Verizon's plan to throttle LTE speeds draws scrutiny from FCC chairman

Posted:
in iPhone edited August 2014
Verizon is planning to restrict LTE data speeds of customers still holding on to unlimited data plans, but the program has "deeply troubled" FCC Chairman Thomas Wheeler, who sent a letter to the carrier asking for clarification on the new policy.


FCC Chairman Thomas Wheeler


As part of its "network optimization" initiative, Verizon plans to slow down 4G LTE data speeds for subscribers with unlimited data plans when the network is particularly congested.

In response, U.S. Federal Communications Commission Chairman Wheeler sent a note to Verizon CEO Daniel Mead on Wednesday, voicing concern over the change and requesting that a few questions regarding the policy be answered. A copy of the letter was obtained by GigaOm.

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

Specifically, the carrier plans to start limiting customers who "fall within the top 5 percent of data users on our network, have fulfilled their minimum contractual commitment, and are on unlimited plans using a 4G LTE device." Under the terms, slated to take effect in October, these users may see slower data speeds when performing high bandwidth operations like high-definition video or gaming apps.

The practice, known as throttling, has been a major concern for both consumers with grandfathered-in unlimited data plans and carriers that can apparently no longer deliver on their promises.

"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.

Wheeler also asks three questions of Mead:
  1. 1. What is your rationale for treating customers differently based on the type of data plan to which they subscribe, rather than network architecture or technological factors? 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% of data users, you can switch to a usage-based data plan as customers on usage-based plans are not impacted."
  2. 2. Why is Verizon Wireless extending speed reductions from its 3G network to its much more efficient 4G LTE network?
  3. 3. How does Verizon Wireless justify this policy consistent with its continuing obligations under the 700 MHz C Block open platform rules, under which Verizon Wireless may not deny, limit, or restrict the ability of end users to download and utilize applications of their choosing on the C Block networks; how can this conduct be justified under the Commission's 2010 Open Internet rules, including the transparency rule that remains in effect?
Before the smartphone -- and subsequently the cellular-connected tablet -- caught on, providers offered unlimited data plans alongside the devices as a way to spur sales in an unknown market. With popular products like the iPhone, smartphone use exploded, causing cellular data consumption rates to rapidly increase. Carriers were left with an infrastructure not equipped to deal with the unexpectedly high data demands, prompting the use of stop-gap practices like throttling.

Unlimited data contracts were quickly quashed, but subscribers already on the most-expensive plans were allowed to keep them as long as monthly payments continued. The rollout of speedier next-generation cellular technology like 4G LTE effected even faster data consumption rates.

For its part, Verizon claims throttling will help give the other 95 percent of its customers a consistent usage experience, saying the policy affects only a small number of people.

"What we announced last week was a highly targeted and very limited network optimization effort, only targeting cell sites experiencing high demand," Verizon said in a statement provided to Re/Code. "The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don't limit capacity for others."

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Comments

  • Reply 1 of 37
    It is time for companies to honor their obligations or get fined. Companies should not be allowed to alter the terms of service whenever they want but not allow users to alter the terms of service regarding the cell phone carriers.

    This is a good sign that the FCC is leaning toward Net Neutrality.
  • Reply 2 of 37
    Companies fleecing their customers. Again.
  • Reply 3 of 37
    gilly33gilly33 Posts: 237member
    Good for you FCC.
  • Reply 4 of 37

    This is remarkable.  Very nice to see the FCC directly advocating for consumers.  Bravo.

  • Reply 5 of 37
    Let them spend the necessary money to accommodate the changing consumer demands. Why put the onus of profitability on the backs of their customers. Looks like communal punishment to me.
  • Reply 6 of 37
    [privately] 4) How exactly will my eventual salary and bonus be impacted [when I leave the FCC and am hired back by the industry] if I can make this issue go away without you looking like the douchebags you are?
  • Reply 7 of 37
    They are grandfathered in and technically not in a contract status. I'd say verizon is extending unlimited as a courtesy. Granted I do think its total bs. Like this is really gonna make a difference on their towers. Just not sure there's much weight with the FCC inquiry given these people are no longer under contract. VZW could end unlimited anytime.
  • Reply 8 of 37
    "Honor their commitments" - can someone help me understand, didn't these contracts end long ago? What prevents Verizon from saying fine, we were trying to be gracious, but we are just eliminating the "unlimited" plans? Other than turning away the users that may walk to Sprint because of it?
  • Reply 9 of 37

    They're full of crap. When AT&T decided to turn my "grandfathered" so-called unlimited plan into a 2GB plan by throttling so brutally that even getting email became impossible, I filed complaints with the PUC and the FCC, and I got a very polite reply (6 months later) explaining to me that there was nothing they could do. I switched to T-Mobile and everyday I tell myself how lucky I am to have made that move. Ahole carriers like AT&T and Verizon pull these stunts all the time, just because they can -- you can't even sue them, thanks to the arbitration clause they put in their contracts. Considering the recent shenanigans the FCC pulled with net neutrality, I'm willing to bet this is total posturing and they won't actually be doing shite to protect the consumer. But hey, prove me wrong, FCC. And defend net neutrality while you're at it.

