FCC Questions Verizon Plan to Throttle Some Unlimited Data Customers

[kenroberts83]

Why do you people keep saying Net Neutrality was struck down by the courts? Yes, Net Neutrality was. 47 CFR 27.16 was not struck down by the courts. This is the Code, or law, that VZW purchased this license for. It hasn't been removed from the Code of Federal Regulations. It's still law as far as VZW's C Block 700 MHz is concerned.

Is this a serious question? You asked me why I said that net neutrality was struck down by the courts, and then agreed that net neutrality was struck down by the courts. I'm guessing reading comprehension isn't your strong suit. I'll repeat my earlier comments for those interested.

"Considering that net neutrality was struck down by the courts, I wouldn't put a lot of stock in enforceability of FCC internet regulations."

If the FCC attempts legal action against Verizon on the basis of the 700 MHz auction agreement, it is very possible that the courts will determine that agreement to have been outside of the scope of the FCC's legal mandate.

 

[Renzatic]

If the FCC attempts legal action against Verizon on the basis of the 700 MHz auction agreement, it is very possible that the courts will determine that agreement to have been outside of the scope of the FCC's legal mandate.

No, they have to abide by the terms of the agreement, which have absolutely nothing to do with, nor anything in common with, the reasons net neutrality was struck down by the courts.

If you want the basic jist of why net neutrality died in the US, it's because the FCC defined the rules required to establish it, but never bothered to classify broadband providers as common carriers. It wasn't an issue of mandate, or boundaries. Rather, it was an issue of conflicting terms. One that didn't survive the courts.

...now, if the FCC were to turn around and classify providers as common carriers, we'd have net neutrality again. But the chances of that happening in the next 5 years are roughly as likely as flying pigs sledding in hell tomorrow.

 

[mantan]

I know. It's pretty ridiculous.

Wages, raises, doesn't have anything in relation to what this is about.

... and it is about one thing; money.

Though the money part is funny around here.

People will grab their torches and pitchforks to support Apple charging a ridiculously high premium and get an unheard of profit margin per device. They'll brush off all the rumors of the Apple negotiating with the cell companies to increase the price of iPhone 6 by $100 (those cell companies are arguing on the customer's behalf by the way.) They'll ignore Apple $100 for a $11 dollar increase in flash memory and insisting the smallest device is still 16 MB.

But if a cell company does anything that somehow seems like they want an extra nickel, people write 11 pages of how evil cell phone companies are.

 

[screensaver400]

LOL. I think I do, in fact understand economics. My point was that bandwidth is not, in fact scarce.

I don't think you know what scarcity, in an economic sense, means. Scarcity doesn't necessarily mean shortages. It simply means that the resource must be allocated in some way. Nearly everything is a scarce resource (debatably, seawater and air are not scarce).

If it were, how does VZW tell you that they're worried about you using 4.7GB a month if you're unlimited, and they're not worried about me using 8GB a month, because that's what I paid for?

This doesn't make sense, if we're discussing economic scarcity. It sounds like you're making some sort of an inequality argument.

This is just disingenuous BS. Back before selling data became their golden goose they went on about how expensive it was to give you unlimited minutes, or unlimited texts. Now suddenly it's cheap for you to use those services without metering.

Actually, back when cell service was about minutes or texts, the problem was about running the network as a whole. In other words, once a network buys the spectrum, builds the towers, and so on, the cost to send a text or make a call is comparatively low. But you still have to pay for the purchase of spectrum and the building of towers, and the scheme they used was minutes and texts, in order to charge more to heavy users and less to light users. Would you prefer everyone get charged the same price, in effect having light users subsidize heavy users?

We will eventually get to the point where all data plans will be unlimited.

I doubt that. Even cable internet is moving away from a truly unlimited model. I expect that, at some point, the cost of data will be low enough that we won't bellyache over needing an "unlimited" plan.

Frankly, there's no such thing as an "unlimited" plan. Data is a scarce resource---people want more of it than can be provided, particularly in urban areas. We saw what happened to AT&T once people started really using their unlimited data plans, after the iPhone was released: the value of the data plan suddenly exceeded its price. Once that happens, you pay in other other ways---like with shortages.

