PhotoIf you have a 4G LTE smartphone with an "unlimited" data plan from Verizon Wireless, be warned: starting in October, Verizon wants to start throttling your data if you're among the top 5% of data users in a given month when your local cell network is undergoing high demand and you have a month-to-month agreement in lieu of a long-term contract.

Sound confusing? Let's backtrack a bit: what ordinary users call data throttling is part of what Verizon Wireless calls “network optimization” (which, according to Verizon, is absolutely not the same thing as throttling; more on that later).

The Verizon Wireless webpage explaining its “Network optimization practices for customers with unlimited data plans” kicks off with marketing-speak about the “reliable” and “high-quality” service it seeks to give its customers:

You rely on our high quality wireless communications service and we strive to continually provide it for you.

Ensuring Reliability. With tens of millions of customers, it’s our responsibility to upgrade and improve our network, services and practices, so you can continue to trust the network. With this in mind, we’ve implemented Network Optimization practices that will affect a very small percentage of customers.

And what exactly are these practices?

Optimizing Our Network. Our Network Optimization practices for customers with unlimited data plans ensure that you can count on the reliable network you expect. To optimize our network, we manage data connection speeds for a small subset of customers – the top 5% of data users on unlimited data plans – and only in places and at times when the network is experiencing high demand. This ensures that all customers have the best data experience possible.

“Manage data connection speeds” in the sense of “lowering those speeds” sounds an awful lot like data throttling. But the frequently asked questions lower down on that same Verizon Wireless page assures customers that it isn't:

Is this the same as throttling?
No, this is not throttling.

How is this different than throttling?
The difference between our Network Optimization practices and throttling is network intelligence.  With throttling, your wireless data speed is reduced for your entire cycle, 100% of the time, no matter where you are. Network Optimization is based on the theory that all customers should have the best network possible, and if you’re not causing congestion for others, even if you are using a high amount of data, your connection speed should be as good as possible. So, if you’re in the top 5% of data users, your speed is reduced only when you are connected to a cell site experiencing high demand. Once you are no longer connected to a site experiencing high demand, your speed will return to normal. This could mean a matter of seconds or hours, depending on your location and time of day.

Deeply troubled

Verizon first announced the proposed changes in late July, which inspired FCC Chairman Tom Wheeler to send Verizon's president and CEO Daniel Mead a July 30 letter (available in .pdf form here) saying he was “deeply troubled” by the news:

"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. ... 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 then asked Mead/Verizon to answer three questions:

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. Why is Verizon Wireless extending speed reductions from its 3G network to its much more efficient 4G LTE network?

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 20120 Open Internet rules, including the transparency rule that remains in effect?

Those FCC Open Internet rules, also known as net neutrality, “established high-level rules requiring transparency and prohibiting blocking and unreasonable discrimination to protect Internet openness,” according to the FCC Open Internet website.

The very next day, July 31, Verizon's “News Center Team” posted this “Message Regarding FCC Letter” which said in its entirety:

“We’re reviewing the letter from the FCC and will respond officially to Chairman Wheeler’s questions in the timeframe requested. What we announced last week was a highly targeted and very limited network optimization effort, only targeting cell sites 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.”

Out-sized effect

But late in the evening of Aug, 4, the Wall Street Journal reported that Kathleen Grillo, Verizon's senior vice president of federal regulatory affairs, responded to the FCC on Aug. 1, saying that their decision was reasonable against certain unlimited data users who use a “disproportionate amount of network resources and have an out-sized effect on the network …. Not surprisingly, many of these heaviest users of the network are on unlimited data plans.”

(Technically, this does address the FCC's question about limited data use to customers who think they've paid for “unlimited” data; it just doesn't seem to answer the question, merely offer a tautology: unlimited data users sometimes use lots of data.)

Grillo's response to the FCC also said: “Unlike subscribers on usage-based plans, [unlimited data-plan users] have no incentive [to reduce their usage] during times of unusually high demand.”

Again, sounds like a tautology: people who pay for unlimited data use have less incentive to limit their data use than people who pay rates directly based on how much data they use.

Grillo's letter also said: “Rather than an effort to 'enhance [our] revenue streams,' our practice is a measured and fair step to ensure that this small group of customers do not disadvantage all others in the sharing of network resources.”

The letter also said that other carriers do the same thing, and wondered why the FCC singled Verizon out. (Possible answer: because, as mentioned in the FCC's letter, Verizon is operating on the Upper C Block part of the network, which is subject to Open Internet rules?)

The FCC has not yet responded, but says it is reviewing the letter carefully.

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