  • Reply 10 of 37
    Quote:


     "..and that high users don't limit capacity for others."


     

    Lol. So its the stoners' fault again.. /s

  • Reply 11 of 37
    "fall within the top 5 percent of data users on our network,"

    Likely that is anyone who streams one 30 minute show per day, maybe even once per week !
  • Reply 12 of 37
    "Considering the recent shenanigans the FCC pulled with net neutrality, I'm willing to bet this is total posturing"


    Got to agree LordJohnWhorfin.

    Fact is that with Netflix now havin to pay AT & T, Netflix expect most newcomers to be forced out.
    This has just removed most US competition with all non Netflix users etc losing big time. Netflix users also lose as they get to have less choice/higher fees.
  • Reply 13 of 37
    yvo84yvo84 Posts: 84member
    Quote:

    Originally Posted by Sprint3GIssues View Post



    "Honor their commitments" - can someone help me understand, didn't these contracts end long ago? What prevents Verizon from saying fine, we were trying to be gracious, but we are just eliminating the "unlimited" plans? Other than turning away the users that may walk to Sprint because of it?

     

    The contract is meant to lock someone into the plan for a period of time (like 24 or 36 months). After that, the plan they're on is supposed to continue, unless they sign onto a new plan. The benefit of signing onto a new plan is you get a new phone for free or for a subsidised amount. Otherwise, you just pay month to month on your original plan.

  • Reply 14 of 37
    negafoxnegafox Posts: 480member

    That's nice, FCC. How about investigating why customers are paying through the nose for very limited data caps for wireless carriers? Is there price collusion going on between the major cell phone carriers on why their plans seem almost identical?

  • Reply 15 of 37
    alphafoxalphafox Posts: 115member
    So you guys are ok with having crap data speeds if you are in a congested area because a few unlimited users are downloading crazy stuff and abusing their unlimited data? I would prefer if they get temporarily throttled in that circumstance so everyone has fair access to the frequency. There should have never been unlimited plans anyways IMO, people should be encouraged to save bandwidth / frequency rather than a free unlimited buffet.
  • Reply 16 of 37
    It's time these carriers stop treating 5GB a month like it is some obscene amount of data that only someone abusing the network will use. I hit between 4 and 5GB a month consistently under normal usage. No tethering and using wifi at home and in the office. With the way the iPhone updates apps and other apps that continually refresh data the phone moves a lot of bits. Plus LTE lets you move 100 or more megabytes of data without even breaking a sweat.

    Thankfully I moved to T-mobile who has never once given me a single problem about my usage and has constantly done things to lessen what data usage counts against my plan like not counting streaming music from all major music services and even throwing in tethering so I don't have to feel like I'm breaking the law just to use my phone as a modem for my computer.
  • Reply 17 of 37
    negafoxnegafox Posts: 480member
    Quote:

    Originally Posted by sog35 View Post

     

     

    A 100GB cap would be reasonable.

     

    Problem is companies are putting caps at 5GB which is normal use IMO.


    Not only are we paying outrageous prices per GB for wireless carriers, we are also told what we can and cannot do with it. Why do I have to pay extra for tethering? This is not a carrier specific feature.

  • Reply 18 of 37
    freediverxfreediverx Posts: 1,405member

    Don't get your hopes up. This pushback against Verizon is just political theater and it will go nowhere. Let's not forget who Tom Wheeler is: venture capitalist, former top lobbyist for the cable and wireless industries (National Cable Television Association and Cellular Telecommunications Industry Association.) This is a guy who in 2011 argued that the government should approve a merger between AT&T and T-Mobile, before said merger was killed by his predecessor, Julius Genachowski. 

     

    Since that merger was blocked T-Mobile acquired additional spectrum from AT&T, successfully merged with MetroPCS to give it enough spectrum to compete with Verizon and AT&T nationwide, and has turned the wireless industry on its head by ditching wireless contracts and giving consumers different payment options for their wireless devices.