 

[ppenn]

uhhhhh....they just pretending AT&T hasn't been doing that for years already?

 

[C DM]

uhhhhh....they just pretending AT&T hasn't been doing that for years already?

The rest of the thread more or less covers that.

 

[iF34R]

Though the money part is funny around here.

People will grab their torches and pitchforks to support Apple charging a ridiculously high premium and get an unheard of profit margin per device. They'll brush off all the rumors of the Apple negotiating with the cell companies to increase the price of iPhone 6 by $100 (those cell companies are arguing on the customer's behalf by the way.) They'll ignore Apple $100 for a $11 dollar increase in flash memory and insisting the smallest device is still 16 MB.

But if a cell company does anything that somehow seems like they want an extra nickel, people write 11 pages of how evil cell phone companies are.

I pay for products and services I feel is fair to me. I'd pay double, triple, what I pay now for unlimited, no throttling, etc. Basically, the same service I get now, I'd pay more for. I don't want to pay the same amount I am now, and get less service.

 

[kenroberts83]

No, they have to abide by the terms of the agreement, which have absolutely nothing to do with, nor anything in common with, the reasons net neutrality was struck down by the courts.

Nothing in common with? Are you serious? They're both internet regulations by the FCC. I suppose you think a Chevy has absolutely nothing in common with a Mitsubishi as well, right?

If you want the basic jist of why net neutrality died in the US, it's because the FCC defined the rules required to establish it, but never bothered to classify broadband providers as common carriers. It wasn't an issue of mandate, or boundaries. Rather, it was an issue of conflicting terms. One that didn't survive the courts.

That's one way of putting it. The more correct way is to say that the FCC did not have the legal authority to regulate non-common carriers. You know, like they're attempting to do right now. The fact that Verizon agreed to the regulation does not necessarily make the regulation legal, especially since acquiring spectrum is basically a requirement for telecoms to stay in business.

...now, if the FCC were to turn around and classify providers as common carriers, we'd have net neutrality again. But the chances of that happening in the next 5 years are roughly as likely as flying pigs sledding in hell tomorrow.

And thank god for that. The last thing we need is the government turning our dynamic internet sector into something akin to the rail industry or landline phones, both sectors where innovation moves at a snail's pace, if at all. I'd challenge you to present one example of a common carrier industry that is flourishing today.

 

[kenroberts83]

But if a cell company does anything that somehow seems like they want an extra nickel, people write 11 pages of how evil cell phone companies are.

I had the same thought. It's absolutely ironic, isn't it?

I think it has something to do with the polarization of American media today. So many people only hear one side of the argument, and so only see the issue from one perspective. They don't even acknowledge that another valid viewpoint exists, because they've never been exposed to it.

Unfortunately "net neutrality" has become something of a ideological religion among the political left in recent years. Few people really understand all of the unintended consequences that would entail. It absolutely amazes me that supposedly proponents of internet freedom want to use decades-old telecom regulation to govern the internet. That would be the end of the era of the free internet. Absolutely and definitively.

The great thing about the private sector is that if you don't like the way things are going, you can simply wait a few years and it'll change. Existing US telecom regulations were passed in 1934, and slightly amended in 1996. Think waiting a few years for better service is bad? Try 62 years.

 

[kenroberts83]

I pay for products and services I feel is fair to me. I'd pay double, triple, what I pay now for unlimited, no throttling, etc. Basically, the same service I get now, I'd pay more for. I don't want to pay the same amount I am now, and get less service.

You'd pay double or triple, but would you pay 1000x more? By demanding truly unlimited service without throttling, you're demanding the ability to use an unlimited amount of data, which can easily go into the terabytes. Imagine that you use 1 terabyte of data, which is about the equivalent of downloading a couple of 1080p movies per day for a month. You're literally using 1000x the data of someone on a 1GB plan. Obviously the cost of data goes down as you consume more gigabytes, so what's a fair price? 100x the cost of a 1GB plan? It's certainly not double or triple.

