FCC Chairman: Verizon Uses a 'Disturbing' Loophole to Throttle Unlimited Data
Tom Wheeler calls Verizon Wireless out for using "network management" as an excuse to pad its bottom line.
Image: Ken Wolter/ Shutterstock
Federal Communication Commission Chairman Tom Wheeler is "deeply troubled" about Verizon Wireless's recently-announced plan to begin slowing down data speeds for some customers, he wrote in a strongly-worded letter to the company's CEO on Wednesday.
Last week, Verizon Wireless, the nation's largest mobile broadband provider, announced that starting in October, some customers who have unlimited plans and are heavy data users will have their speeds limited when they are connecting to cell sites that are experiencing heavy traffic.
"I am deeply troubled by your July 25, 2014 announcement that Verizon Wireless intends to slow down some customers' data speeds on your 4G LTE network starting in October 2014," Wheeler wrote in a letter to Daniel Mead, President and CEO of Verizon Wireless.
According to Verizon Wireless, customers who fall within the top 5 percent of data users, who have fulfilled their minimum contractual commitment, and are on unlimited plans using a 4G LTE device "may 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 Wireless. The company has applied a similar policy to users on its 3G network since 2011; now the company wants to extend the policy to its higher-speed LTE network.
Verizon justifies the plan by calling it a "network management" practice—a highly-loaded term-of-art in the telecom policy community that refers to ways in which broadband providers can manipulate speeds in order to ensure that their networks run smoothly and securely.
Wheeler is not buying it.
"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, which was dated July 30 and obtained by Motherboard. "It is disturbing to me that Verizon Wireless would base its network management on distinctions among its customers' data plans, rather than on network architecture or technology."
In essence, Wheeler is accusing Verizon Wireless of cloaking 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.
Verizon Wireless denies that its "Network Optimization" policy amounts to throttling. "The difference between our Network Optimization practices and throttling is network intelligence," the company says. "With throttling, your wireless data speed is reduced for your entire cycle, 100% of the time, no matter where you are."
But this claim is somewhat "nonsensical," according to Jon Brodkin at Ars Technica. "Throttling is still throttling whether it happens one percent of the time or 100 percent, of course," Brodkin wrote last week.
In his letter, Wheeler asks for a "prompt response" to several questions. This one may be the most pertinent: "How does Verizon Wireless justify this policy consistent with its continuing obligations under the 700 MHz C Block open platform rules?"
In 2008, Verizon agreed to pay $4.7 billion for the highly coveted 700 Mhz C Block of wireless spectrum in a closely watched FCC auction, and in doing so agreed to abide by open platform provisions set by the FCC. As part of its bid, the company agreed to not deny, limit, or restrict the ability of users to download and use applications of their choosing on the network.
"We will officially respond to the Chairman's letter once we have received and reviewed it," a Verizon Wireless spokesperson said in a statement emailed to Motherboard. "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."