updated 12:58 am EDT, Sat August 9, 2014
Enquiry expands as throttling 'expands to a business issue' rather than technical hurdle
The FCC has decided to expand its investigation into Verizon's recently-announced changes in "unlimited" data for subscribers into a full review of the entire US cellular industries network management policies, with a particular focus on "throttling" policies and how they are implemented, particularly for customers still on an "unlimited" data plan. The agency is even questioning carriers about why it would need throttling policies on more-efficient LTE networks at all.
First noted by Reuters, a spokesperson for FCC Chairman Tom Wheeler confirmed that letters similar to the one sent to Verizon were also communicated to the other carriers. In the original letter, Wheeler expressed concern that policies of restrictive data usage and throttling on "unlimited" plans are "moving from a technology and engineering issue to the business issues ... such as choosing between different subscribers based on your economic relationship with them."
Verizon triggered the latest probe when it announced it would throttle high-usage data customers who were grandfathered in to LTE speeds but had "unlimited" data caps from previous agreements, at least during peak periods. Customers argue that this is a violation of the terms of their agreements, both in terms of the amount of data consumed as well as the speed of delivery. The FCC is concerned that the policies, which have become much more widespread, may be a violation of agreements the carrier signed with the FCC to prevent exactly this sort of behavior.
Verizon's defense to the charge, in a reply to Wheeler, was simply to point out that other carriers had similar policies -- a rationale the agency rejected out-of-hand. At a news conference on Friday, Wheeler characterized Verizon's response as an "attempt to reframe the issue" and remarked that "'All the other kids do it' was never something that worked with me when I was growing up, and didn't work with my kids."
All the major carriers at one time or another offered "unlimited" data plans in an effort to drive sales of smartphones, but the runaway success of the iPhone (later followed by others) put great pressure on the less-efficient 3G standard, prompting the companies to discontinue "unlimited" plans except for those subscribers who were "grandfathered in" -- and kept paying top-tier prices for the privilege. The congestion in large part spurred the development of "4G" LTE networks, which are much more efficient and should allow for growing bandwidth needs.
The FCC is concerned that the carriers are using the excuse of a small number of high-data users to push customers off their "unlimited" plans into tiered data plans with more caps. While other carriers do indeed have similar policies on throttling to Verizon for their "unlimited" customers, Verizon's response may have touched off what would be an unwelcome broader investigation into whether such measures are actually necessary or are just opportunistic, industry-wide.