In an unprecedented move, the Federal Communications Commission ended a 10-month investigation of Verizon Wireless with a $1.25 million settlement for restricting Android customer access to “tethering” software used to relay Internet signals to other devices.
The federal probe was launched after the policy group Free Press filed a complaint in June 2011 alleging the nation’s largest wireless network had asked Google to remove or disable Android Market applications that circumvented Verizon’s $20 tethering charge. The group maintained such action violated special conditions Verizon agreed to when it purchased 700 MHz C Block licenses in 2008 to operate its LTE service.
This is believed to be the first time the FCC has enforced open access over that spectrum, according to published reports.
FCC Chairman Julius Genachowski said in a news release: “Today’s action demonstrates that compliance with FCC obligations is not optional. The open device and application obligations were core conditions when Verizon purchased the C-block spectrum. The massive innovation and investment fueled by the Internet have been driven by consumer choice in both devices and applications. The steps taken today will not only protect consumer choice, but defend certainty for innovators to continue to deliver new services and apps without fear of being blocked.”
Added Free Press Policy Director Matt Wood in a prepared statement: “The FCC sent a strong signal to the market that companies cannot ignore their pro-consumer obligations. Unfortunately, the fact that Verizon worked to block these apps in the first place is a clear indication that wireless providers have a strong incentive to discriminate against certain content and applications, an incentive that continues to threaten online freedom and innovation.”
Verizon issued its own statement through an e-mail to various news outlets, denying it blocked its customers from third-party tethering applications. A spokesman said the company settled with the FCC in order to devote more attention to serving its customers.
The company currently is undergoing a federal review of its intended $3.9 billion purchase of airwaves from a coalition of four cable operators. Critics contend the deal could eliminate competition and lead to higher prices and less consumer choice.
In addition to the FCC fine for blocking access to the apps, Verizon agreed to:
- train employees on compliance with the C Block rules
- a legal review of communications with application store operators regarding the availability of applications to Verizon Wireless customers
- report any instances of noncompliance with the rule at issue that might occur during the two-year term of the plan
Verizon also revised its offerings last month to allow customers on usage-based pricing plans to tether via a mobile broadband application without paying an additional fee.
