FCC Is 'Deeply Troubled' By Verizon Wireless's New Throttling Plans

from the not-so-fast-with-that-'network-optimization' dept

Thu, Jul 31st 2014 7:51am — Mike Masnick

Earlier this week, we wrote about the ridiculousness of Verizon Wireless refering to its new plans to throttle heavy users of its LTE mobile data network as "network optimization" while denying that it was "throttling." However, in a bit of a surprise move, FCC chair Tom Wheeler has sent a rather angry letter to the company, questioning the plan:

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 20 14. Your website explained that this was an extension of your "Network Optimization" policy, which, according to your website, applies only to customers with unlimited data plans. Specifically, Verizon Wireless "manage[s] data connection speeds for a small subset of customers - the top 5% of data users on unlimited data plans" in places and at times when the network is experiencing high demand. Verizon Wireless describes its "Network Optimization" as "network management."

"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. The Commission has defined a network management practice to be reasonable "if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service." Such legitimate network management purposes could include: ensuring network security and integrity, including by addressing traffic that is harmful to the network; addressing traffic that is unwanted by end users (including by premise operators), such as by providing services or capabilities consistent with an end user's choices regarding parental controls or security capabilities; and reducing or mitigating the effects of congestion on the network. 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.

The letter then has a list of questions it is expecting Verizon to answer concerning this program. The third question may be the most important:

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?

This is, in some ways, a follow up to Wheeler's letter last week, in which he reminded access providers of those transparency rules. Wheeler has shown, a few times, that he's willing to speak up against the actions of some of the broadband companies, which is a shift from previous FCC chairs. Of course, many are still reasonably skeptical about how much bite there is behind the bark, but it's at least a marginally good sign that he's paying attention and worried about this plan.

Still, remember, that the "open internet rules" leave out wireless networks, a massive loophole that many of us warned about all along. However, in the current proposal, Wheeler did ask about whether the rules should extend to mobile operators as well, and this letter is a pretty clear signal that he sees very clear reasons to include such networks in the final rules.

235485290 VZW Letter 07 30 14 (PDF)235485290 VZW Letter 07 30 14 (Text)

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Filed Under: fcc, net neutrality, network optimization, open internet, throttling, tom wheeler, transparency, wireless
Companies: verizon, verizon wireless

35 Comments

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Violynne (profile), 31 Jul 2014 @ 6:45am

This news is starting to piss me off, so let's get the facts out of the way.

First: Verizon is not charging people to pay to remove the throttle. It's simply reducing speed. So the notion this is a bold attempt at more revenue is simply wrong.

Second: Why is this letter not being sent to T-Mobile, who does the exact same thing at 2GB, regardless of network usage?

I'm sure those 5% will hate the throttling, but it's not like they're being capped, which is complete different and is a revenue-generating ploy.

I'll remind people: Unlimited data doesn't mean unlimited speeds. If this were the case, THE FCC SHOULD BE SENDING THIS LETTER TO EVERY TELCO AND ISP.

I'm siding with Verizon on this one. Nothing sucks worse than my service being interrupted by people who think it's funny to download the latest cat video from YouTube in HD.

There's only so much room in the LTE spectrum now that most of us are on it.
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John Fenderson (profile), 31 Jul 2014 @ 7:58am

Re:
"it's not like they're being capped, which is complete different and is a revenue-generating ploy."

The two things are distinct, but it's misleading to say they're "completely different". Throttling is a kind of usage cap, and reducing connection speed can be a back door way of imposing data caps.
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Anonymous Coward, 31 Jul 2014 @ 8:02am

Re:
"Second: Why is this letter not being sent to T-Mobile, who does the exact same thing at 2GB, regardless of network usage?"

Because T-Mobile is doing it for ALL users, not specifying any particular plan. It's been deemed necessary and is uniformly being done rather than specifically targeting a group on a plan they don't like.

"I'm siding with Verizon on this one. Nothing sucks worse than my service being interrupted by people who think it's funny to download the latest cat video from YouTube in HD."

I'm siding with the 1GB or 10GB a month isn't going to affect their servers. That amount of data in that long of a time period is stupid to argue over as that can be transferred without any significant disruption of their network.

If the ISPs would spend half the money they say they will on upgrading their networks the entire country would be running faster and there wouldn't be bandwidth issues. Verizon aside, America isn't where they should be on connection speeds.
http://en.wikipedia.org/wiki/List_of_countries_by_Internet_connection_speeds
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Michael, 31 Jul 2014 @ 8:03am

Re:
First: Verizon is not charging people to pay to remove the throttle. It's simply reducing speed. So the notion this is a bold attempt at more revenue is simply wrong.