So there you see the dilemma. So-called 'power-users' can easily consume an absolutely extreme amount of data if they wish. Some people on this forum even said that they intentionally do so, to get back at the cellphone companies. Cellular companies have absolutely no interest in allowing customers paying roughly the same rate to consume such a wide variance of data.

Their solution is pay per gigabyte. Considering that most customers use less than 2GB per month, this is not such a bad idea. If you're typically consuming more, then you can pay for more. You can even pay double or triple, as you mentioned, and get far more data than you'll probably even need. You just won't be able to tether your desktop to your cellphone and consume 100GB or whatever in a month.

Over time, competition will continue to decrease the cost per gigabyte. There will likely be a cost-per-usage system for some time, however. As data speeds get faster, people are simply able to consume more data in a month, thus negating many of the bandwidth upgrades on the telecom side. I don't think you'll see a return to truly unlimited service at AT&T/Verizon for several years to come, perhaps decades.

 

[Renzatic]

That's one way of putting it. The more correct way is to say that the FCC did not have the legal authority to regulate non-common carriers. You know, like they're attempting to do right now. The fact that Verizon agreed to the regulation does not necessarily make the regulation legal, especially since acquiring spectrum is basically a requirement for telecoms to stay in business.

Give me some proof to back up this assertion. Cuz right now, what you're saying is "the FCC doesn't have the legal authority to regulate what the FCC was designed to regulate".

And thank god for that. The last thing we need is the government turning our dynamic internet sector into something akin to the rail industry or landline phones, both sectors where innovation moves at a snail's pace, if at all. I'd challenge you to present one example of a common carrier industry that is flourishing today.

You mean like cable and broadcast TV, satellite, cellphones, etc. etc. All things that were flourishing up until the advent of the internet interrupted their once secure business models?

A common carrier is simply a middle man between the innovative companies, and the people wanting to use them. In terms of the internet, they're the people lying between Netflix, Apple, Amazon, and you. They don't have to be innovative in the sense that they don't have to offer you anything unprecedented. They're innovative in a more low key, less noticeable way. They have to make sure they're on the cutting edge of technology to get you to the innovative sectors as smoothly and quickly as possible.

But when you start allowing these carriers to do their own thing. Like set up their own competing Netflix service, or force Apple to pay more for people to access iTunes, they introduce a conflict of interest. Because they form a natural monopoly on the last mile of cable, these 3rd party companies have no way to directly compete against them. If the carrier wants their movie service to be faster than Netflix, there's nothing stopping them. It's their network, they ultimately control what you get and how fast you get it.

That's why they should be considered common carriers. Innovation happens under competition, with net neutrality laws acting both as a guideline, and a guarantee. Without it, you have the potential of the providers monopolizing their own services at the expense of 3rd parties.

----------

You'd pay double or triple, but would you pay 1000x more? By demanding truly unlimited service without throttling, you're demanding the ability to use an unlimited amount of data, which can easily go into the terabytes. Imagine that you use 1 terabyte of data, which is about the equivalent of downloading a couple of 1080p movies per day for a month. You're literally using 1000x the data of someone on a 1GB plan. Obviously the cost of data goes down as you consume more gigabytes, so what's a fair price? 100x the cost of a 1GB plan? It's certainly not double or triple.

And like I said before, it's not so much how much you get, as when you get it. Download 35 gigabytes usually takes me about an hour and 45 minutes (give or take) on my 50 megabit connection. If I were to do that between 1 and 3 AM, I have a substantially less chance of congesting the network than I would doing so during peak hours. If I do that between 1 and 3 AM every day, I'll have downloaded my gigabyte of data, without costing the telcos a single red cent, or inconveniencing anybody.

Downloading is free. It's when you download that's the problem.

 

[Truefan31]

They do it so people still need home internet so they make more money. There's plenty of people who would drop their home service if they got unlimited data.

 

[C DM]

Has anybody seen a copy of VZW's official response (not the blog post) to Wheeler's letter/questions? I read on BGR's website that an official response would be transmitted Thursday (yesterday).

