Verizon Wireless has settled an investigation with the FCC over compliance with Net Neutrality rules on its 700 MHz spectrum.
Verizon Wireless is no longer allowed to block apps that allow people to use their 4G LTE smartphones as Wi-Fi hotspots. And the carrier will pay the Federal Communications Commission a $1.25 million fine, the government agency said Tuesday.
The FCC has been investigating Verizon's business practices for the last 10 months to make sure that its 4G LTE service complies with so-called open access rules that were established as part of the 700 MHz spectrum auction in 2008. Verizon is using this spectrum to offer its 4G LTE service.
During its investigation, the FCC found that Verizon had asked Google to remove applications in its Android marketplace because these apps allowed subscribers to circumvent its $20 "tethering fee." Tethering allows subscribers to use their smartphones as wireless modems, providing Internet access to other Wi-Fi enabled devices.
The FCC said that by blocking these applications, Verizon has violated the open access conditions that were placed on the block of spectrum the company is using to build its 4G LTE network.
Specifically, the agency's rules for this spectrum state that licensees offering service on C Block of 700 MHz spectrum "shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice on the licensee's C Block network."
When initially questioned about these fees, Verizon stated that the additional fee reflected the fact that customers who tether laptops or other devices often use more data than others. At the time of that response, Verizon Wireless required not only unlimited data plan customers, but also customers who paid for data on a usage basis, to pay this additional fee.
Under the terms of its settlement with the FCC, Verizon will make a voluntary $1.25 million payment to the Treasury. The carrier has also notified Google that it no longer objects to the tethering apps. The carrier has also agreed to a plan that will ensure its compliance with its rules.
It's unclear if customers with an unlimited data plan will be forced to give up that data plan if they use a tethering app. Previously, that has been the case. What's more, the settlement only applies apps on Verizon's 4G LTE network. It's unclear whether Verizon will continue to charge 3G-only customers the additional $20 fee for tethering their smartphones, if they use these third party tethering apps.
Verizon recently changed its service plans to include the tethering capability at no additional charge. But existing customers can still choose from older service plans.
