When Verizon Wireless started disconnecting rural customers for using too much data, the nation’s largest wireless carrier described them as extremely heavy data users who were costing the company money. When the disconnections began in June, Verizon told Ars the customers “are using vast amounts of data—some as much as a terabyte or more a month—outside of our network footprint.”
But it’s now become clear that Verizon’s disconnection notices also went to people using just a few gigabytes a month. As we’ve previously reported, the affected customers are supported by Verizon’s LTE in Rural America (LRA) program, which relies on a partnership between Verizon and small rural carriers who lease Verizon spectrum in order to build their own networks.
Verizon customers in these network areas may not see a “roaming” indicator on their phone, but they’re technically on another network and Verizon has to pay roaming charges to the local network operator. When Verizon acknowledged last week that it is disconnecting another 8,500 customers, the company said that “the roaming costs generated by these lines exceed what these consumers pay us each month.”
That wouldn’t be surprising for customers who are really using a terabyte of data a month. But for at least some customers who are losing their service plans, that just isn’t the case. It appears that even small amounts of data can make these customers unprofitable for Verizon.
Three-person family uses 6GB a month
Sarah Craighead Dedmon, editor of the Machias Valley News Observer in Machias, Maine, has been writing about the Verizon disconnections and was one of the unlucky recipients of a disconnection letter herself. Like the 8,500 other Verizon customers in 13 states, her service is scheduled to end on October 17. In total, those customers have 19,000 lines on Verizon.
“My family has three lines, and we had a 6GB plan,” Dedmon, who lives in Machiasport, told Ars. “We frequently either bumped it or had to purchase 1GB extra for $15.” Dedmon provided us with screenshots of her data usage that back this up.
The Dedmon family’s data use shows they were going through about 2GB or a little more per person each month. But the disconnection notice from Verizon told Dedmon that her family was “using a significant amount of data while roaming off the Verizon Wireless network.”
There aren’t many options besides Verizon where her family lives. In Dedmon’s area, Verizon has a roaming deal with a network called Wireless Partners, who are “unlike a lot of the other small cell carriers in that they do not sell service directly on their own,” Dedmon said. “Verizon is their only customer on this network.”
“Our only other two options here are US Cellular and AT&T, and because my husband travels nationally for work, we’ll have to choose AT&T,” she said.
As previously noted, the key determination for Verizon seems to be whether it has to pay more in roaming costs for a customer than it gets in return via the customer’s service fee. A customer using only a few gigabytes of data might cost Verizon a substantial enough amount to warrant disconnection if the roaming fee is high enough and if most of the usage is away from Verizon’s own cell towers.
But we don’t know the exact amount of money involved. Verizon hasn’t given us more details on the business arrangements in response to our inquiries. We also haven’t gotten a firm answer on how much roaming data customers can use before getting kicked off their service plans.
The business relationships between Verizon and these networks goes deeper than standard roaming agreements. Verizon’s LRA program provided technical support and resources to 21 rural wireless carriers to help them build 4G networks, and Verizon was able to sell service plans to customers who would be using these new networks.
“The program extends the footprint of 4G LTE coverage for both the rural carrier and Verizon, as customers can take advantage of both networks,” Verizon said in May 2015 when it provided a glowing update on the program’s progress.
The rural network companies, such as Wireless Partners, lose revenue from roaming agreements they have with Verizon when customers are kicked off the services.
“Unfortunately, the contract itself precludes us from discussing its details, and we are refraining from speculating about Verizon’s motives other than to share what has already been reported,” a Wireless Partners spokesperson told Ars. “We continue to advocate on behalf of consumers and are hopeful that a resolution can be reached in consideration of the significant public safety concerns and the access to opportunity this network provides for Downeast Maine.”
Verizon’s May 2015 statement on the LRA program boasted that it covered 2.6 million people. “Verizon believes that customers even in the smallest communities deserve the most modern wireless service and technology,” Verizon executive Philip Junker said at the time.
Disconnection notices wrongly sent to public safety workers
The 8,500 customers who were sent disconnection notices are spread across Alaska, Idaho, Iowa, Indiana, Kentucky, Maine, Michigan, Missouri, Montana, North Carolina, Oklahoma, Utah, and Wisconsin. Verizon told us that 213 customers got the notices in Maine.
