A week ago, Verizon announced that it will throttle the data of users on its unlimited plan. The company claimed that the new policy would affect less than 20 percent of its subscribers and improve the overall speed of the network, especially in areas where severe data congestion exists. Shortly thereafter, Tom Wheeler, the head of the Federal Communications Commission (FCC) sent Verizon a letter asking the carrier to explain why only those on its unlimited data plans will be throttled.
” ‘Reasonable network management’ concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams,” Wheeler wrote in his letter to Verizon Wireless President and CEO Daniel Mead. “It is disturbing to me that Verizon Wireless would base its ‘network management’ on distinctions among its consumers’ data plans, rather than on network architecture or technology.”
Verizon has been very successful at convincing customers to abandon their unlimited data plans and buy smaller, capped amounts of shared data.
In response, Verizon issued the following statement on its website: “As we’ve said, what we announced last week was a highly targeted and very limited network optimization effort, only targeting cell sites experiencing high demand. The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don’t limit capacity for others.”
Verizon claims that congestion on its network is to blame for the addition of unlimited data plan subscribers to its list of people whose data speeds may be throttled after they exceed the 4.7GB threshold. It says that throttling is a necessary evil, which will ensure that its network runs smoothly for all its subscribers at all times.
What’s somewhat suspect about Verizon’s statement is that unlimited data subscribers are few and far between. Recent studies have shown that Verizon has been one of the most successful carriers at convincing customers to abandon their unlimited data plans and buy smaller, capped amounts of shared data. Verizon itself has said that the vast majority of its customers are now on limited, shared data plans. So why would the carrier need to throttle the few remaining unlimited data customers it has left? Wouldn’t it make more sense to throttle the shared data plan subscribers who use 4.7GB+ a month, too?
In the past few months, Verizon has slowly but surely enticed unlimited customers to join capped data plans by offering great promotions for those plans and snubbing the unlimited users. For example, capped data plan users receive the $5 NFL Mobile app for free, but unlimited users got nothing. Verizon has also given unlimited subscribers special offers on handset upgrades and other cool things if only they switch to the company’s capped data plans.
Although Verizon claims that it just wants to get users off the unlimited data plans because they no longer offer the service to new customers and these users are congesting the network, a recent report from the Government Accountability Office (GAO) demonstrated that capped data plans don’t help decongest the network, they just make people pay more for data.
Additionally, users with a limited amount of data can be charged overages. Those on unlimited plans cannot. Verizon charges $15 for each gigabyte of data that users go over their allotment each month. Given that Verizon has some of the most expensive family plans available, mainly due to high data prices, many families opt for small amounts of data and then get slammed with overage charges. Fear of overage charges has reportedly inspired some users to buy more data than they actually need, which also adds to Verizon’s profits.