The Federal Communications Commission has sent a strongly worded letter to Verizon warning that changes in the way it handles mobile Internet traffic may violate federal regulations.
More broadly, the letter by FCC chairman Tom Wheeler is the latest sign that the commission is considering applying its new net neutrality rules to wireless carriers.
Last week, Verizon announced that wireless customers on the company's unlimited 4G LTE data plans would become subject to restrictions on that service beginning in October. The most voracious data users — meaning the top 5 percent, the company said — would see their traffic slowed during periods of heavy demand, with the limits lifted once the congestion had passed or the users moved into range of another cell tower. Verizon already does this for 3G users; the new changes would extend the policy to 4G LTE users, too.
"The vast majority of data customers will not see any impact from Verizon Wireless’ Network Optimization policy, and will be able to browse the Internet, stream music and videos, upload pictures and send emails as they always have," Verizon said in a blog post announcing the changes last week.
A Verizon Wireless spokesman said Wednesday that the announcement last week was "highly targeted and very limited."
"We will officially respond to the chairman's letter once we have received and reviewed it," the company said.
But the targeted nature of the slowdowns may be precisely the problem; citing Verizon's Web site, Wheeler accused the company of discriminating against unlimited data customers but leaving its other customers alone. Wheeler said he was "deeply troubled" by the attempt to apply data restrictions on Verizon's "much more efficient" LTE network, and implied strongly that the company was invoking "network management" as an excuse to make more money.
"'Reasonable network management' concerns the technical management of your network," Wheeler wrote. "It is not a loophole designed to enhance your revenue streams."
Verizon has an interest in encouraging unlimited-data customers to switch to more lucrative metered plans, said Ed Felten, a professor at Princeton University and a former chief technologist at the Federal Trade Commission.
"From a sort of fairness standpoint," said Felten, "one might be concerned by the companies essentially trying to get out of these promises they made earlier by giving these [unlimited data] customers worse treatment than other customers that use equal amounts of bandwidth."
Wheeler's letter is as symbolic as it is direct. It's impossible to read it without drawing comparisons to the FCC's ongoing proceeding to draft new net neutrality rules. In fact, Wheeler made the connection himself, asking Verizon how it could explain its behavior in light of the FCC's transparency rule, which remains the only part of the 2010 net neutrality rules that was not struck down by a federal court in January.
Wireless carriers were exempted from the FCC's original 2010 Open Internet order. Since then, the FCC has asked the public whether its new rules on net neutrality should cover them, too.
"It's fair to say that it's evidence that there's interest in how mobile plays into this," said FCC spokeswoman Kim Hart.
Wheeler's comments on network management appear to address, albeit indirectly, another key aspect in the net neutrality debate. Consumer groups have been calling for the FCC to classify Internet as a utility under Title II of the Communications Act — which would allow the FCC to regulate ISPs more heavily under net neutrality. Opponents have pushed back, saying that Title II merely prohibits "unjust or unreasonable discrimination" and that even under Title II, so-called "Internet fast lanes" or other traffic discrimination might still be considered legal.
With the FCC warning that Verizon's actions potentially constitute an unreasonable form of discrimination, Wheeler may have just found a way to talk about discrimination in concrete terms.
"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. "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."
Read the full letter below.