As iPhone looms, Verizon to throttle data speeds of heaviest users

Verizon Wireless (NYSE:VZ) will begin throttling the speeds of the heaviest data users on its network, according to a Verizon memo--a function that will take effect just before the carrier begins selling Apple's (NASDAQ:AAPL) iPhone. 

In the memo, Verizon states that if subscribers sign up for a data plan on or after Feb. 3 and use an "extraordinary amount of data and fall within the top 5 percent of Verizon Wireless data users," the carrier may throttle throughput speeds periodically for the remainder of the subscriber's billing cycle and into the next cycle. Verizon said the move is to "ensure high-quality network performance for other users at locations and times of peak demand."

Verizon spokesman Jeffrey Nelson told Dow Jones Newswires that the new policy is not related to the iPhone launch. "This is clearly something we've been looking at for some time and introducing now," he said. "There's nothing magic about the timing."

Verizon customers can pre-order the iPhone today; the general public can purchase the iPhone for Verizon on Feb. 10. AT&T Mobility (NYSE:T) was repeatedly criticized by customers who experienced poor network quality due, in part, to high iPhone usage. Verizon will sell the iPhone with an unlimited data plan for $30.

Verizon isn't the first to throttle users' speeds. T-Mobile USA, Leap Wireless (NASDAQ:LEAP), Sprint Nextel's (NYSE:S) Virgin Mobile USA prepaid brand and Clearwire (NASDAQ:CLWR) all employ speed-slowing techniques. AT&T does not have any throttling policies in place, AT&T spokesman Mark Siegel told FierceWireless. Instead, the company relies on its usage-based pricing plans--which impose overage charges--to prevent network overloading.

In addition to the throttling policy, Verizon also said it is implementing optimization and transcoding technologies for files, and that the techniques include caching less data, using less capacity and sizing videos more appropriately for devices. Verizon said the optimization process is agnostic to the content and to the website that provides it. Verizon also said that while any change to files is likely to be indiscernible, the optimization process may minimally impact the appearance of files on devices.

Numerous vendors, including Bytemobile, Openwave, Ortiva and Vantrix, have worked with carriers on network optimization techniques, especially for video--and the problem is going to become more urgent in the years ahead. According to the latest Cisco Visual Networking Index, fully 66 percent of all mobile data traffic will be video by 2015.

For more:
- see this WSJ article (sub. req.)
- see this BGR post
- see this Verizon memo (PDF)

Related Articles:
Jarich: Why MWC will be all about video optimization
Clearwire upgrades network management system to better throttle speeds
Sprint: We won't throttle wireless data speeds on our network
Leap experimenting with new unlimited broadband plans
T-Mobile drops cap on 5 GB plan