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​Verizon Backs Off New Data Throttling Policy After FCC Pressure

The reversal by Verizon comes after Federal Communications Commission Chairman Tom Wheeler criticized the new plan.
Image: Shutterstock

Verizon Wireless has ditched its controversial plan to begin slowing down data speeds for certain customers, just as the new policy was about to take effect, the wireless giant announced on Wednesday.

The reversal by Verizon comes after Federal Communications Commission Chairman Tom Wheeler criticized the new plan, and represents a small, if clear, victory for the FCC chief. In a statement, Wheeler praised Verizon's decision to abandon the plan, which many critics called tantamount to "throttling."

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Verizon Wireless, the nation's largest mobile provider, had said the new policy was necessary to ensure optimal network performance for all subscribers. Under its proposed "network optimization" plan, some customers who had unlimited plans and were heavy data users would have had their speeds limited when connecting to cell sites experiencing heavy traffic.

"We've greatly valued the ongoing dialogue over the past several months concerning network optimization and we've decided not to move forward with the planned implementation of network optimization for 4G LTE customers on unlimited plans," Verizon said in a statement emailed to Motherboard. The policy was supposed to go into effect on Wednesday.

In May, Wheeler testified that he was theoretically okay with the idea of paid prioritization, but he also argues that throttling of unlimited plans is detrimental to consumers.

The FCC has been under increasing pressure from net neutrality advocates to include wireless carriers in its new Open Internet rules. (Under the FCC's now-defunct 2010 rules, wireless carriers weren't bound by net neutrality, which is the principle that broadband companies should treat all data equally.)

The big wireless providers like Verizon and AT&T vehemently oppose the application of net neutrality to their networks, and it's possible that Verizon's decision to drop its "network optimization" plan represents a tactical concession designed to ward of tougher regulation under the FCC's new Open Internet rules.

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In July, Verizon Wireless said the new plan would apply to customers using a 4G LTE device who fell within the top 5 percent of data users and who had fulfilled their minimum contract. Those users were poised to experience "slower data speeds when using certain high bandwidth applications, such as streaming high-definition video or during real-time, online gaming, and only when connecting to a cell site when it is experiencing heavy demand."

As of March 2014, the top 5 percent of data users were using 4.7 GB or more of data each month, according to Verizon. The company has applied a similar policy to users on its 3G network since 2011, and that policy will continue, a company spokesperson told Ars Technica.

Screenshot of questions sent to Verizon CEO Daniel Mead by FCC Chairman Wheeler. Image: Scribd

Wheeler blasted the plan in a strongly worded letter sent to mobile giant, in which he essentially accused Verizon of obscuring a business decision designed to push users off unlimited data plans—which it discontinued offering to new customers in 2011—as a "network management" practice.

"Reasonable network management concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams," Wheeler wrote in the letter, adding that he was "deeply troubled" by the company's decision.

In his letter, Wheeler raised the possibility that the new policy could violate obligations associated with the company's 2008 purchase of $4.7 billion worth of 700 Mhz C Block wireless spectrum, which became the basis for the company's 4G LTE network. As part of that purchase, the company agreed to not deny, limit, or restrict the ability of users to download and use applications of their choosing on the network.

Wheeler praised the company for reversing itself on the new policy. "I salute Verizon Wireless's decision," he said in an emailed statement. "This is a responsible action and I commend Verizon's leadership on this issue."

This isn't the first time that Wheeler has used the FCC's bully pulpit to pressure a wireless company into abandoning an action that he disapproves. Earlier this year, Wheeler and other FCC officials made clear that they opposed Sprint's attempt to purchase its smaller rival T-Mobile, which would have reduced the number of big US wireless carriers from four to three. Sprint eventually dropped its effort to buy T-Mobile.

Here's the full statement from Verizon Wireless:

Verizon is committed to providing its customers with an unparalleled mobile network experience. At a time of ever-increasing mobile broadband data usage, we not only take pride in the way we manage our network resources, but also take seriously our responsibility to deliver exceptional mobile service to every customer. We've greatly valued the ongoing dialogue over the past several months concerning network optimization and we've decided not to move forward with the planned implementation of network optimization for 4G LTE customers on unlimited plans. Exceptional network service will always be our priority and we remain committed to working closely with industry stakeholders to manage broadband issues so that American consumers get the world-class mobile service they expect and value.