  • Reply 19 of 37
    radarthekatradarthekat Posts: 3,012moderator
    alphafox wrote: »
    So you guys are ok with having crap data speeds if you are in a congested area because a few unlimited users are downloading crazy stuff and abusing their unlimited data? I would prefer if they get temporarily throttled in that circumstance so everyone has fair access to the frequency. There should have never been unlimited plans anyways IMO, people should be encouraged to save bandwidth / frequency rather than a free unlimited buffet.

    Bandwidth, like an unused appointment slot at a hair salon, is an expiring asset. There's no reason not to want to use the full capacity at all times. Use it or lose it to Father Time. Having said that, Verizon's way out of this fuss with the FCC is to just come back and restate their policy to apply to all customers, regardless of data plan. "At certain times and in certain locations where our network comes close to saturation, we will throttle any customer who at that time while using those saturated assets is consuming a large amount of data." Something like that. This would remove the FCC's objection regarding VZ playing prejudice against a segment of their customer base, while achieving essentially the same result. After all, it's mostly those with unlimited data plans who would be downloading massive amounts of data, so it's mostly those who would be affected, just without VZ saying as much. I'm a VZ customer on a month to month grandfathered unlimited data plan. I keep it even though I don't often utilize a lot of data, but its a relatively inexpensive plan that let's me use whatever data I need without worry, which is great when I'm traveling and therefore not always connected to wifi. If I'm throttled at some point when data traffic is high where I'm located and I can't get on wifi, well, that's not going to end my life.
  • Reply 20 of 37
    Quote:
    Originally Posted by alphafox View Post



    So you guys are ok with having crap data speeds if you are in a congested area because a few unlimited users are downloading crazy stuff and abusing their unlimited data? I would prefer if they get temporarily throttled in that circumstance so everyone has fair access to the frequency. There should have never been unlimited plans anyways IMO, people should be encouraged to save bandwidth / frequency rather than a free unlimited buffet.

     

    The problem is they aren't making any correlation between throttling unlimited data users based on their actual usage in total or on their usage at peak times. You could have a guy that does most of his network usage between midnight and 3am when it impacts no one and he gets throttled while trying download an attachment during the day while racing to catch a connecting flight simply because he has an unlimited plan.

     

    As long as you are not breaking any of the terms of service you are never abusing an unlimited plan. The person using as much data as they like on a plan they were offered and paid for should not be made to feel like second class citizen. Any carrier that points at these customers and blames them for their network congestion should be sued for libel and slander. Its not the user's fault there is congestion. It is the carriers' fault for over subscribing their capacity. They were offered a service that the carrier was contractually obligated to provide and made hefty profits on at a time when network usage was not prevalent as it is today. The reality is, it is the tiered data customers that came after the unlimited plan customers that caused the strain on the network. 

     

    Imagine if McDonalds had a sale and they said if you come in by 1pm and you buy a big mac for full price you can get the second big mac for 25¢. Then say 200 people come in by 1pm.  Seeing that they will have to make 400 big macs the manager starts getting nervous because they only have supplies to make 500 big macs a day and they did not anticipate such a large turn out for this sale. After fulfilling some of the orders for customers that bought two the manager then starts asking customers if they would accept a voucher to come back for their second big mac tomorrow because they won't have enough big macs for the rest of their customers that day. Some customers accept the voucher while some still insist on their second big mac for 25¢. After the sales period is over the regular customers start ordering single big macs at regular price and the store very quickly runs out.

     

    When the next customer in line orders a big mac the manager takes his money then tells him there are no more big macs because these greedy bastards came in and bought them all while pointing at the customers in the dining room that are enjoying their 2 big macs. When the new customer looks at him and says "but I just paid you for 1 big mac," the manager says "you can come back tomorrow and you can have your big mac then, we simply don't have the supplies to make more big macs today, because these greedy bastards bought all our inventory during our sale." The confused customer takes his voucher for his delayed big mac and leaves. This goes on for a while until new customers are demanding the store provide them with the big macs they are taking their money for and then telling them they can't provide and not offering a refund just a delay in providing the big mac.

     

    The manager at this point is realizing all the revenue he lost by not selling those 25¢ big macs for full price and seeing the stress it is causing his new customers by not having them to give, decides to rush into the dining room and start screaming at all the patrons enjoying their two big macs purchased during the sale and snatching them off their tables, telling them they are fat and greedy, damaging McDonald's good name and hurting all the future customers that just want a big mac. He then proceeds to give the snatched big macs to the new customers and collects their money.

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