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Verizon Restrains Video Downloads as IPhone Debuts

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Jan. 10 (Bloomberg) -- Christopher King, an analyst at Stifel Nicolaus & Co., discusses the outlook for Verizon Wireless's iPhone. Verizon, the largest U.S. mobile-phone company, is expected to announce the launch of its own version of Apple Inc.'s iPhone at an event tomorrow in New York. King speaks from Baltimore with Deirdre Bolton on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

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By Greg Bensinger
(c) 2011 Bloomberg News
Thursday, February 3, 2011; 3:09 PM

Feb. 3 (Bloomberg) -- Verizon Wireless, facing a jump in data consumption as Apple Inc.'s iPhone goes on sale, said it will prevent users from downloading entire videos at once to help "ease capacity burdens on the network."

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The carrier may also limit the download speeds for some customers, who are among the top five percent in data consumption, in areas where they risk jamming the network, a practice known as throttling, according to Jeffrey Nelson, a spokesman for Verizon.

Verizon will also eliminate some colors and other data from videos that it deems to be "not visible to the human eye," according to the policy disclosed on its Web site. "The loss of information from the input file may result in reduced color accuracy and sharpness."

Customers began preordering the Verizon iPhone today -- ending almost four years of AT&T Inc.'s exclusive U.S. rights to carry the device. AT&T has said the iPhone contributed to a sharp rise in data use on its network. Verizon Wireless, based in Basking Ridge, New Jersey, said it will only allow the beginning of videos to be downloaded initially while the remainder is sent to a device as it is being watched.

"This is in order to manage the network," Nelson said. Any data slowdowns would be for "specific high-traffic locations at specific high-traffic times of the day, where we are seeing instances where lots of people are being negatively impacted."

The limitations would apply only to customers signing up for new or renewal contracts as of today, he said.

The new policy will spare some users from unnecessary data usage and will improve download speeds, Verizon said. "This progressive download achieves significant network savings if the viewer chooses not to view the entire video."

Verizon Communications Inc., based in New York, co-owns Verizon Wireless with Vodafone Group Plc. of Newbury, England. Verizon rose 23 cents to $36.39 at 2:54 p.m. in New York Stock Exchange composite trading.


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