Verizon's response: https://www.macrumors.com/2014/08/04/verizon-fcc-throttling-dispute/

 

[campyguy]

Verizon's response: https://www.macrumors.com/2014/08/04/verizon-fcc-throttling-dispute/

And: http://www.theverge.com/2014/8/4/5968481/verizon-response-to-fcc-throttling-letter

 

[iF34R]

I wonder what the speeds will get throttled to, if this holds up.

 

[kenroberts83]

Give me some proof to back up this assertion. Cuz right now, what you're saying is "the FCC doesn't have the legal authority to regulate what the FCC was designed to regulate".

Sure thing, **************************. http://online.wsj.com/news/articles/SB10001424052702304049704579320500441593462

"Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such," Judge David Tatel wrote for the court."

Like I said, the FCC does not have the authority to regulate companies that are not classified as common carriers. Which, again, is basically what they're trying to do by preventing throttling.

You mean like cable and broadcast TV, satellite, cellphones, etc. etc. All things that were flourishing up until the advent of the internet interrupted their once secure business models?

I don't know what world you live in where TV was ever flourishing. In most neighborhoods in America, you get one choice of cable provider. It's always been that way. What is this innovation in television that you speak of? The advent of color TV? Or perhaps HDTV, which took like a decade, and is still not even on half of television channels? There is not even a remote comparison to the rapidly evolving internet sector. There is a reason Steve Jobs targeted the TV industry for disruption, it is an obsolete dinosaur of an industry.

A common carrier is simply a middle man between the innovative companies, and the people wanting to use them. In terms of the internet, they're the people lying between Netflix, Apple, Amazon, and you. They don't have to be innovative in the sense that they don't have to offer you anything unprecedented. They're innovative in a more low key, less noticeable way. They have to make sure they're on the cutting edge of technology to get you to the innovative sectors as smoothly and quickly as possible.

If I wanted your middle man, I'd hire him myself. Kindly bugger off with your attempt to run the lives of other people. You're attempting to fix a system that isn't broken, based on hypothetical issues, and you're very likely to actually break the system in the process. No thanks. IF there ever develop ACTUAL problems that threaten the integrity of the internet, then perhaps we can consider legislation. A regulated internet is not something that we need today, and is probably not something that we'll ever need.

And like I said before, it's not so much how much you get, as when you get it. Download 35 gigabytes usually takes me about an hour and 45 minutes (give or take) on my 50 megabit connection. If I were to do that between 1 and 3 AM, I have a substantially less chance of congesting the network than I would doing so during peak hours. If I do that between 1 and 3 AM every day, I'll have downloaded my gigabyte of data, without costing the telcos a single red cent, or inconveniencing anybody.

Perhaps you should write a letter to Verizon then, and convince them to change their business model. You absolutely have no foot to stand on in your complaint here. There are several competitors in the telecom industry. You're free to switch. This is nothing like your local cable-operator, who is kept in place by government-enforced monopoly rights (thanks regulation).

 

[unplugme71]

You still get unlimited data as in no overages which is what that plan was sold as, not as unlimited speed.

Sure throttling everyone would work, but if throttling some while not the rest is helpful enough then why affect everyone?

----------

Why are you under the notion that it's all BS based on just how you understand it or what a single friend told you? It's not necessarily BS or not all BS at least.

Actually, the unlimited wasn't truly "unlimited". I found a contract that states I can be charged going past 5GB/mo even on my unlimited plan. Read this with AT&T and Verizon back in 2006 or 2007.

 

[C DM]

Actually, the unlimited wasn't truly "unlimited". I found a contract that states I can be charged going past 5GB/mo even on my unlimited plan. Read this with AT&T and Verizon back in 2006 or 2007.

Well, in that case, even more so. It's not just about a word being used in the name of the plan, it's about the deals (terms and conditions) of the plan that you were getting.

 

[Renzatic]

Sure thing, **************************. http://online.wsj.com/news/articles/SB10001424052702304049704579320500441593462

"Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the commission from nonetheless regulating them as such," Judge David Tatel wrote for the court."

