Verizon has decided to treat its emerging mobile 5G network as a premium service that customers should pay more to access.

The company is debuting its mobile 5G network next month at select locations in Chicago and Minneapolis, but customers wishing to use it will need a new phone and a new, costlier plan.

Verizon confirmed its new Mobile 5G service will require a new premium unlimited plan, starting at $85. That is $10 more than Verizon’s current GoUnlimited plan. Customers will also need a Motorola Moto Z3 phone — currently the only model compatible with Verizon’s 5G network, and a special 5G Moto Mod attachment, sold separately.

You will need to switch to one of three 5G-capable unlimited plans from Verizon (pricing does not reflect $10 5G surcharge and legacy unlimited plans do not qualify for 5G service):

5G Moto Mod (back and front)

Some other points to consider:

• The $10 charge will not apply to your first three billing cycles.
• Verizon normally sells the Motorola Moto Z3 phone for $480.
• Verizon normally charges $350 for the 5G Moto Mod add-on, but if you preorder, it sells for as little as $50. Required for 5G service. It snaps on the back of your Z3 phone.
• Samsung will be ready with its first 5G phones later this year, but they will not support all the frequency bands expected to be used for 5G.

Verizon is planning a special sale on March 14 only:

• Add a new line of service to a Verizon device payment plan on March 14 only, and get a Moto Z3 for free.
• Existing customers can upgrade their phone to a Moto Z3 for $10 a month for 24 months, half the usual $480 retail price.
• Preorder the 5G Moto Mod add-on and pay $50 (usual retail price is: $349.99)

Verizon, the country’s leading provider of millimeter wave 5G wireless broadband, is promising to expand service nationwide, but admits it will only service urban areas where the economics of small cell/fiber network infrastructure makes economic sense.

At the Mobile World Congress conference in Barcelona, Spain, Verizon’s vice president of technology planning told PC that when it launches its mobile 5G network later this spring, home wireless internet service will come along for the ride.

“It is one network, based on 5G, supporting multiple use cases,” Verizon’s Adam Koeppe said. “Enterprise, small/medium business, consumer, mobility, fixed. When the 5G network is built, you have a fixed and mobile play that’s basically native to the deployment you’re doing.”

That means Verizon’s millimeter wave 5G network is designed to be shared by everyone and everything, including businesses, residential customers, cell phone users on the go, Internet of Things applications like smart meters and intelligent traffic systems, and more. But that network will not be everywhere Verizon or Verizon Wireless currently provides service.

“Our deployments of millimeter wave are focused on urban centers. It’s where the people are, where the consumption is,” Koeppe said.

Verizon faces significant costs building out its 5G wireless network in areas where it does not already offer FiOS fiber to the home service. Verizon’s 5G network is dependent on a fiber optic-fed network of small cells placed on top of utility and light poles at least every few city blocks. That means Verizon is most likely to get a reasonable return on its investment placing its 5G network in urban downtown areas and high wireless traffic suburban zones, such as around event venues, large shopping centers and entertainment districts. The company has chosen to deploy 5G in some residential areas, but only within large city limits. So far, it has generally steered clear of residential suburbs in favor of older gentrified city neighborhoods with plenty of closely-spaced multi-dwelling apartments, condos, and homes, as well as in urban centers with converted lofts or apartments.

Koeppe

Rural areas are definitely off Verizon’s list because the millimeter waves Verizon prefers to use do not travel very far, making it very expensive to deploy the technology to serve a relatively small number of customers.

Other carriers are not committing to large scale 5G deployments either.

At a debate held earlier today at Georgetown Law’s Institute for Technology Law & Policy, former FCC commissioner Mignon Clyburn, now a paid lobbyist for T-Mobile, warned that unless T-Mobile was allowed to merge with Sprint, its deployment of 5G will only happen in “very limited areas.”

