FCC Questions Verizon Plan to Throttle Some Unlimited Data Customers

[MacRumors]

Federal Communications Commission Chairman Tom Wheeler today sent a letter [PDF via Gigaom] to Verizon Wireless, questioning its plan to throttle customers that have unlimited data plans during peak usage times. Verizon first announced its intention to throttle high-usage customers on grandfathered unlimited LTE plans last week.

In the letter, Wheeler says that he is "deeply troubled" by Verizon's decision to throttle its unlimited users, as the company described its efforts as necessary for "Network Optimization." Wheeler stated that he does not believe slowing the data speeds for select users falls under the "reasonable network management" umbrella.

"Reasonable network management" concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams. 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.

Wheeler goes on to ask Verizon to answer a series of questions, requesting that the company explain its rationale for treating customers differently based on data plan type and questioning whether Verizon's new throttling policy is justified under the FCC's Open Internet rules. Wheeler also questions the necessity of cutting data speeds on the much more efficient 4G LTE network.

In a statement to The Wall Street Journal Verizon said that it would respond to the Chairman's letter following a review of the content.

"We will officially respond to the Chairman's letter once we have received and reviewed it," Verizon Wireless said in a statement. "However, what we announced last week was a highly targeted and very limited network optimization effort, only targeting cell cites 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 plans to begin throttling high-usage LTE customers accessing congested network cells beginning on October 1. The company says the change will only affect users with grandfathered unlimited plans not under contract who rank in the top five percent of data users.

At the time of its announcement, Verizon said that the top five percent consisted of customers who used 4.7GB of data each month, and those customers may experience slow data speeds "when using certain high bandwidth applications, such as streaming high-definition video or during real-time, online gaming" when connected to a cell site "experiencing heavy demand."

Verizon, which has long restricted 3G data usage for unlimited users, is not the first wireless carrier that has implemented LTE usage restrictions for customers on grandfathered unlimited plans. Other carriers, like AT&T, have similar policies and restrict key features from unlimited data plan holders in an effort to encourage them to switch to pay-by-usage tiered data plans.

Article Link: FCC Questions Verizon Plan to Throttle Some Unlimited Data Customers

 

[C DM]

Aren't at least some of the other carriers already doing something similar on at least some of the (older/unlimited) plans they have?

 

[bushido]

we have "200 mb before getting throttled to 64kbs unlimited plans" here in Germany. those are all kinds of awesome.

 

[Agent OrangeZ]

If Verizon really wants to get rid of unlimited data that badly, why not just yank it away. All of the contracts have expired for those with unlimited. There is no law that says they have to grandfather your plan.

 

[exizeo]

All a good reason to go SIM-free, and go with T-Mobile.

 

[gluckett]

I don't understand why the FCC is concerned now that Verizon is trying to throttle, yet didn't when the other carriers started doing it?!?

 

[DarkCole]

4.7GB is considered high usage..?

 

[Flood123]

Oh NOW the FCC cares about data usage and throttling. That's cute. I wish they cared that much about net neutrality.

 

[eac25]

4.7GB is considered high usage..?

By 95% of Verizon's world, apparently.

 

[seamer]

When I was using unlimited on AT&T until just recently (had to change the plan == unlimited got yanked as result), I was doing 19gb/month. 4.7gb seems VERY low for tech savvy users.

 

[Babbles]

I guess Verizon is getting too big for their britches. Let's be honest, charging by the gigabyte has brought in more revenue than expected with phones requiring them now-a-days. They could cough up the money and update the congested areas to receive more usage so it doesn't affect other customers. . .

 

[jicon]

Of all the battles FCC could wage to be on the side of consumers, they pick this one?

A good 16 years ago, when cable modem use was in its infancy, this had to be a common strategy to help manage network saturation. You're targeting a small number of individuals consuming the most bandwidth. Typically those well up in the top .05% are likely better served by a dedicated business plan to guarantee bandwidth anyway.

The more concerning scenarios are Netflix striking deals with ISPs to guarantee bandwidth. FCC should be focusing efforts to eliminate those sorts of deals... unless Netflix is a Comcast or ATT subscriber.

 

[joshuaclinton]

I don't remember the FCC uproar when At&t did the same thing. Someone please correct me if I'm mistaken....please.

 

[NMBob]

4.7GB is considered high usage..?

It's 1 single-layer DVD. As good a cap as any?

 

[Yinmay]

I love how Verizon claim their problem is with "high data users in cell cities experiencing high demand".

