The question of whether so-called unlimited data plans are truly unlimited has been in the news lately after Federal Communications Commission (FCC) Chairman Tom Wheeler publicly criticized Verizon for a change in its data throttling policy. Data throttling, the practice of deliberately slowing down data speeds, is hardly a new policy at the company.
The carrier has been using data throttling to limit subscribers on its 3G network since at least 2011, according to ReadWrite. However, the practice is typically used to slow down subscribers who have surpassed their monthly data allotment. For example, if you subscribe to a 3GB data plan, your carrier may throttle your speed if you exceed that allotment, which seems reasonable enough.
But what if you subscribe to an unlimited data plan? In late July, Verizon announced that, starting in October, it would begin slowing down data speeds for the heaviest users of its 4G network who are on unlimited plans during peak usage times at certain cell sites. Verizon said the new policy would apply to “data users who: fall within the top 5 percent of data users on our network, have fulfilled their minimum contractual commitment, and are on unlimited plans using a 4G LTE device.”
This sparked an angry response from Wheeler, who wrote the company an open letter questioning the fairness of the move. “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,” wrote Wheeler in the letter, provided in full by The Washington Post. “The Commission has defined a network management practice to be reasonable ‘if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.’”
According to Wheeler, by using the data plan that a customer subscribes to as one of the criteria for subjecting that person to data throttling, Verizon is going beyond legitimate purposes for “network management” as defined by the FCC.
Wheeler also highlighted a statement from Verizon that appears to show the carrier is trying to push some of its unlimited data plan subscribers onto higher-priced, limited data plans. “If you’re on an unlimited data plan and are concerned that you are in the top 5% of data users, you can switch to a usage-based data plan as customers on usage-based plans are not impacted,” stated Verizon. According to Verizon, as of March, customers who exceed 4.7GB of data a month qualify for the top 5 percent of data users.
ArsTechnica reports that although Verizon hasn’t offered unlimited data plans since 2011, it still has some customers who were grandfathered in with unlimited data service. Wheeler appears to be calling out Verizon for attempting to pressure those customers into switching to a more costly plan by limiting their data speeds.
In response to Wheeler’s question about “treating customers differently based on the type of data plan to which they subscribe” Verizon denied it was trying to push unlimited data subscribers onto more expensive usage-based plans. “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,” wrote Verizon Senior Vice President of Federal Regulatory Affairs Kathleen Grillo in a letter to the FCC obtained by The Wall Street Journal.
Verizon also pointed the finger at other carriers, saying, “This practice has been widely accepted with little or no controversy,” according to The Verge. In this respect, Verizon is unquestionably correct. AT&T, Sprint, and T-Mobile have all instituted similar data throttling policies for their so-called “unlimited” data plans.
According to AT&T’s website, “Customers with a 3G or 4G smartphone who have an unlimited data plan may see speeds reduced as a result of AT&T network management practices if they exceed 3GB of data in a billing cycle. For customers with a 4G LTE1 smartphone who have an unlimited data plan, speeds will be reduced if usage exceeds 5GB in a billing cycle.”
Similarly, Sprint’s website explains that it “currently employs prioritization to improve data experience for the vast majority of users on Sprint’s CDMA and LTE networks. The heaviest data users consume a disproportionate share of network resources and cause a negative user experience for the rest. To more fairly allocate network resources in times of congestion, customers falling within the top 5% of data users may be prioritized below other customers attempting to access network resources, resulting in a reduction of throughput or speed as compared to performance on non-congested sites.” Sprint later defines the “top 5%” as users who exceed 5GB or more of data in a month.
T-Mobile says on its website that “Customers who use more data than 95% of customers on the same rate plan typically use in a month may, during times and places of congestion, have their data usage prioritized below other customers.” T-Mobile also noted, “If total usage exceeds 5GB … or the amount specified in your data plan during a billing cycle, we may reduce your data speed for the remainder of that billing cycle.”
So which carrier limits your unlimited data the least? AT&T, Sprint, and T-Mobile all use the 5GB-per-month threshold, while Verizon cited a 4.7GB threshold. For most customers, the best carrier may boil down to other considerations, such as coverage in their specific geographic area or special signup deals.
T-Mobile and Sprint are both currently offering $80-per-month unlimited data plans. AT&T and Verizon no longer offer unlimited data plans, so only subscribers who were grandfathered in have the option of keeping up their “unlimited” data plans with those carriers. All the above carriers contend that the data throttling is done to improve the overall end-user experience, rather than as a method of encouraging customers to move to higher-priced, usage-based plans.
While none of the plans offered by the various carriers are truly “unlimited,” only Verizon had the temerity to refer to its data-throttling policy with the Orwellian doublespeak name of “Network Optimization.” Presumably, Verizon means that unlimited data subscribers’ network access would be optimized in the same way that a sprinter’s running ability is optimized by having concrete blocks strapped to his or her feet.
Perhaps Verizon’s labeling of the practice as “Network Optimization” is what drove Wheeler, the FCC chairman, to publicly chastise the carrier for its recent announcement. Although Verizon claimed that it was only continuing a widely accepted practice in the telecommunications industry, Wheeler dismissed that argument as a poor excuse. “’All the kids do it’ is something that never worked with me when I was growing up, and it didn’t work for my kids,” he recently said, per The Washington Post. “We have to be careful about attempts to reframe the issue.”
The FCC chairman’s recent comments suggest that government regulators may soon be cracking down on the controversial practice of data throttling when it is done for reasons other than “legitimate network management purposes.” Perhaps Wheeler can explain to the wireless carriers what the widely understood definition of “unlimited” is, as well.
Follow Nathanael on Twitter @ArnoldEtan_WSCS