FCC Questions Verizon Plan to Throttle Some Unlimited Data Customers

Federal Communications Commission Chairman Tom Wheeler today sent a letter [PDF via Gigaom] to Verizon Wireless, questioning its plan to throttle customers that have unlimited data plans during peak usage times. Verizon first announced its intention to throttle high-usage customers on grandfathered unlimited LTE plans last week.

In the letter, Wheeler says that he is "deeply troubled" by Verizon's decision to throttle its unlimited users, as the company described its efforts as necessary for "Network Optimization." Wheeler stated that he does not believe slowing the data speeds for select users falls under the "reasonable network management" umbrella.

"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.

Wheeler goes on to ask Verizon to answer a series of questions, requesting that the company explain its rationale for treating customers differently based on data plan type and questioning whether Verizon's new throttling policy is justified under the FCC's Open Internet rules. Wheeler also questions the necessity of cutting data speeds on the much more efficient 4G LTE network.

In a statement to The Wall Street Journal Verizon said that it would respond to the Chairman's letter following a review of the content.

"We will officially respond to the Chairman's letter once we have received and reviewed it," Verizon Wireless said in a statement. "However, what we announced last week was a highly targeted and very limited network optimization effort, only targeting cell cites experiencing high demand. The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don't limit capacity for others."

Verizon plans to begin throttling high-usage LTE customers accessing congested network cells beginning on October 1. The company says the change will only affect users with grandfathered unlimited plans not under contract who rank in the top five percent of data users.

At the time of its announcement, Verizon said that the top five percent consisted of customers who used 4.7GB of data each month, and those customers may experience slow data speeds "when using certain high bandwidth applications, such as streaming high-definition video or during real-time, online gaming" when connected to a cell site "experiencing heavy demand."

Verizon, which has long restricted 3G data usage for unlimited users, is not the first wireless carrier that has implemented LTE usage restrictions for customers on grandfathered unlimited plans. Other carriers, like AT&T, have similar policies and restrict key features from unlimited data plan holders in an effort to encourage them to switch to pay-by-usage tiered data plans.