FCC Chief ‘Deeply Troubled’ by Verizon Plan to Slow Traffic

Tom Wheeler suggests the new policy may run afoul of net neutrality.

A Verizon store is seen April 21, 2011 in Santa Monica, California. Verizon announced today that it activated 2.2 million iPhones during the first quarter, helping the company more than triple its profit from a year ago. The company reported earnings of $1.4 billion on revenue of $27 billion for the quarter. Profit grew more than three-fold from the $443 million the telecom company earned during the same period last year.  
National Journal
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Brendan Sasso
July 30, 2014, 12:49 p.m.

Ve­r­i­zon has found it­self in hot wa­ter with fed­er­al reg­u­lat­ors over its plan to slow traffic for cer­tain cus­tom­ers.

In a let­ter sent to Ve­r­i­zon CEO Dan Mead on Wed­nes­day, Fed­er­al Com­mu­nic­a­tions Com­mis­sion Chair­man Tom Wheel­er said he is “deeply troubled” by the cell phone car­ri­er’s an­nounce­ment. He de­man­ded more de­tails about the plan and ques­tioned wheth­er it’s leg­al.

“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 wrote.

The stern let­ter comes as Wheel­er is un­der fire from lib­er­als for pro­pos­ing net neut­ral­ity reg­u­la­tions that they view as too weak to pre­vent ab­use.

Last week, Ve­r­i­zon an­nounced that it will be­gin slow­ing down 4G LTE data speeds for cus­tom­ers with un­lim­ited plans when they try to con­nect to con­ges­ted cell towers.

“Our net­work op­tim­iz­a­tion policy provides the best path to en­sure a con­tin­ued great wire­less ex­per­i­ence for all of our cus­tom­ers,” Mike Haber­man, Ve­r­i­zon’s vice pres­id­ent for tech­no­logy, said in a state­ment at the time.

The FCC al­lows cel­lu­lar car­ri­ers and home In­ter­net pro­viders to en­gage in “reas­on­able net­work man­age­ment.” But Wheel­er warned the Ve­r­i­zon CEO not to try to use that ex­cep­tion as a “loop­hole de­signed to en­hance your rev­en­ue streams.”

“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 wrote.

The FCC en­acted net neut­ral­ity reg­u­la­tions in 2010 that re­stric­ted the abil­ity of In­ter­net pro­viders to tamper with traffic. A fed­er­al court mostly struck down the rules earli­er this year, only leav­ing in place a re­quire­ment that pro­viders must pub­licly dis­close how they man­age traffic.

Wheel­er ques­tioned wheth­er Ve­r­i­zon could jus­ti­fy its new policy un­der the 2010 rules “in­clud­ing the trans­par­ency rule that re­mains in ef­fect.”

He also sug­ges­ted the policy may vi­ol­ate “open plat­form” re­quire­ments that Ve­r­i­zon agreed to when it bought wire­less fre­quency li­censes as part of a 2008 auc­tion. Wheel­er ex­plained that the com­pany had prom­ised not to “deny, lim­it, or re­strict the abil­ity of end users to down­load and util­ize ap­plic­a­tions of their choos­ing.”

Ve­r­i­zon said it will of­fi­cially re­spond to Wheel­er’s let­ter after it has had time to re­view it.

“However, what we an­nounced last week was a highly tar­geted and very lim­ited net­work op­tim­iz­a­tion ef­fort, only tar­get­ing cell sites ex­per­i­en­cing high de­mand,” the com­pany said in a 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.”

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