FCC chairman calls Verizon out on LTE network management plan

Federal Communications Commission Chairman Tom Wheeler is “deeply disturbed” by Verizon Wireless’ plan to limit the data speeds of some its LTE customers. In a July 30 letter to Verizon Wireless CEO Daniel Mead, Wheeler accused the country’s largest wireless carrier of abusing the principle of network management to try and reap more profit from its customers.
“’Reasonable network management’ concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams,” Wheeler wrote.
Last week, Verizon Wireless said it would extend its “network optimization policy” to the top 5% of data users who had fulfilled their contracts and are on unlimited plans using an LTE device. The carrier warned that these customers might experience slower data speeds when they are accessing certain cell cites during peak use times. Verizon Wireless excluded government and business accounts under major agreements from the data slowdown. The policy is set to begin in October.
When Verizon Wireless stopped offering unlimited data plans three years ago, it allowed customers who were already signed up for unlimited plans to keep them. New subscribers were limited to capped packages. Verizon Wireless has since implemented network management that limits data speeds for these customers, but only on its legacy 3G network. The new policy now extends those limits to its LTE service.
In his letter, Wheeler asked Verizon Wireless to address three issues: first, to explain its rationale for treating customers differently based on their data plans, and specifically, why it included a statement encouraging LTE customers with unlimited data plans to switch to capped plans to avoid any data slowdown; second, the chairman wanted to know why the company was extending its 3G speed reductions to its much faster LTE network; and third, Wheeler asked Verizon Wireless to explain how the policy meets the rules for its 700 MHz license, which state that the carrier cannot deny, restrict or limit the ability of end users to download and use applications of their choosing.
“What we announced last week was a highly targeted and very limited network optimization effort, only targeting cell cites experiencing high demand,” Verizon Wireless spokesperson Robin Nicol told Bloomberg in an e-mailed statement. “The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don’t limit capacity for others.”
This is not the first time Verizon Wireless has run afoul of the FCC over its 700 MHz obligations. In 2012, the commission investigated the carrier for not complying with its licensing requirements related to providing open access to networks on the spectrum. Last August, the operator made a “voluntary” $1.25 million payment to the U.S. Treasury in connection with the investigation.