Yet if you're in one such city, and suppose you're very rich, on a normal 5 GB plan and use 500 GB a month and pay whatever the extra 495 GB cost, they're fine with it and won't throttle you.

So really their problem isn't that you're a "high data user in cell cities experiencing high demand". It's that they regret entering into a contract with you where you didn't have to pay extra for that and now they're trying to unilaterally change the terms of the contract to make more money.

 

[rdlink]

Smack down!

I love it. And I agree 100% with Wheeler. Selective and targeted throttling is BS.

4.7GB per month is the top 5% of their unlimited users, and they say it might affect their network? That's utterly ridiculous. I buy 8GB a month, and usually end up using about 5GB on any given month. Why am I not taxing their network?

I am so glad that the FCC is calling them out on this utter crap.

 

[Agent OrangeZ]

All a good reason to go SIM-free, and go with T-Mobile.

And then you see how crappy their coverage is and you go right back to Verizon. At least... that's what I did today.

 

[0098386]

4.7GB is considered high usage..?

It's sad that my first thought was "yep, of course it is". But it really shouldn't be.
/runs off to hug my unlimited 70mbps BT Infinity connection/

 

[CrazyForApple]

Verizon is like a dictatorship

 

[iF34R]

Doesn't make sense.

If this is about network optimization, then it should be universal. Not only on off contract unlimited users.

If I download 5.0GB then I'm throttled on congested towers. If my brother, on contract 2GB plan, downloads 5.0GB, he's not causing the same problem I am??

 

[macduke]

Where was the FCC back when AT&T throttled the crap out of our original iPhone unlimited data plans?

 

[i-John]

Aren't at least some of the other carriers already doing something similar on at least some of the (older/unlimited) plans they have?

Not in the US.

AT&T unlimited plan has 5GB then it states it was throttle speeds.

Verizon's plan is to throttle at "peak times". This can happen whenever Verizon feels like it, regardless of your data usage.

 

[Boatboy24]

I don't remember the FCC uproar when At&t did the same thing. Someone please correct me if I'm mistaken....please.

Methinks Mr. Chairman is a Verizon subscriber - or has close friends that are.

 

[screensaver400]

4.7GB per month is the top 5% of their unlimited users, and they say it might affect their network? That's utterly ridiculous. I buy 8GB a month, and usually end up using about 5GB on any given month. Why am I not taxing their network?

Sounds like you don't understand economics. Bandwidth is a scarse resource, right? By offering an unlimited data plan, you provide no incentive to limit use.

You buy 8GB, and use 5GB. Great. Knowing you're only buying 8GB gives you incentives to limit usage---turning on Wi-Fi, not streaming that dumb YouTube clip, and so on. Economically, tiered plans facilitate a more efficient allocation of scarce resources, since the user bears a cost for data use.

That being said, I'm still on a Verizon unlimited data plan, and dread the day when I'm forced to give it up. Why? I just don't want to pay as much as they charge. I currently use about 25GB of data per month over three lines (my mother actually uses more than me, most months) and pay $200/month. If I could get 30GB of tiered data for the same price, I'd switch.

In other words, I'm not a proponent of unlimited plans. They probably never should have been offered, and tiered data provides incentives to limit usage. But I'm a bigger opponent of expensive data.

 

[jayducharme]

I don't remember the FCC uproar when At&t did the same thing. Someone please correct me if I'm mistaken....please.

AT&T did make that announcement, with a similar rationale to Verizon's:

As a result of the AT&T network management process, customers on a 3G or 4G smartphone with an unlimited data plan who have exceeded 3 gigabytes of data in a billing period may experience reduced speeds when using data services at times and in areas that are experiencing network congestion. Customers on a 4G LTE smartphone will experience reduced speeds once their usage in a billing cycle exceeds 5 gigabytes of data. All such customers can still use unlimited data without incurring overage charges, and their speeds will be restored with the start of the next billing cycle.

Wheeler should go after AT&T as well. What both companies should have said was that anyone using over X GB of data per month would be throttled. Period. Set the bar, and then it doesn't matter what plan a customer is on; if the limit is exceeded, the throttling begins (except obviously for someone who has the resources to buy boatloads of data each month). I think Wheeler's concern in this case is that Verizon (and AT&T) specifically targeted users who originally purchased an unlimited data plan. That seems unfair. The expectation for "unlimited" is not "throttled".

Perhaps the problem the telecoms have is that all of their other plans do have specific caps, whereas the unlimited plans don't. But then, as someone else said, they should just abandon the term "unlimited". Problem solved.