Incorrect. If you purchase a tiered plan in set amounts of data and pay for data overages if you exceed the plan amounts, you will pay more and YOU WILL NEVER GET THROTTLED BY THIS PLAN. It drives people to specifically capped plans where Verizon makes more money.

Second: Why is this letter not being sent to T-Mobile, who does the exact same thing at 2GB, regardless of network usage?

T-Mobile did not just release a press release to talk about how great their plan is for their customers.

Nothing sucks worse than my service being interrupted by people who think it's funny to download the latest cat video from YouTube in HD.

Your service being interrupted by the activity of other users is BECAUSE VERSION OVERSOLD THEIR NETWORK. I cannot say this more clearly, they have sold you a certain amount of bandwidth and are not able to provide it. Your suggestion that it is ok for them to take that bandwidth from someone else - if they are allowed to do it - will backfire on you some day when they decide it is your turn to give up something they have oversold.
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Michael, 31 Jul 2014 @ 8:09am

Re: Re:
it's not like they're being capped

Actually, they ARE being capped.

Basic math. If you have purchased an unlimited 5mb/s plan, you have purchased 5mb/s * # seconds in a given month of data. If they throttle you to 2mb/s half way through the month, they have effectively taken back 30% of what they sold you.

If you bought a 5 pound bag of coffee and in the middle of the month someone walked into your house and took a pound of it back, how pissed would you be?
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Anonymous Coward, 31 Jul 2014 @ 8:12am

Re:
You've missed Wheeler's point.

Verizon's proposed plan for throttling is specific to it's grandfathered in unlimited users.

Which is to say that if a person with usage based caps was in the top 5% of data users, their connection speed would not be reduced, while someone that has a grandfathered unlimited plan in the top 5% of data users would be throttled.

That's unjustifiable under "network management" as both users are having the same impact on the network. They should either both have their speed reduced, or neither have their speed reduced.

It's seen as an attempt at more revenue because of this statement from Verizon:

"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."

Aka, telling people with unlimited plans that if they don't like their connection speeds being throttled, they can just switch to more expensive, but less useful usage based plans. It also confirms that people with usage-based data plans will not have their speeds reduced, even if they're in the top 5% of data users.
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Anonymous Coward, 31 Jul 2014 @ 8:14am

Holy crap, that almost seems like effort being expended from the FCC.

Their warning-letter department may need to bring in temporary staff to handle the increased volume.
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pixelpusher220 (profile), 31 Jul 2014 @ 8:20am

Re:
re: T-Mobile
"Second: Why is this letter not being sent to T-Mobile, who does the exact same thing at 2GB, regardless of network usage?"

because T-Mobile tells you this as part of your contract, hell it's in their advertising. Verizon said nothing of this only that the plans were 'unlimited'. Now, later, Verizon is changing the rules on those 'unlimited' plans.
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Anonymous Coward, 31 Jul 2014 @ 8:29am

on the one hand, it should be concerned. on the other, however, it caused this to happen so bring in sensible rules to prevent it! the FCC and Wheeler in particular should know that all the ISPs, Telcos and cable companies will find whatever ways they can to bring in greater profits. if they use proper business methods to help, all well and good, but when they use extremely questionable tactics that make, for example, customers pay more than once for the same service, it has to be stomped on fast and from a great height!!
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Anonymous Coward, 31 Jul 2014 @ 8:40am

Re:
This is all about forcing unlimited users off unlimited plans and onto more expensive and heavily capped plans.

Here's a good example of why their argument that this isn't about revenue generation is absurd.

Take two users, one paying $30 per month for unlimited service and another paying $50 per month for 1GB with $10 per GB overages. If both of those users are doing exactly the same thing (downloading a large file, for example) at exactly the same time during a period of network congestion, which of those two users is causing the network congestion? Fortunately, this isn't a trick question. Both users are contributing to the network congestion. The money payed by users to access the network at any point in time is not a contributing factor to the network congestion itself.

So, in Verizon's solution to force unlimited users to switch to a capped plan, how does that impact the example above if the unlimited user switches to the same plan as the other user? Now, those users, both on $50 per month for 1GB plans, are again downloading a file at exactly the same time and the network is congested. No one is throttled under this situation and the network remains congested. In fact, if there were no unlimited users at all under this policy, network congestion would never be alleviated because no one would be throttled.

If throttling is a legitimate mechanism to alleviate congestion, then you need to throttle everyone equally. Verizon is simply using network congestion as an excuse to push unlimited users onto more expensive plans.
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Sheogorath (profile), 31 Jul 2014 @ 8:40am

Re: Re:
Especially if customers are then made to pay more money for extra data to restore their 'unlimited' plans. If those customers are on contracts, can't they sue Verizon for breach?
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ThatFatMan (profile), 31 Jul 2014 @ 8:44am

Is that a spine or are you happy to see me
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Sheogorath (profile), 31 Jul 2014 @ 8:46am

Re:
Unlimited data doesn't mean unlimited speeds.

