Tethering, Verizon, and the Problem with Public Interest Requirements

When Verizon won an auction to use the 700MHz band of the spectrum to deliver mobile broadband, it promised to adhere to a set of openness rules that included allowing customers to use applications and devices of their choosing. But Verizon is now blocking "tethering" apps that allow us to use our cell phones as a modem for our computers. Wendy Davis at MediaPost offered more context:

Whether it's legal for a wireless carrier to cripple tethering services is unclear. Verizon agreed to follow open Internet principles as a condition of acquiring the spectrum that it uses for 4G wireless phones. One interpretation of that condition is that the company shouldn't attempt to restrict tethering on its 4G network -- though apparently it's still free to do so on the 3G network. … But aside from neutrality issues, Verizon's move clearly seems hard to justify from a pricing standpoint. Given that the company is already going to charge new users based on the amount of data they consume, there's no reason for it to also impose a surcharge for tethering.

Free Press filed a complaint with the FCC to investigate:

Free Press will file a complaint today with the Federal Communications Commission against Verizon for violating the rules that govern the licenses for its LTE network. Licensees of the C Block of the upper 700 MHz block, over which Verizon runs its LTE network, may not “deny, limit, or restrict” the ability of their customers to use the applications or devices of the customers’ choosing. Recent reports reveal that Verizon has been doing just that by asking Google to disable tethering applications in the Android Market. Tethering applications, which allow users to make their phones into mobile hot-spots, implicate the customers' ability to use both the applications and devices of their choice. Free Press argues that by preventing customers from downloading tethering applications from the Android Market, Verizon is restricting not only the applications available to them, but also limits use of tethered devices such as laptop or tablet computers. [Read the Full Complaint here]

Free Press Policy Counsel Aparna Sridhar noted:

“In 2007, Verizon argued aggressively against the adoption of these basic openness protections. Having lost that policy battle but won the auction for the spectrum licenses, Verizon has adopted a new regulatory strategy: simply ignore the rules on the books. The Commission must move quickly to investigate and stop these harmful practices.”

This is the problem with imposing public interest requirements, and more generally, regulating companies that are providing essential infrastructure. Companies like Verizon are incredibly powerful and regularly ignore rules they do not like, understanding that they can delay any rule or punishment for years. They can often delay long enough for DC to change administrations or simply grow weary of trying to defend the public interest (often when the public has no idea what is happening). If the US pursued a policy where the infrastructure elements were publicly owned and independent service providers competed on top of that infrastructure, we would have more tools to prevent abusive practices. For one, companies would have to adhere to the rules in order to use the infrastructure. For another, we would have more providers competing, allowing people to switch away from abusive carriers -- a luxury many do not have currently given our duopolistic telecom markets. This matter of tethering is incredibly important for the future of mobile access to the Internet, as explained by Barbara van Schewick (always a worthwhile read):

The questions raised by the complaint are too important to be decided without public participation: The C Block of the 700 MHz band is currently the only spectrum that is subject to mobile network neutrality rules.[1] Knowing that there is at least some part of the mobile spectrum that is protected by basic network neutrality principles is important for users, innovators and investors. Whether the openness conditions indeed afford protection depends, however, on how they are interpreted and enforced. Thus, the proceeding has important implications for many businesses, innovators and users in the Internet ecosystem, so they should have a chance to have their voice heard, too. In addition, as I explain in the letter, the proceeding raises important issues regarding openness in mobile networks in general.

The good news is that the FCC has told Verizon is must respond to Free Press' complaint. The bad news is that we have no idea how long it will take to resolve this and whether the FCC, which has maintained a cozy relationship with the big carriers through Republican and Democratic Administrations, will actually protect the public. The FCC has two stellar Commissioners that regularly defend the public interest and two commissioners that regularly stand with the carriers. And the current Chair … well, he caved to AT&T and Verizon rather than standing for principles he defended for years and Obama campaigned on. Thanks to Free Press, Barbara van Schewick, and all the others who are defending the public good.