Like I said, the FCC does not have the authority to regulate companies that are not classified as common carriers. Which, again, is basically what they're trying to do by preventing throttling.

Read that again. Nowhere does it say that the FCC is expressly forbidden from classifying broadband providers as common carriers entirely. It's that the way the FCC previously classified them as information services that prevents them from enforcing common carrier rules against them. That's why it failed. Not because the FCC lacks the authority as a whole, but because they didn't call a duck a duck, and were limited in what they could do by law because they chose not to call that duck a duck.

Information services, as they were previously classified by the FCC, are not common carriers, ergo they can't be held to the standards and restrictions of a common carrier. All the FCC has to do is classify them as common carriers, and they're suddenly bound to those rules and restrictions. Something Wheeler has threatened to do previously, but has yet to commit to because, well...he's an ex-telco lobbyist.

I suggest reading up on it again.

If I wanted your middle man, I'd hire him myself. Kindly bugger off with your attempt to run the lives of other people. You're attempting to fix a system that isn't broken, based on hypothetical issues, and you're very likely to actually break the system in the process. No thanks. IF there ever develop ACTUAL problems that threaten the integrity of the internet, then perhaps we can consider legislation. A regulated internet is not something that we need today, and is probably not something that we'll ever need.

...run the lives of other people? What the fuuuhh...

ANYWAY. You're on the internet talking to me right now, correct? Then you've already hired that middle man. That's what broadband providers are. Middle men between you and the internet as a whole. By allowing them free reign to monopolize how that data gets from there to you, you've introduced a flaw in the system, one that will at some point be taken advantage of at our expense, if history is anything to go by.

I'm not talking about regulating the internet or controlling what people see. Quite the opposite. I'm talking about allowing anyone on both sides of the last mile free access to it without the telcos abusing their position as the keepers of that gateway. That's what net neutrality does.

Perhaps you should write a letter to Verizon then, and convince them to change their business model. You absolutely have no foot to stand on in your complaint here. There are several competitors in the telecom industry. You're free to switch. This is nothing like your local cable-operator, who is kept in place by government-enforced monopoly rights (thanks regulation).

Listen, I'm not saying anything about anyone's business model, pro or con. I'm just explaining to you how you're wrong. It's very simple: heavy data users don't necessarily cost telcos any more money than low data users, depending on when they use the network. I thought I was pretty straightforward about that.

 

[Jumpie]

Is this a serious question? You asked me why I said that net neutrality was struck down by the courts, and then agreed that net neutrality was struck down by the courts. I'm guessing reading comprehension isn't your strong suit. I'll repeat my earlier comments for those interested.

"Considering that net neutrality was struck down by the courts, I wouldn't put a lot of stock in enforceability of FCC internet regulations."

If the FCC attempts legal action against Verizon on the basis of the 700 MHz auction agreement, it is very possible that the courts will determine that agreement to have been outside of the scope of the FCC's legal mandate.

Yes, I can read and comprehend. They are two completely separate things.

 

[campyguy]

Though the money part is funny around here.

People will grab their torches and pitchforks to support Apple charging a ridiculously high premium and get an unheard of profit margin per device. They'll brush off all the rumors of the Apple negotiating with the cell companies to increase the price of iPhone 6 by $100 (those cell companies are arguing on the customer's behalf by the way.) They'll ignore Apple $100 for a $11 dollar increase in flash memory and insisting the smallest device is still 16 MB.

But if a cell company does anything that somehow seems like they want an extra nickel, people write 11 pages of how evil cell phone companies are.

Your post and rationale are pretty clear, and fair. Thanks.

I'm still not happy with VZW's decision, however. What I want is data at a fair price, and consumers are being gouged IMO.

A friend, a former coworker at a mid-sized engineering firm here in Portland has two VZW lines, one personal and one for work, both covered under his company plan. His personal line was secured about 4 months ago, a new iPhone 5S. UL data (under the corporate umbrella) with mobile hotspot included, UL minutes, UL texting - $56 before the discount, $43 after the discount plus taxes. He's used about 25-30GB of data each month; he related that a few of his coworkers use 100GB of data regularly. His firm has their own rep. They're buying subsidized smartphones.

