more aggressive questioning than earlier hearings, CRTC chairman Konrad von Finckenstein questioned Internet pricing plans that do not “rollover” or rebate consumers for unused usage, but still penalizes customers for going over their plan limits.

von Finckenstein also questioned Bell’s pricing for independent ISPs, particularly penalty rates ISPs who underestimate their wholesale usage needs would face under Bell’s advocated pricing model.  The chairman seemed suspicious of the fact Bell does not charge its own ISP unit penalty rates, only independent providers.

The hearing will also explore why companies like Bell can deliver “unlimited viewing” on their Fibe TV IPTV service, but cannot deliver unlimited Internet access to end users.

Interested in following the hearings live? Visit the CRTC live stream hearing page.

[Updated 10:20am ET: Bell Canada executives just admitted in this morning’s hearings its Internet Overcharging scheme involving usage pricing many times higher than the actual cost of provisioning the service was driven by “competition” and not by “congestion” issues.  In other words, Canadian consumers are paying very high Internet pricing and overlimit fees because of the pervasive lack of competition, not because companies need the extra money to “upgrade their networks.”]

Toronto

Except for South Korea, nobody uses the Internet more than Canadians.  That’s an important finding in a new report produced for Canada’s telecommunications regulator to better understand the current state of the broadband market in the country.

According to recent reports from the Organization for Economic Cooperation and Development, the country generates 2,288 terabytes of data traffic per month per 100,000 residents.  That’s among the highest in the world and comes from avid web browsing, watching online video, and a love affair with smartphones.

But like many relationships, this one is also expensive.  You pay all of the money you have to spare, and your provider delivers you just enough of a usage fix to keep you from running to Ottawa to demand change.

Canadian broadband pricing is in the top third of all OECD-measured nations, with the average price for High Speed Internet running $55.18.  The average median price across all OECD members runs a lot less — $39.23 per month.  If you want to pay less, you have to bundle your landline, cell phone, television, and Internet service with the same provider, or make due with a slow speed “lite user” plan, where average pricing had been running lower until this year.

The average monthly price of the Level 1 basket increased to roughly $35 in 2011, up considerably from $31 the previous year.

Similarly, average monthly price of the Level 2 basket increased this year as well to roughly $50, up from $48 last year.  The average advertized download speed of the services included in the Level 2 basket is close to 6.5 Mbps, which is similar to the average speed in last year’s study.

The average monthly price of the Level 3 basket also increased slightly to $63, but still remains well below the 2008 price of $69 per month.  The average advertized download speed of the services included in the Level 3 basket is roughly 14 Mbps, which is slightly higher than in last year’s study (where the average speed was 12.5 Mbps).

Lastly, the average price of the new Level 4 broadband service basket is roughly $78 per month.  The advertized download speeds for the Level 4 broadband services included in the study range from 25 to 50 Mbps – the average is close to 30 Mbps.

Roughly half of the Canadian broadband service plans surveyed for this study included monthly usage caps.  For those that do, they range from 1 to 13 GB on the Level 1 service basket – the average is 7 GB per month.  The range for the Level 2 service basket is from 25 to 75 GB – the average is 55 GB per month.  The range for the Level 3 service basket is from 75 to 125 GB – the average is just over 90 GB per month.  There has been little change in these monthly usage caps, on average, compared to last year.

In the case of the new Level 4 broadband service basket, for those service providers applying data usage caps, the caps range from 75 to 250 GB per month – the average was close to 140 GB per month.

The Canadian pricing and usage study was developed by Wall Communications for the Canadian Radio-television and Telecommunications Commission.  The best news for Canada?  Your broadband pricing remains relatively stable, with some package pricing reducing the cost of the broadband component.  Standalone service appears to have increased in price only slightly in many markets.  Increased foreign investment in the wireless marketplace is shaking up wireless pricing, as the hegemony of Bell, Telus, Rogers, and Quebecor are under increasing competitive pressure.  It’s a much sunnier outlook than what is taking place in the country to your south.

For Americans, pricing is headed in only one direction: up.

All charts courtesy of Wall Communications, Inc.

A Verizon Wireless tweet from this morning welcoming customers to a new era of "wonderful usage based plans."

Verizon Wireless might be regretting having a Facebook page open for comments after users started excoriating the company yesterday, when it first publicly broached the subject of its now-implemented wireless Internet Overcharging scheme.

“The price is too damned high,” exclaimed one customer livid that new customers would pay $30 for just 2GB of data usage (one penny higher than the company’s now-retired unlimited use plan).  “$80 for 10GB?  And I thought AT&T was greedy,” commented another.

Judging from the countless hundreds of negative comments, Sprint is about to have a robust quarter of new customer additions defecting from Verizon.  Sprint retains its unlimited use plans on both its 3G and 4G networks, although the speeds do not compare favorably to Verizon’s LTE/4G network.

Matt Hamann summed up the sentiment of customers who despise usage caps, even if they are currently grandfathered on an unlimited use plan:

Hey, Verizon…I will *never* add another smartphone to my plan until you come up with fairer data prices. $30 for 2GB?? You gotta be kidding! How is this fair? How is it in your customer’s best interests?

Bottom line: IT ISN’T! It’s 90% corporate greed. What’s the best way to get more revenue from customers, huh?

Listen here: I’m already looking for better options. As soon as I find one, I’m gone. And I’ll take every family member and friend that I can along with me.

The best mobile provider you are no more.