Well, duh.
Nothing sucks worse than my service being interrupted by people who think it's funny to download the latest cat video from YouTube in HD.

We don't download cat viceos in HD, we watch music videos in HD. Simples!
There's only so much room in the LTE spectrum now that most of us are on it.

Hmm, I wonder how Three Mobile manages to provide All-You-Can-Eat data to those who can afford it?
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Michael, 31 Jul 2014 @ 8:54am

Re: Re:
which of those two users is causing the network congestion?

It IS a trick question. Neither of these two users is causing network congestion, it is Verizon's oversold network that is causing the congestion. Neither of these customers is taking more bandwidth than they have purchased.

In fact, if there were no unlimited users at all under this policy, network congestion would never be alleviated because no one would be throttled.

Not true. The network has a fixed amount of bandwidth. If nobody is being throttled by some kind of throttling rule, packet collisions will average out to basically throttling everyone by the same amount. Exactly how it should work. They should then be watching their network for packet collisions and fixing the places in the network with a problem - that is called basic network maintenance.
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Chronno S. Trigger (profile), 31 Jul 2014 @ 9:07am

Re: Re:
Sprint has unlimited data as well. Far as I can tell, they've always had unlimited and never even bothered to try and hide it.

T-Mobile offers unlimited data, but you have to hunt for it. I had to spend about 5 minutes explaining to the rep on the phone exactly what I wanted before they offered it to me. They advertise an unlimited plan, but it caps at 7G. You have to ask specifically for the one that doesn't cap.
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Digger, 31 Jul 2014 @ 9:13am

@Violynne
You... Are... An... Idiot...

Of course this is an attempt to extort more money.

This is aimed directly at the people who bought, and continue to pay for their legacy "unlimited" data plans.

Verizon did away with these plans once they figured out how lucrative it is to rape and pillage their customers for hundreds of dollars for just a few gigabits of bandwidth over a month's time.

This is aimed squarely at those holdouts who still use the unlimited plans without letting Verizon fuck them for the privelege.

So yes, go FCC... Go Go Go...

Hell, take it further even - force all cell towers to common carrier status, and watch the prices for "unlimited" fall as more and more companies sell to former big 3 customers.
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Beech, 31 Jul 2014 @ 9:49am

Tom Wheeler Deeply Troubled by Verzion Announcing Their New Throttling Plan Before Their Latest Check Cleared."
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Violynne (profile), 31 Jul 2014 @ 10:01am

Re: Re:
My apologies, as I didn't clarify the T-Mobile issue.

Here's the T-Mobile ToS segment:
"To provide the majority of our customers with a good experience and minimize capacity issues and degradation in network performance, we may take certain steps with our network, including, but not limited to, temporarily reducing data throughput for a subset of customers who use a disproportionate amount of network resources."

It's in EVERY carrier's ToS and the plan has nothing to do with it. Verizon, AT&T, Sprint, and T-Mobile have this clause in their ToS.

Although I've never used more than 2GB of data, I have witnessed with my own two eyes T-Mobile throttling my data during peak times. I've come to expect it and I'm sure as hell not going to complain about it because "simple math" states there's no way the limited resources of LTE can carry the load of millions of users on it. There simply aren't enough towers to handle capacity in a limited spectrum.

Verizon should have just kept its mouth shut and activated the clause without being transparent to its customers.
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John Fenderson (profile), 31 Jul 2014 @ 10:15am

Re: Re: Re:
"Verizon, AT&T, Sprint, and T-Mobile have this clause in their ToS."

This is a case of people who were grandfathered in on an unlimited (as in really, truly unlimited -- not the fake "unlimited" nowadays) plan that Verizon stopped offering quite a while ago. There was no such clause in the ToS with that plan. The plan has everything to do with it.
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Anonymoose, 31 Jul 2014 @ 10:22am

@Chronno Trigger
What are you talking about? T-Mobile's Unlimited Plan is their highest tier. You don't even have to hunt for it.
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Alt0, 31 Jul 2014 @ 10:29am

Dollar says, Wheeler has a Verizon "legacy" unlimited plan.
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Josh in CharlotteNC (profile), 31 Jul 2014 @ 10:43am

Re: Re: Re:
Not likely, as the contract they signed almost certainly had a "forced arbitration with Verizon's chosen Verizon-friendly arbitrator who has ruled in Verizon's favor over 99% previously" clause.
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Anonymous Coward, 31 Jul 2014 @ 10:49am

Re:
As I said before, this action conflates two completely different metrics that are not necessarily related. Monthly bandwidth usage with current incidental bandwidth usage. They offered unlimited service to get customers initially and now they are trying to find any excuse they can to make that service suck to the point where they will switch their plan to one with caps that allow them to generate extra revenue.
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Digger, 31 Jul 2014 @ 11:40am

Re: Re: Re: Re:
Good thing those "forced arbitration clauses" aren't worth the bits used to display them on the EULA you have no chance to refuse.

