Sprint (NYSE: S) decided to end its practice of slowing down the data speeds of its heaviest mobile data users after the FCC's net neutrality rules went into effect last Friday. The decision is one of the first concrete impacts of the rules, which apply to wireless networks and bar data throttling except in cases of "reasonable network management."
Sprint said it has always been transparent about its network management practices. "To ensure the greatest number of customers enjoy the best network experience possible in times of heavy congestion, Sprint did reserve the right to prioritize network resources for the top 5 percent of heaviest users," Sprint said in a statement to FierceWireless.
The company noted that it only throttled the speeds of its top 5 percent of data users during times and locations experiencing congestion and that "those reserved resources were allocated to the remaining with the goal of improving their experience."
Sprint reviewed its program and decided to abandon the practice, and the policy change applies to both postpaid and prepaid customers. "Although Sprint believes the program was a reasonable network management practice under both the old and new rules, we determined that the technique as we applied it was not needed to ensure a quality experience for the majority of customers," the company said. "Sprint doesn't expect users to notice any significant difference in their services now that we no longer engage in the process."
The FCC's rules say that a network management practice will be considered reasonable if it is primarily aimed at "achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service." The practice needs to be related to a "technical network management justification" and not business practices.
Under the rules, carriers are not allowed to engage in practices that permit "different levels of network access for similarly situated users based solely on the particular plan to which the user has subscribed," which seems to indicate that carriers are not able to throttle the speeds of a subscriber simply because they have a grandfathered unlimited data plan, for example.
The FCC proposed yesterday to fine AT&T Mobility (NYSE: T) $100 million for not being transparent enough with its grandfathered unlimited data plan customers about how and when their speeds would be reduced if they use too much data. The FCC said that AT&T violated the transparency rule of the net neutrality rules because its disclosures about what would happen were not sufficient to give consumers an informed choice about their plans.
AT&T throttles the data speeds of customers on legacy unlimited data plans only when they are connected to congested cell sites, regardless of the kind of smartphone they have. Customers on such plans who have HSPA+ devices can see their speeds reduced for the remainder of their billing cycle after they use 3 GB of data, while the threshold for LTE smartphone users is 5 GB.
AT&T said it would contest the FCC's findings. "We will vigorously dispute the FCC's assertions," the carrier said in a statement. "The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers, and has known for years that all of the major carriers use it. We have been fully transparent with our customers, providing notice in multiple ways and going well beyond the FCC's disclosure requirements."
Verizon Wireless (NYSE: VZ) still throttles the data speeds of customers on its 3G CDMA network who are on legacy unlimited data plans who cross into 5 percent of data users when they are on congested cell sites. Verizon argues this "network optimization" policy affects a small number of customers. The company abandoned plans last fall to extend the policy to its LTE customers. Verizon spokeswoman Debi Lewis declined to comment or speculate on what Verizon might do going forward.
On T-Mobile US' (NYSE:TMUS) Simple Choice plans, once a customer has used all of the LTE data included in their plan, their data speeds are automatically slowed to 2G speeds for the remainder of their billing cycle. The exception is T-Mobile's $80 per month unlimited plan.
"We don't throttle our Simple Choice Unlimited 4G LTE customers, and we never have," T-Mobile said in a statement. "As America's fastest 4G LTE network, we manage our network traffic in adherence to net neutrality rules to provide the best possible experience for our customers."
T-Mobile will continue to slow down the speeds of its Simple Choice customers who are not on its unlimited plan and exceed their data allotments, however. "We love anything that puts consumers first," T-Mobile said. "Supporting a free and open Internet is no exception. We're compliant with the new Open Internet rules and will continue to innovate US wireless in true Un-carrier fashion."
A U.S. Cellular (NYSE:USM) spokeswoman did not immediately respond to a request for comment. Currently, if a U.S. Cellular customer has a non-tiered data plan and exceeds their data limit, their data access will be slowed down for the remainder of their billing cycle. Customers may also see their speeds reduced if they "consume large amounts of data in places and times of network congestion."
- see this WSJ article (sub. req.)
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Article updated June 19 at 9:20 a.m. ET with a statement from T-Mobile.