In July of 2011, Verizon announced it would no longer offer its wireless users unlimited data plans, and instead began pushing more expensive and capped shared data plans (complete with shiny $15 per gigabyte overage fees!). While Verizon did grandfather existing unlimited customers, like AT&T, it immediately began waging a quiet war on these users, throttling these purportedly “unlimited” connections to try and drive these users toward pricier metered options.
In Verizon’s case, the company started by throttling unlimited customers on its 3G network. When Verizon Wireless announced in 2014 it was going to start applying these “network optimization” practices to its LTE 4G network, the company received a surprise wrist slap by FCC boss Tom Wheeler, who warned the company that he saw through its use of congestion to drive revenue:
“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.”
“[Verizon] responded to the FCC by effectively claiming that everybody was doing it”
As we frequently note, phantom network congestion has long been a useful bogeyman to defend predatory or otherwise anti-competitive behavior in telecom. In Verizon’s case, the company responded to the FCC by effectively claiming that everybody was doing it, something that didn’t sit well with Wheeler in a follow up warning to the company just about a year ago:
“‘All the kids do it’ was never something that worked with me when I was growing up and it didn’t work with my kids,” Wheeler told reporters on Friday. Wheeler said that response wasn’t good enough to calm his concerns that the company was trying to milk users for more profit. “My concern in this instance is that it is moving from engineering and technological issues into business issues,” he said.
Verizon ultimately decided to scrap its plans to throttle unlimited LTE users, and the FCC proceeded to pass tougher new net neutrality rules in February of this year. AT&T, in contrast, tried to push its luck, and continued throttling unlimited users until it received a $100 million FCC fine (which AT&T is still fighting) and was socked with an FTC lawsuit for false advertising (which AT&T is also still fighting). Verizon, meanwhile, quietly continued throttling its unlimited 3G users — until only just last week. Verizon “announced” the changes in a bit of fine print on the Verizon website:
“Beginning in 2011,” it reads, “to optimize our network, we managed data connection speeds for a small subset of customers — those who are in the top 5% of data users and have 3G devices on unlimited data plans — and only in places and at times when the network was experiencing high demand. We discontinued this practice in June, 2015.”
And by “optimize its network,” Verizon means “optimize its revenues.” In speaking to the Washington Post, Verizon claims this was just a run of the…