Sprint has plans to introduce its own flavor of 5G, which won’t use millimeter wave frequencies, by June in nine U.S. cities. T-Mobile has talked about deploying 5G on existing large cell towers, which means one tower will serve many more customers than Verizon’s small cells. But with more customers sharing that bandwidth, the effective speed customers will see is likely to be only incrementally better than T-Mobile’s existing 4G LTE network. AT&T is initially moving in the same direction as T-Mobile, meaning many customers will be sharing the same bandwidth. That may explain why AT&T’s current 5G hotspot service plan also comes with a 15 GB data cap.

Verizon says its millimeter wave network will, by geography and design, limit the number of people sharing each small cell, making data caps unnecessary for its 5G fixed wireless home broadband replacement, which delivers download speeds of around 300 Mbps on average.

“We engineer the network to give the customer what they need when they need it, and the results speak for themselves,” Koeppe said.

Verizon is already selling its 5G service in limited areas for $50 a month to Verizon Wireless customers, $70 a month for non-customers. There are no data caps or speed throttles.

Based on the plans of all four major U.S. carriers, consumers should only expect scattered rollouts of 5G this year, and only in certain neighborhoods at first. It will take several years to build out the different iterations of 5G technology, with millimeter wave taking the longest to expand because of infrastructure and potential permitting issues.

Verizon is getting more aggressive about its promotions to attract new customers and keep existing ones happy with new offers that include free Netflix Premium and up to $20 in monthly discounts for Verizon Wireless customers choosing a double or triple play FiOS package.

Verizon claims some of these offers are available to new and “qualified” existing customers until Apr. 3, 2019, and could deliver significant savings on plans that range in price from $39.99 to $79.99 a month.

The budget minded broadband-only 100 Mbps plan offers a $50 Visa prepaid card and one year of service for $39.99 a month. This plan is only available to new customers, does not include the $12/month router charge, or fees or taxes. Customers have to sign up for autopay using a checking account or debit card, choose paper-free billing, and pass a basic credit check.

Those new or existing customers looking for faster internet-only service can choose the 300 Mbps plan for $20 more — $59.99 a month, pricelocked for two years. This plan includes six months of Netflix Premium, which supports Ultra High Definition (UHD/4K) streaming and allows up to four devices to stream at the same time. This is a $15.99/month value. These prices do not include the $12/month router charge, fees or taxes.

If you want to avoid the router fee and get gigabit speed, pay $20 more ($79.99) and new and existing customers can lock in service for three years with no router rental fee (a $12/mo value) and one full year of Netflix Premium (a $15.99/mo value).

Verizon also offers a triple play package to new customers including Custom TV, a slimmed down customizable TV package, with landline phone service and gigabit speed internet for two years at $79.99 a month, with one year of Netflix Premium (a $15.99/mo value). This plan has a two-year contract with a $350 early termination fee. There are a number of fine print fees to consider, however. Verizon charges a $12/mo fee for the set-top box, $12/mo router charge, $4.49/mo Broadcast TV surcharge and up to $7.89/mo Regional Sports Network surcharge. Also not included in the promotional price — a $0.99 “FDV Administrative Fee,” whatever that is. Altogether, these extra fees add $37.37 a month to the bill, turning the real price of this promotion into as much as $117.69 a month before other taxes and fees. Customers also have to sign up for autopay using a checking account or debit card, choose paper-free billing, and pass a basic credit check.

Somewhat reducing the sting of surcharges and fees on the triple play offer noted above is a discount worth $20 a month if you are a Verizon Wireless customer with a qualifying Go Unlimited or Beyond Unlimited plan. A bill credit of $10 a month will appear on your FiOS bill and another $10/mo credit will appear on your monthly Verizon Wireless bill as long as you maintain both qualifying FiOS and wireless plans.

Comcast and Charter Communications have no real interest in competing head-to-head in wireless with AT&T, Verizon, T-Mobile, or Sprint. Instead, the two cable companies hope to trap you in a bundled package of services too inconvenient to cancel.

Jeff Kagan, a longstanding telecommunications analyst specializing in the cable industry, believes Comcast, Charter, and other cable operators entering the wireless business have no intention of being a serious competitor to the country’s four largest mobile companies.

“The goal of XFINITY Mobile [from Comcast] is to offer their customers another service and to create a sticky bundle,” Kagan said. “It’s not to lead the wireless wars. It’s not to increase their market share for traditional reasons. It is simply to create a sticky bundle to stabilize and grow their customer base.”

