Consumer Watchdogs Growl Over Verizon’s LTE Tethering Clampdown

Consumer watchdog group Freepress is accusing Verizon of breaching the terms of its agreement to lease airwaves for its 4G LTE network.

Freepress filed a complaint with the Federal Communications Commission Monday about this issue.

The complaint alleges Verizon Wireless breached its lease terms by asking Google to restrict access to third-party apps on the Android Market that allow tethering — using a mobile phone to connect a laptop to the Internet.

“The reason we filed the complaint against Verizon Wireless is that they’re the only one that’s running their network on the spectrum subject to those conditions,” Aparna Sridhar, policy counsel at Freepress, told the E-Commerce Times. “AT&T and T-Mobile don’t,” she added.

“Verizon Wireless doesn’t block applications in the Android Market,” retorted the carrier’s spokesperson, Jeffrey Nelson. “Google manages its market.”

It’s Freepress that broke the rules when it complained, Nelson contends.

“Freepress filed this complaint with the FCC without contacting us to discuss the facts about the issue as the FCC rules for formal complaints require,” Nelson told the E-Commerce Times.

Freepress sent a copy of the complaint to Google “as a courtesy,” Sridhar said.

Neither the FCC nor Google responded to requests for comment by press time.

The Substance of the Freepress Complaint

Freepress’ complaint states that most major wireless carriers, including Verizon Wireless, AT&T and T-Mobile, limit access to third-party tethering applications. Users who want to tether their mobile phones have to subscribe to the carriers’ official tethering services, which can cost them up to US$30 a month, the complaint states.

This practice not only restricts consumer choice and hinders innovation, but, when Verizon Wireless employs these restrictions in connection with its new LTE network, it also violates the Federal Communications Commission’s rules, the complaint alleges.

Verizon leased the upper 700 MHz C block of spectrum for its LTE network.

The FCC’s terms and conditions for lessees include a section on open platforms that states upper 700 MHz Block C licensees “must allow customers, device manufacturers, third-party application developers, and others to use or develop the devices and applications of their choosing in C Block networks, so long as they meet all applicable regulatory requirements and comply with reasonable conditions related to management of the wireless network (i.e., do not cause harm to the network),” according to a write-up by the Bingham law firm on the issue.

The lessees cannot “block, degrade or interfere with the ability of end users to download and utilize applications of their choosing on the licensee’s Block C network subject to reasonable network management and protection, or compliance with applicable regulatory requirements,” the terms read.

Among other requirements, licensees are barred from excluding applications or devices “solely on the basis that such applications or devices would unreasonably increase bandwidth demands,” the FCC’s terms state.

“When other carriers block these kind of tethering applications it’s bad policy and anti-consumer, but doesn’t violate the commission’s rules,” Freepress’s Sridhar pointed out.

“We stand by our compliance with the FCC’s C-Block rules,” Verizon Wireless’s Nelson stated.

Andrew Lipman, one of the authors of the Bingham write-up, declined to provide additional because of a “possible conflict of interest,” he told the E-Commerce Times.

Call to Action

Verizon’s actions in disabling access to the tethering applications “limit and restrict the ability of users to access those applications” and to “connect the devices of their choice,” the Freepress complaint states.

It calls on the FCC to “immediately investigate this apparent violation of its rules and assess all appropriate penalties.”

Although Google has restricted access to tethering apps in the Android Market, “these applications are available through other carriers, so it’s not the case that Google has taken them out of the market entirely,” Freepress’s Sridhar said.

“So, it appears that Verizon is the driver behind that action,” Sridhar concluded.

“Freepress appears to be more interested in garnering attention than finding out the facts,” Verizon Wireless’s Nelson suggested.

“Over the past few years, Verizon Wireless has paved the way for third parties to bring devices and applications to our 4G LTE network under the C-block rules through our Open Development and other programs, and we will continue to do so,” Nelson remarked.

“Developers adhere to their agreements with the app store providers, and there are ways to report and point out non-compliance — for example, apps that are essentially network workarounds,” Nelson said.