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Verizon Wireless Sets iPhone Plans and Throttles Data

Verizon Wireless will charge $30 per month for a so-called “unlimited” data plan paired with the new iPhone 4 Apple designed to be compatible with Verizon’s CDMA network. However, Verizon also published a terms and services document that explains that it may downsample and transcode media, as well as throttle the network’s heaviest users.

The “unlimited” plan is the only data offering from Verizon, which made it clear this would be a limited-time offer, as well. Afterwards, the company is likely to switch to a two-tiered service much like it and AT&T offer for all other phones. In June 2010, AT&T switched to a $15-per-month 200 MB DataPlus plan and $25-per-month 2 GB DataPro plan for new subscribers and those who changed service plans.

Verizon also set the price for its iPhone 4’s Personal Hotspot feature at $20 per month with a separately metered 2 GB of service included, as it offers with other smartphones. Extra data usage costs $20 for each gigabyte used within the billing period. (See “AT&T Changes Tethering to Mobile Hotspot,” 2 February 2011, for details about AT&T’s upcoming mobile hotspot offering, still not yet announced for the iPhone.)

Verizon’s two bandwidth-reducing strategies may irk some users. “Optimizing” and “transcoding” refer to downsampling image data, such as making a JPEG image less faithful to the original, or degrading the quality of video (which can introduce jerkiness and artifacting) to reduce the bandwidth consumed in sending it. Technically, neither would be a violation of net neutrality principles, because it’s being called a network management strategy instead of a discriminatory method to show images or video from Verizon properties or partners better than that from other parties.

The throttling may be a bigger problem. Mobile carriers all reserve the right to impose limits or pull the plug on people they believe are violating reasonable usage policies. Carriers’ fine print often says that mobile can only be used for email, Web surfing, and intranet use, despite the fact that smartphones handle a million other tasks. And there are certainly network abusers, who use phones to run Web servers or stream video 20 hours a day. Verizon says it’s looking at just its 95th percentile users, but that would sweep in an awful large number of people. Comcast, with whom I have spoken many times about its 250 GB cap on usage each month for cable broadband, finds less than 1 percent of its users have problematic consumption,
and of those, many have compromised computers used for the distribution of pirated media or as zombie agents of malefactors.

Verizon Wireless and other carriers have a history of enforcing policies in ways that make sense internally, but not to customers. Without clear guidelines as to what will trigger throttling—such as a particular amount of data consumed in a 1-hour or 24-hour period, or use of services by a subscriber that Verizon contends aren’t allowed—and without warnings that specifically address behavior Verizon will disallow, the company may face scrutiny from Congress, legal action from affected customers, and regulatory enforcement attempts.

For now, Verizon told public-radio program Marketplace (on which you’ll hear yours truly, too), it doesn’t have plans to engage throttling. It just wants the option available for reasons that a spokesperson was unable to articulate clearly.

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