Kagan

XFINITY Mobile and Spectrum Mobile (from Charter), both require customers to be signed up for their respective internet services. If a customer cancels internet service, they will lose their mobile service. That could prove to be a major hassle for wireless customers, because they will have to properly port out their existing phone number(s) to another provider before dropping broadband.

Kagan believes cable operators will use mobile service to further strengthen their bundle by tying discounts to the number of services each customer takes through the cable company.

“Customers who use one service find it easy to switch away to a competitor,” Kagan said. “However, when they use multiple services and get a discount for the bundle, they become sticky and generally stay put. And the more services a customer uses, the larger the discount, the stickier they get and the less likely they are to wander.”

That is also likely to be true with Altice, which operates Optimum (Cablevision) and SuddenLink and has partnered with Sprint to offer cell service.

Sprint and T-Mobile, which are planning to merge, have repeatedly argued cable operators will be aggressive new players in the mobile business, giving the potentially combined carrier fierce new competitors. But Kagan doubts that will prove true.

“The problem is, the sticky bundle is not a low-cost solution,” Kagan offered. “With that said, the higher cost to the cable television companies is less than that of losing their customer base. So, the cost makes sense as simply a cost of doing business.”

The challenge cable operators face is that none plan to own and operate their own traditional cellular network. Comcast and Charter have partnered with Verizon Wireless to resell access to its 4G LTE network and Altice will rely on Sprint. Leasing access on an ongoing basis is likely to be more expensive that relying on your own network, but beyond offering Wi-Fi calling and experimental access to future 5G-type services in the emerging CBRS band, cable operators will remain almost completely dependent on their wireless provider partners, limiting their effective ability to compete.

Kagan believes the goals of the two industries are different. Wireless operators are trying to monetize their networks through usage, while cable operators are trying to find new services that will keep customers loyal and are willing to ignore monetizing their wireless side businesses to achieve that goal.

Tens of thousands of rural New York families were hopeful after Gov. Andrew Cuomo announced in 2015 his intention to bring true broadband to every corner of the state by the year 2018. At the time, it was the largest and most ambitious broadband investment of any state in the country, putting $670 million in lawsuit settlement money and rural broadband funds from the FCC on the table to build out rural broadband service other states only talk about.

But for many rural New Yorkers, Gov. Cuomo’s program was a failure that could lock in substandard internet service (or no service at all) for years. What began as a 100% broadband commitment later evolved into 99.9% (then 98% in another estimate) after state officials learned $670 million was not enough to convince providers to share the cost of extending their networks to the most rural of the rural as well as those unlucky enough to live just a little too far down the road to make extending cable broadband worthwhile. But the governor proclaimed mission accomplished, and as far as the Cuomo Administration is concerned, the rural broadband issue has been resolved.

“There were a lot of tax dollars that were flipped and the governor has said, ‘Internet for everybody. Everybody will have internet.’ Well, that’s not the case. We’re not seeing that and those were his promises, not mine, but I voted for that money. A lot of other members did too,” Sen. Rob Ortt (R-North Tonawanda) told WBFO radio last year.

Ortt wants to know where the money is going and who exactly is getting it, and proposed legislation requiring annual reports from the Empire State Development Corporation detailing expenditures and disclosing the formula used to determine who gets true broadband service, and who does not.

For those not getting high-speed wireless or wired connections, the state has either offered nothing or dreaded satellite internet service, paying HughesNet $14,888,249 to supply discounted satellite equipment Hughes itself routinely discounts as a marketing promotion on their own dime.

For rural residents learning HughesNet was their designated future provider, many experienced with satellite internet over the last decade and hating nearly every minute of it, it was “thanks for nothing.”

“The governor pulled the rug right out from under us,” Ann told Stop the Cap! from her home near Middle Granville in Washington County, just minutes away from the Vermont border. “I have kids that require internet access to finish research and send in homework assignments. Internet service is not an option, and my kids’ grades are suffering because they have to complete homework assignments in the car or in a fast food restaurant or coffee shop that has Wi-Fi.”