Verizon created considerable confusion for their customers by saying nothing until just a day before the new plans took effect.  Although the media has covered the imminent end of unlimited data for over a week, customers have not been notified by Verizon itself, despite one customer’s claim Verizon told him they mailed letters in advance of the plan changes.

As we have reported, those customers with pre-existing unlimited data plans will be able to retain them indefinitely, even if they upgrade to a new phone in the future, and even if they renew their contract.  Only new customers, those changing plans or any new lines added to a family plan will face the “wonderful” tiered pricing Verizon tweeted about this morning.

To commemorate Verizon Wireless’ new mobile data prices, we present a clip from the leader of ‘The Rent is Too Damned High’ party.

Mobile Hotspot App from Verizon Wireless (Courtesy: Pocketnow.com)

Things got considerably more confusing over the mobile Hotspot feature — a tethering application built into most Verizon smartphones.

Verizon Wireless representatives were sharing conflicting information with Stop the Cap! about the availability and pricing of this feature as late as this morning, but we’re now confident we have an answer the company will commit to for impacted customers.

For 3G Verizon Wireless smartphones, nothing changes.  It was $20 a month for 2GB before July 7th, and remains the same going forward.  For LTE/4G phone owners, things are much more confusing.  Existing customers have been enjoying free tethering on a special promotion made available only to 4G customers for several months now.  That promotion officially ended this morning.  A software update is imminent for 4G phone owners which will remove the free Hotspot feature and replace it with a prompt for one of two options:

• a $20 for 2GB Hotspot plan
• $30 Hotspot plan with unlimited usage

Most would be foolish not to lock in unlimited tethering with the $30 plan, which is a much better deal going forward.  Where the confusion comes in is for customers rushing out to upgrade their existing phones to a 4G phone just to lock in unlimited data -and- unlimited Hotspot tethering.

We spoke yesterday afternoon to Verizon Wireless representatives who denied any knowledge of the $30 unlimited tethering plan or confused it with the basic unlimited data plan.  Eventually, we were told only pre-existing customers with already-activated 4G phones would qualify for the option of choosing the $30 unlimited tether plan.  It was too late, even before yesterday at midnight, for others to hop on board this deal.

But by this morning, we were starting to get different answers, culminating in a Verizon representative telling Stop the Cap! any customer who placed an order for a 4G smartphone through Verizon Wireless that invoked a plan change (part of the process of ordering the phone direct from Verizon assures that) would have likely found the addition of the “Verizon Mobile Hotspot Promo” as one of the line items added to your plan as part of the order.  If so, that qualifies you for the $30 unlimited tethering option, even if you are still waiting for your 4G phone to arrive in the mail.

Verizon claims after you receive and activate your new 4G phone, attempts to use the Hotspot feature should offer you the choice for the $30 Hotspot plan.  If it does not, we have the name and contact details of a Verizon employee that should be able to cut through the red tape and get you this plan.  The only requirement is you had to order the phone before midnight on July 7th.

Verizon does not know at this point if customers will be offered the promotional $30 unlimited price for a limited time only, or will forfeit it forever if they do not accept it immediately (or drop the optional add-on at some point).

At the end of business Wednesday, Verizon Wireless will end its unlimited data plans for new customers.  If you are an existing customer, you will be able to retain unlimited data for your smartphone indefinitely, but those considering an upgrade to 4G may want to consider doing so immediately, if you want to have an unlimited 4G tethering plan for your 4G-capable phone.

Verizon Wireless data pricing effective 7/7/2011

New Verizon Wireless Customers: You must buy and activate a 3G/4G-capable phone on Verizon’s network no later than 11:59pm Wednesday evening to qualify for the $29.99 unlimited data plan.  At this point, this means buying a phone from Verizon Wireless’ website or visiting a local store.  If you want the best possible price, we recommend calling Verizon Wireless and negotiating with them directly.  Verizon is often able to match prices from online retailers like Wirefly or Amazon, usually by throwing in service credits for your first month’s invoice.  New 4G customers can score an unlimited tethering add-on plan from Verizon for an additional $30 a month.  That means $29.99 for the data plan plus $30 for the tethering option, but if comes without any usage limits.  After July 6, all those new to tethering will only find one option: $20 for up to 2GB of tethering access.

Existing Verizon Wireless Customers: You will keep your current unlimited smartphone data plan indefinitely, perhaps even after upgrading your phone.  However, if you were interested in tethering on Verizon’s 4G network, consider upgrading to a 4G phone before Thursday to qualify for the $30 unlimited tethering plan, good only for 4G users with an existing tethering relationship with Verizon.  You must select the 4G tethering option before Thursday to qualify.  Call Verizon Wireless at 611 from your handset and make sure they take care of this for you to avoid complications.  An automatic update will be pushed to the Thunderbolt, Charge, and Revolution on July 7 to cut off the Hotspot free ride those customers had been enjoying up until now.  You will have to buy the service if you want to continue using it.  All 3G phones (iPhone, Droid X, etc.) will not see any pricing changes for 3G tethering – it is still $20 a month for up to 2GB of usage, no unlimited options for you.

Other pricing details:

• Verizon customers opting for the $30 for 2GB plan will lose company discounts on their data plan.  You must select a higher-cost data plan if you want to keep any employer discount;
• Verizon is now specifically prohibiting tethering any of their phones without a Verizon add-on tethering option.  This means third-party tethering apps you may have used before now violate your contract with them.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WCPO Cincinnati Verizon ending unlimited data plans 6-24-11.mp4[/flv]

WCPO-TV in Cincinnati covers the imminent funeral for Verizon’s unlimited data plans.  Verizon customers are not happy with the loss.  (2 minutes)