Will Verizon Throttle Users?

Verizon Wireless backed away from a widely criticized plan to slow down the connections of heavy data users with unlimited LTE plans.

The carrier had announced in July it would extend a practice it calls network optimization to unlimited LTE subscribers starting in October. Network optimization targets the top 5 percent of data users on the network when a cell site is under the heaviest demand, and slows down those users’ network performance. Verizon had already applied the practice to the top users of its 3G network.

“We’ve greatly valued the ongoing dialogue over the past several months concerning network optimization and we’ve decided not to move forward with the planned implementation of network optimization for 4G LTE customers on unlimited plans,” the carrier said in a statement on Wednesday. “Exceptional network service will always be our priority and we remain committed to working closely with industry stakeholders to manage broadband issues so that American consumers get the world-class mobile service they expect and value.”

U.S. Federal Communications Commission Chairman Tom Wheeler attacked the plan in a letter to Verizon, suggesting it was a ploy to get customers to switch from their unlimited plans to ones with a cap on monthly data usage. Verizon no longer sells new unlimited plans but allows subscribers with those plans to keep them.

“I know of no past Commission statement that would treat as ‘reasonable network management’ a decision to slow traffic to a user who has paid, after all, for ‘unlimited’ service,” Wheeler wrote in the late July letter to Verizon Wireless President and CEO Dan Mead.

Digital rights group Public Knowledge also attacked so-called data throttling, as well as practices by AT&T, Sprint and T-Mobile USA.

The showdown demonstrated the tension over increasing demand for mobile data, which carriers say puts a strain on their networks. Among other things, that demand has led operators to seek ever more spectrum and apply network management techniques they say are necessary to keep serving all subscribers well. Though LTE makes much more efficient use of the airwaves than 3G does, LTE networks are serving a rapidly growing number of subscribers.

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Mobile Carriers Dash To Enter FCC Auction

Three of the four largest U.S. mobile operators and satellite provider Dish Network Corp plan to bid in the Federal Communications Commission’s November auction of airwaves, according to initial applications released on Wednesday.

As expected, the largest U.S. wireless carrier Verizon Communications Inc, No. 2 AT&T Inc, No. 4 T-Mobile US Inc and Dish appeared to be the largest companies to indicate an interest in bidding in the upcoming auction of frequencies known as AWS-3.

Applications from Northstar Wireless LLC and SNR Wireless LicenseCo LLC reported they had entered bidding agreements with Dish, which had indirect ownership interest in both companies.

Northstar’s disclosures showed direct and indirect ownership interest by Alaska Native corporation Doyon Ltd and indirect ownership interest by financial firm Catalyst Investors. Asset manager BlackRock Inc had membership shares in SNR, according to the documents.

T-Mobile and AT&T did not appear to plan joint bids with other companies, and T-Mobile’s Kathleen Ham, vice president of federal regulatory affairs, said the carrier had no such agreements with any company.

A Verizon spokesman did not respond to inquiries about potential joint bidding and Dish representatives declined comment beyond confirming the submission of its application, citing FCC’s anti-collusion rules.

A total of 80 entities submitted initial applications. Interested parties, which may or may not actually bid for wireless licenses in the auction, included smaller U.S. companies such as Bluegrass Wireless LLC, Guam-based wireless company Docomo Pacific Inc and individual spectrum investors.

Scheduled to begin on Nov. 13, the auction is expected to raise at least $10 billion and will include airwaves previously occupied by multiple federal users, including the Department of Homeland Security.

Dish applied to bid in the auction as American AWS-3 Wireless I LLC and disclosed joint bidding arrangements with SNR and Northstar, which in turn had to disclose ownership and other information.

SNR listed former FCC Wireless Bureau Chief John Muleta, now CEO of consulting firm Atelum LLC, as a contact. Muleta, reached late on Wednesday, declined comment, citing FCC’s restrictions.

Northstar’s disclosures listed Allen Todd, assistant secretary at Doyon, a Fairbanks-based Alaska Native Regional Corporation with numerous affiliates in various fields including oil and gas land drilling. Todd could not be reached for comment on Wednesday.

SNR’s and Northstar’s, as well as AT&T’s, initial application appeared to be incomplete, which can be caused by small bureaucratic omissions. Of the 80 applications, 47 were deemed incomplete and have to be properly finished by Oct. 15 to allow the companies to participate.

All initial applications have to put down an upfront payment by Oct. 15 to confirm participation.

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The DoD May Share Airwaves

The U.S. Defense Department is proposing to share some of its radio airwaves with private industry, a nod to growing pressure from the wireless industry and the Obama administration that federal agencies ease their control of valuable spectrum.

In a letter released by the Federal Communications Commission on Tuesday, the Department of Defense offers to share the airwaves it now dominates in the slice of frequencies from 1755 megahertz (MHz) to 1780 MHz with spectrum-hungry wireless and Internet companies.

The military would rearrange its systems within that slice of spectrum as well as the 2025-2110 MHz band and compress programs into the 1780-1850 MHz band that it would retain.

The Defense Department uses the airwaves for programs such as pilot training and drone systems and has faced criticism from some in the industry and in Congress for resisting efforts to open those airwaves for commercial use to satisfy growing demands posed by data-hungry gadgets and services.

The Pentagon had pointed to its own need for airwaves as its use of drones and other reliance on wireless technology grows. It also had estimated the process of moving its programs to new frequencies would cost more than $12 billion.

Under the new plan, the Defense Department drops the cost estimate to $3.5 billion by compromising on sharing slices of airwaves without completely clearing any of the spectrum bands.

In the letter, originally sent on July 17 to the National Telecommunications and Information Administration, which oversees federal airwaves, DOD Chief Information Officer Teresa Takai called the proposal “a workable balance to provide access to the 1755-1780 MHz band most desired by the commercial wireless industry while ensuring no loss of critical DoD capabilities.”

The NTIA, in its own letter to the FCC, said it had not had enough time to review the proposal and could not yet endorse it.

The FCC, with NTIA’s help, is preparing for several auctions of airwaves to take place in coming years, including one that would sell off chunks of federally controlled spectrum. They will be the first reshuffling of airwave ownership since 2008.

Congress has required the FCC to auction off the 2155-2180 MHz band by February 2015 and the industry has sought to pair up that slice of spectrum with the valuable 1755-1780 MHz band, arguing it would collect more money. Lawmakers in the House of Representatives have introduced a bill to ensure such pairing.

The FCC has been drafting a notice of proposed rulemaking that would seek public comments on how the FCC should auction those federally owned or already cleared airwaves to the wireless companies and an FCC official said the agency’s notice will address the Pentagon’s new proposal.

President Barack Obama last month directed federal agencies to look for ways eventually to give up or share more of their airwaves with the private sector. This followed his June 2010 call to open up 500 MHz of federal spectrum for commercial use.

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