Ann used HughesNet before, and canceled it because service went out whenever snow arrived in town.

“I thought the governor promised 100 Mbps service and HughesNet can’t even provide 25 Mbps,” she claims. “If you get 5 Mbps on a clear summer’s day, you are doing okay. In winter, reading email is the only thing that won’t frustrate you. It’s slow, slow, slow.”

Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

Nick D’Agostino brought his family to a new home an hour northeast of Syracuse when he got a new job. He was counting on the governor’s commitment to bring wired internet access to a home that used to have Verizon DSL, but no longer does after Verizon’s wired infrastructure deteriorated to the point where the company stopped offering the service to new customers like him arriving in the neighborhood. D’Agostino had to spend hours researching the state’s Broadband Program Office website to find out which provider was going to be supplying his census block (neighborhood) with 100 Mbps internet. He found HughesNet instead.

“It’s a kick in the pants because we have a lot of experience with HughesNet and Exede and neither came close to meeting their advertising claims,” he told Stop the Cap! “Exede was often unusable and a horrible company to deal with. HughesNet has a new ‘Gen 5’ service that is capable of DSL speeds, but comes with a low data cap and speed throttling.”

D’Agostino warns that New York made a terrible choice relying on satellite internet, even though HughesNet’s latest fleet of satellites has offered improvement over HughesNet a decade ago.

“The problem is HughesNet customers in a geographic area all share the same spot beam — a regionally targeted satellite signal that serves a specific state or region,” D’Agostino said. “When we lived in North Carolina, the population growth in rural areas meant a lot more satellite customers were sharing the same spot beam, and speeds plummeted, especially after Netflix, Hulu, and cord cutting took off. Nothing eats bandwidth like streaming video, which is why you can subscribe to their 50 GB allowance package and be over that limit after a single week.”

D’Agostino fears that tens of thousands of additional satellite users will dramatically slow down HughesNet across upstate New York unless the company finds a way to get more shared bandwidth to serve the state’s rural broadband leftovers.

“That usually means, ‘wait until the next generation of satellites are launched,’ something nobody should have to wait for,” D’Agostino said.

The obvious solution for D’Agostino is to convince Charter Spectrum, the nearest cable provider, to extend its lines down his street. The cable company agreed, if he paid an $88,000 engineering, pole, and installation fee.

“That is not going to happen, even if we got the dozen or so neighbors in our position to split the cost,” he said. “This is why Cuomo’s program is a flop. It turns out close to $700 million is not enough, and they probably always knew there would be people they could never economically serve because they are miles and miles from the nearest DSL or cable connection. But if the electric and phone companies are compelled to offer service, the same should be true for internet access.”

D’Agostino believes rural New Yorkers left behind need to organize and make their voices heard.

“They keep saying we are .1% of New York, but I’ve seen plenty of rural town supervisors and other local officials across upstate New York complain they have all been left behind, and that decision will cost their towns good education, jobs, competitive agribusiness, and services online that everyone assumes people can easily access,” he said. “Clearly the state is not telling the truth about how many are being internet-orphaned. There have been three rounds of broadband funding in New York. It is time for a fourth round, finding either tax breaks or funding to get existing providers to reach more areas like mine that are less than a mile from a Spectrum customer.”

Ann shares that sentiment, and adds that Vermont is looking for ways to get internet to its rural residents as well.

“We’re at the point where companies or co-ops already offering service are probably the quickest and easiest option to solve the rural internet crisis, but they are not going to pay to do it if they are not required to,” she said. “We have taxes and surcharges on our phone bill now that are supposed to pay for internet expansion, but the amounts are too small to get the job done I guess. Perhaps it is time to revisit this, because 99.995% is better than 99.9% and satellite internet should be the last resort for people living in a cottage miles from anyone else, not for people who can be in town in less than a five-minute drive.”

A familiar story for any rural resident trying to get internet access to their rural home. But there is a small silver lining. HughesNet’s newest generation of satellites has provided a modest improvement that is often better than rural DSL. (10:19)