Data's cheap - I'm on the same trunk line for my cable ISP (business class) as the tower that serves my home office. UL data @ $110 per month, I went through 2TB of data last month (up and down) - let's call it 10 cents per GB. VZW (and other carriers) charge $20-$40 per GB of data, which is roughly 20,000-40,000 per cent markup. That shouldn't be legal IMO - it is, after all, public airspace and right-of-way that those GB of data flow through. My work, when Federal code is involved, gets restricted by the FTA - and I get audited - if I overcharge, I have to return any excess charges.

Wheeler's asking a few good questions, but any final decision will likely end up as some pablum-fed, dumbed-down response like "Aw, shucks, uh, OK, whatever - go ahead and fsck over your customers. And, thanks for that big check - now I can buy my wife a shiny smartphone!"

Fair is good, but it's business. VZW didn't lower their costs when they sold $4B of unused spectrum tucked deep in the recesses of their colon. VZW gripes and moans about "congestion", but they won't lay any new fiber backhaul (I know some of their field engineers...). VZW has loyalty deals, and I might sign up for one or two of my 53 lines (I don't qualify for corporate-liable - I need 17+ more lines) for a loyalty deal, as I've only been with them for 8 years. I'll be biting the bullet and taking 30-40 of my lines to pre-paid - if I have to monitor my accounts, I might as well use Cricket or Go-Phone. Hey, at least my VZW iPhones and iPads are unlocked!!!

 

[unplugme71]

Well, in that case, even more so. It's not just about a word being used in the name of the plan, it's about the deals (terms and conditions) of the plan that you were getting.

I wasn't aware carriers can change the definitions of words. I'm going to give away free homes to every citizen!



* Terms and Conditions *
Citizens must be made of gold and provide 140% of total monthly mortgage payments for the entire duration of living.

 

[C DM]

I wasn't aware carriers can change the definitions of words. I'm going to give away free homes to every citizen!



* Terms and Conditions *
Citizens must be made of gold and provide 140% of total monthly mortgage payments for the entire duration of living.

They didn't change definition of words. You still get unlimited data, the terms and conditions is what applies to the actual details.

And yes plenty of stuff in fine print (and in this case it's not even in fine print) in much more important contracts in life, like house purchases, loans, etc., and somehow people have been living with all those just fine for ages.

If you really want to talk semantics, names of things are just names of things. When you get the sports package for your car does that mean it comes loaded with sports equipment or can play football or something? Come on. Is any of this really new to anyone or are people just like to argue for the sake of it knowing reality full well given that they live in it when it comes to everything else, but surely it can't be just like that for wireless carriers suddenly.

 

[unplugme71]

They didn't change definition of words. You still get unlimited data, the terms and conditions is what applies to the actual details.

And yes plenty of stuff in fine print (and in this case it's not even in fine print) in much more important contracts in life, like house purchases, loans, etc., and somehow people have been living with all those just fine for ages.

If you really want to talk semantics, names of things are just names of things. When you get the sports package for your car does that mean it comes loaded with sports equipment or can play football or something? Come on. Is any of this really new to anyone or are people just like to argue for the sake of it knowing reality full well given that they live in it when it comes to everything else, but surely it can't be just like that for wireless carriers suddenly.

I think people are tired of being lied to or led on to believe. I also think the legal terms get so confusing and fall into a gray area that its hard to even understand or argue it. Companies use it to protect themselves from consumers and government.

I bet 90% of customers don't even know some ISPs have an anti-class action suit clause.

 

[C DM]

I think people are tired of being lied to or led on to believe. I also think the legal terms get so confusing and fall into a gray area that its hard to even understand or argue it. Companies use it to protect themselves from consumers and government.

I bet 90% of customers don't even know some ISPs have an anti-class action suit clause.

It sounds like people should be tired of being ignorant and work on changing that more than anything else.