Public Interest Groups Slam Verizon's Release of Different Unlimited Offers
Public interest groups charged Tuesday that a Verizon plan to divide its unlimited offering into three separate plans raises net neutrality concerns. Verizon said it's now offering three different unlimited plans -- Go Unlimited, Beyond Unlimited and Business Unlimited. The groups said the plan shows why the FCC shouldn't roll back open internet rules approved two years ago under former Chairman Tom Wheeler (see 1707180009).
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The plans differ on some of the details, according to a news release. For example, Go Unlimited costs $75 for the first line, with unlimited data, DVD-quality streaming and mobile hot spot use at 600 kbps. With Beyond Unlimited, subscribers get HD-quality streaming of video, a faster hot spot connection and calling, texting and data in Mexico and Canada at $85 per line.
Free Press raised net neutrality concerns since Verizon offers slower video speeds with the cheaper plan. “Only in the double-talking marketing departments of America's least favorite companies could you get away with claiming that you have three different kinds of unlimited plans,” said Free Press Policy Director Matt Wood in a news release. “That sure is a funny definition of unlimited. Maybe the new 'Beyond Unlimited' plan should be called 'Beyond Belief' instead." Net neutrality allows carriers to manage their networks in a reasonable way, Wood said: It doesn’t “allow broadband providers to pick and choose which kinds of apps work well, and which don’t.” The FCC and Verizon didn't comment.
T-Mobile CEO John Legere, who alleged on recent financial calls that Verizon’s network can’t keep up with unlimited data demands, flagged the news on Twitter. “If this isn’t a sign that @Verizon’s network is crumbling from offering unlimited, I don’t know what is!” he said.
Gigi Sohn, a top aide to Wheeler, said the plans are confusing for consumers. “Either it’s unlimited or it’s not unlimited,” she said. “I don’t know how you can have several different tiers with different restrictions. … There’s a bit of deception calling this unlimited.” Free Press is right to raise concerns that Verizon is throttling one type of app, which competes directly with its Fios TV product, Sohn said: “I thought Verizon fancied itself an over-the-top company.”
"The FCC has already fined Verizon for throttling tethering applications that subscribers routinely use to create mobile hot spots,” said Michael Calabrese, director of the Wireless Future Program at New America. “Throttling those applications would likewise clearly violate their 700 MHz licensing conditions even aside from net neutrality. We expect the commission will continue to enforce its rules."
Larry Downes, senior fellow at the Georgetown Center for Business and Public Policy, said he’s not sure whether Verizon’s new offering could have been construed as violating the FCC’s 2015 net neutrality rules. The general conduct rule approved as part of the order “was so poorly drafted that it could cover pretty much any practice, service plan, innovation or new offering from any ISP that a majority of commissioners didn’t like at any particular moment,” Downes said. “So who knows? That was the risk of such broadly written rules and to-be-determined standards for enforcing them. That’s what made the 2015 order so dangerous.”
"Whether the new plans violate 'net neutrality' depends of course on who defines how strictly and in what context the plans are offered,” said Randolph May, president of the Free State Foundation. “Aside from definitional constructs, I'd say that this type of differentiation is good for consumers, considered overall, and what is expected in a competitive marketplace. This is also a good example of why the FTC should handle these issues that really relate to how plans are marketed to consumers."
Verizon effectively increased the cost of its unlimited rate plan, “providing further evidence that the wireless market is not as competitive as many investors believe,” BTIG analyst Walter Piecyk said. “These changes could help alleviate network congestion, but also sets up a new scheme by which Verizon can drive higher ARPU [average revenue per user] through tiered levels of wireless pricing.” The new plans aren’t a surprise, Wells Fargo analyst Jennifer Fritzsche said. “We see this as a move for [Verizon] to penetrate some market segments where it has lower representation ('casual smartphone user') as well as a lever which allows it to better manage network capacity,” she said in a note to investors.