Dedmon’s latest article has details on several other customers in Maine who received disconnection letters. Among them is Jeff Wilder of Cutler, Maine, who also talked to Ars. He says he uses between 2GB and 3GB a month.
Wilder volunteers for two local fire departments and said he’s a full-time firefighter for the Navy. But when he told Verizon customer service agents about his status as a public safety worker, he was told that no exceptions would be made, he said.
“It didn’t make any difference,” Wilder told Ars. “They probably have a thing they have to read to each customer that comes from above them.” Wilder uses his personal phone both for work and personal matters.
When Ars discussed Wilder’s case with Verizon, a company spokesperson told us that Verizon is “not discontinuing service for any firefighters, first responders, or government or business customers.” The spokesperson asked us to get Wilder in touch with her, and Wilder was subsequently informed that he could disregard the disconnection letter and that his service would continue.
But Wilder wasn’t the only public safety official who apparently received a disconnection notice that he shouldn’t have gotten. Dedmon reported that Michael Reece, a customs and border protection officer with the Department of Homeland Security in Lubec, also got a disconnection notice despite never exceeding his data cap.
“As someone who works in law enforcement, it is very important that I have usable phone coverage,” Reece told the Machias Valley News Observer. “Verizon offers full coverage all the way between Machias and Lubec.”
How much data is too much?
Although public safety officials should be spared because they weren’t supposed to get cutoff notices, Wilder’s case raises questions about the service plans Verizon is selling to rural customers and how much data customers can actually use before getting kicked off the network.
About a week before receiving his cutoff notice, Wilder switched from a 2GB-per-month plan to an unlimited data plan. “If I wanted to watch a movie or something, I didn’t want to worry about it,” Wilder told Ars. Wilder was paying about $80 a month for 2GB, and the new unlimited plan costs about the same amount because of recent pricing changes.
Verizon told him that his switch to an unlimited data plan had nothing to do with the disconnection notice, Wilder said. But if using 2GB to 3GB a month was enough to get him kicked off Verizon service, why would the company sell him an unlimited plan that should allow him to use many times that amount of data?
While we don’t have an official answer to that question, we presume that the company department pushing people to upgrade to bigger data packages wasn’t aware of the impending disconnections.
A similar story comes from telecom news site Stop the Cap, which quotes “Danny” from eastern Hancock County, Maine, who had a 12GB data plan. Verizon recently urged him to upgrade to an unlimited plan because he had been “cutting it close” to the data cap, even though he had been using only about 7GB a month, the article says.
Danny then got one of the disconnection notices stating that he had been using too much data outside the Verizon network and would be kicked off on October 17, the article said.
“Danny and many other affected readers tell us their usage is well below 10GB a month,” the article said. “Some customers received termination notices and use an average of only 3GB a month and live near a Wireless Partners tower.”
To some customers, it’s also not clear how long their Verizon service will remain available.
“Many local Verizon users have called the company and received assurances that their service will continue,” Dedmon wrote. “But for how long? Verizon has stopped permitting new customers with Washington County addresses to purchase contracts. Verizon would not respond to inquiries regarding this issue.”
Maine officials consider next steps
Maine Public Advocate Barry Hobbins was scheduled to meet today with Maine Attorney General Janet Mills about how the state should respond to the disconnections.
The Public Advocate office is an official government entity that represents Maine utility customers. When contacted by Ars, Hobbins told us yesterday that “since Verizon’s decision to terminate wireless service to hundreds of customers,” he has been “called upon by scores of affected Verizon customers, public safety officials, legislators from the two affected counties of Washington County and Hancock County, first responders, municipal officials, reporters, [the] Chairman of the Washington County Commissioners, [a] former President of the Maine Senate from Washington County, [a] Homeland Security official, and even suburban progressive Democratic leaders from the Portland area, 250 miles away.”
Hobbins said he would give us an update Friday morning on his meeting with the attorney general. If there is good (or bad) news for Verizon’s rural customers, we’ll let you know.