To quickly review, Network Optimization is a three-year-old program in which Verizon throttles the speeds of those customers with “unlimited” data plans who are in the top 5% of monthly data users. Optimization does not currently apply to LTE data use, but VZW has announced that LTE users will face throttling starting in October.
In his letter to Verizon Wireless CEO Daniel Mead, Wheeler said it was “disturbing… that Verizon Wireless would base its ‘network management’ on distinctions among its customers’ data plans, rather than on network architecture or technology.”
“‘Reasonable network management’ concerns the technical management of your network,” wrote the Chair, “it is not a loophole designed to enhance your revenue streams.”
According to the Wall Street Journal, Verizon’s response to Wheeler points out that other major carriers have throttling plans for heavy users, and asks why he is singling out Verizon.
The response also defended Optimization by saying it only targets a small number of users who account for a “disproportionate amount of network resources and have an out-sized effect on the network.”
Verizon and others have been accused of throttling unlimited account-holders under the guise of congestion-management when the real goal was to get these heavy users switched onto tiered data plans with hefty overage fees for those who eat up more than their allotted amount of data.
The Verizon response to Wheeler claims the company isn’t going after unlimited subscribers; it’s just that unlimited subscribers are the ones most likely to be the heaviest data users.
“Unlike subscribers on usage-based plans, they have no incentive not to do so during times of unusually high demand,” explains the letter. “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.”
Verizon’s LTE Network Optimization is slightly different from other carriers who throttle all data after a user reaches a certain monthly threshold. Instead, the company says that data hogs will only have their download speeds affected when they are connected to a cell site that is experiencing high demand.
We asked the FCC last week whether Wheeler had plans to write the other carriers that throttle data for unlimited users. Reps for the Commission declined to comment, but sources tell Consumerist that all wireless providers are currently being looked at and more letters regarding similar programs may be forthcoming.