Sue the fuck out of Verizon, make sure not to use lube either, and squirt some superglue in there as you pull out for ultimate discomfort on Verizon's part.
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Digger, 31 Jul 2014 @ 11:43am

Re: Re: Re:
@Violynne

Again, you just keep... missing... the... point...

The "unlimited" plans had no data caps, no throttling, no limiting terminology in the contract.

Verizon "CANNOT" change the contract without the consumer's consent.

This is where Verizon fucked up, and you keep defending them.

Are you a Verizon shill or just really that fucking stupid?
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Josh in CharlotteNC (profile), 31 Jul 2014 @ 12:18pm

Re: Re: Re: Re: Re:
There really hasn't been serious challenges to clickwrap EULAs, cause no side is really willing to put them to the test.

But mobile contracts that you generally sign at the store when you buy your phone are another matter and are much more enforceable in this respect.
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toyotabedzrock (profile), 31 Jul 2014 @ 1:06pm

He is pretending to be upset while mobile providers cut pay by site deals. He is just trying to divert everyones attention.
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JP Jones (profile), 31 Jul 2014 @ 1:07pm

Re:
so let's get the facts out of the way.

Facts out of the way? Why would you want to do that? The facts are the good part! Let's start now...

"First: Verizon is not charging people to pay to remove the throttle. It's simply reducing speed. So the notion this is a bold attempt at more revenue is simply wrong."

Verizon is not charging people to pay to remove the throttle. They're just only throttling the people who don't pay extra (via caps). So I guess you're right...Verizon isn't charging you to remove throttling, they're just throttling you if you don't pay extra. Oh, wait. That's the same thing.

Second: Why is this letter not being sent to T-Mobile, who does the exact same thing at 2GB, regardless of network usage?

T-Mobile doesn't only throttle its unlimited data plan members. It's the difference between a road with a speed limit of 55 mph and a road with a speed limit of 55 mph, unless you're driving a BMW, then the speed limit is 65 mph.

The rest of your comment

You say being capped is a revenue-generating ploy, which is the most accurate statement in your entire post, then proceed to completely miss the point on why it's a revenue-generating ploy. Data caps don't solve network congestion.

This entire press release was talking about throttling unlimited data customers, in other words, those without data caps. This naturally encourages them to choose unthrottled data cap plans...which you already stated is a "revenue-generating ploy."

In conclusion, you are siding with Verizon for a revenue-generating ploy. Sorry.
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John Fenderson (profile), 31 Jul 2014 @ 1:12pm

Re:
I find imagining the physiognomy required for this line to make sense endlessly fascinating.
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Anonymous Coward, 31 Jul 2014 @ 3:26pm

Take that John Oliver
Wheeler attempts to prove he is not a dingo
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That One Guy (profile), 31 Jul 2014 @ 3:43pm

Re: Take that John Oliver
Now if he actually wants to prove it, lets see something more than just words. It's easy to say he's against something, quite another to actually act on it.
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Ninja (profile), 1 Aug 2014 @ 4:46am

Re:
Your comments are usually good but this one missed by far. As readers before me noted this is not the users with no caps that are at fault. It's Verizon itself that sold more capacity than they can deliver. I'm inclined to think you'd be quite angry if your provider told you can't load [insert anything here] because "THINK OF THE REST OF THE USERS!". Honestly I don't care about whoever. I paid for a service and I want it delivered. End of the story.
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Anonymous Coward, 6 Aug 2014 @ 1:02am

"Deeply troubled", is probably business-speak for "we want a bigger graft check before we can let you do this."
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angry customer, 16 Oct 2014 @ 2:52am

I hope Verizon is held accountable for screwing their customers that pay the high fees of all users.
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Sar, 16 May 2016 @ 12:41pm

Re:
Verizon contracts with the federal government for agencies issuing government issued phones and hot spot services, ensuring unlimited data. As a government employee, (no matter if it's the first day of contract or 29 days in my billing cycle) I can barely load my email (which can only be checked by government furnished equipment). It takes about 10-15 minutes for every webpage to load due to no other reason other than Verizon throttling. When I am traveling on official business and need to use the hot spot (from my government furnished equipment -with added federal security- through Verizon services), there is no way I would ever be able to VPN into our network in the office anymore due to this throttle. This forces me to have to purchase some sort of jetpack/other hot spot options to do the most basic work functions --which is completely unacceptable.
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