Terse FCC letter suggests Verizon's plan to throttle unlimited data is a cash grab
FCC Chairman Tom Wheeler has sharply questioned Verizon Wireless over its plan announced last week to throttle mobile data speeds for customers with unlimited plans.
In a letter to Verizon Wireless President and CEO Dan Mead on Wednesday, Wheeler challenged Verizon’s plans to treat customers differently based on their data plans rather than on network technology issues. His questioning suggested Verizon wants to slow down subscribers’ service so they’ll switch to a plan with a limited monthly data allowance.
“‘Reasonable network management’ concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams,” Wheeler wrote.
Verizon plans to sometimes scale back connection speeds for the top 5 percent of data users who are still on plans that let them send and receive unlimited amounts of data in a month. The company no longer sells such plans to new customers but allows those who had them in the past to keep them. Verizon claims its planned throttling practice, which it calls Network Optimization, is intended to protect the experience of all users at times and places where its network is experiencing high demand.
In his letter, Wheeler focused on the fact that Verizon is aiming the practice specifically at its remaining unlimited-data customers.
“I know of no past Commission statement that would treat as ‘reasonable network management’ a decision to slow traffic to a user who has paid, after all, for ‘unlimited’ service,” Wheeler wrote.
He cited information about Network Optimization on Verizon’s website. “In particular, please explain your statement that, ‘If you’re on an unlimited data plan and are concerned that you are in the top 5 percent of data users, you can switch to a usage-based data plan as customers on usage-based plans are not impacted.’”
Wheeler also asked why the carrier would expand its practice of speed throttling from its 3G network to its LTE infrastructure, which carries data much more efficiently. He also questioned the Network Optimization policy based on rules imposed on Verizon when it took on licenses in the prized 700MHz spectrum band. Those rules forbid Verizon from restricting users from downloading and using applications of their choice in the so-called C Block where its 700MHz frequencies lie, Wheeler wrote.
In a statement on Wednesday, Verizon called Network Optimization a limited practice.
“We will officially respond to the Chairman’s letter once we have received and reviewed it. However, what we announced last week was a highly targeted and very limited network optimization effort, only targeting cell sites experiencing high demand. The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don’t limit capacity for others,” Verizon said.
Wheeler himself is under pressure on the hot topic of how broadband providers should be allowed to manage their networks. Earlier this year he proposed regulations to replace former FCC rules on net neutrality, which a federal court had earlier struck down. Those rules suggest carriers could sell higher priority treatment on their networks to content providers.