Carriers Restrict 'Unlimited' 3G

It turns out that some "unlimited" wireless 3G modem services aren't really unlimited at all.

Verizon Wireless and Sprint Nextel Corp. (NYSE: S), both of whom offer data services over their 1xEVDO networks, acknowledge that they reserve the right to cut off customers who are unreasonable in their interpretation of "unlimited." Think Homer Simpson at an all-you-can-eat buffet. Customers are limited because network capacity is limited.

Verizon Wireless' unlimited data plan for 1XEVDO modem users is in fact extremely limited, although the terms don't list a specific limit of megabytes.

"It's unlimited use for Internet browsing, email, and intranet access," says Jeffrey Nelson, a spokesman for Verizon Wireless, in an email message to Light Reading. "When we believe customers are using BroadbandAccess or other services in a way we do not allow, we work with those customers directly."

According to Verizon Wireless' latest terms of agreement, its Unlimited NationalAccess/BroadbandAccess services cannot be used for "(1) uploading, downloading or streaming of movies, music or games, (2) with server devices or with host computer applications, including, but not limited to, Web camera posts or broadcasts, automatic data feeds, Voice over IP (VoIP), automated machine-to-machine connections, or peer-to-peer (P2P) file sharing, or (3) as a substitute or backup for private lines or dedicated data connections."

"We reserve right to limit throughput or amount of data transferred, deny or terminate service, without notice, to anyone we believe is using NationalAccess or BroadbandAccess in any manner prohibited above or whose usage adversely impacts our network or service levels," the agreement states.

Verizon Wireless did not disclose the number of customers it has cut off.

Experts say it comes down to the fact that the EVDO network may not be able to support large numbers of users who freely hit the broadband buffet.

"The raw capacity of an EVDO revA channel is 3.1 megabits per second," says Craig Mathias, principal at the Farpoint Group , a wireless technology consultancy. "The problem is how many users can they keep happy on any given channel at any given time. If everyone is downloading music at the same time, there's going to be a problem. One of the reasons that EVDO is working so well now is that there aren't that many users."

"I've watched the occasional video," says the customer, adding that he averages close to a gigabyte of data each month, according to his bill. "It may not be allowed, but I haven't seen any evidence that they prevent such things."

Asked whether Verizon Wireless plans to keep more accurate track of how customers are using the service, Nelson replies, "We're not going to get into details, but we continue updating technologies to ensure that customers who are using our network and the services we offer on that network aren't in any way getting a degraded experience for the services they pay for."

Sprint's terms of agreements are less strict, although the company's partners say Sprint may have to amend its service plans to take new technology, such as wireless access routers, into consideration.

"Sprint's terms and conditions of service contain provisions restricting any activity that would drive continuous heavy traffic or data sessions," says John Polivka, a Sprint spokesman. "Sprint does not prohibit high bandwidth streaming by our customers. One exception would be if they were trying to run a multimedia web server farm off a Mobile Broadband card, which is not likely."

Sprint recently certified the use of wireless access routers from Junxion Inc. , Kyocera Corp. (NYSE: KYO), and Linksys which allow multiple users to share a cellular connection over WiFi.

"There are a lot of applications where the device is being used that may or may not be what they want to be happening, but at the same time they're watching the activity for their own education," says John Daly, co-founder and vice president of business development at Junxion, whose box is designed for enterprise customers rather than consumers. Verizon has not approved use of the Junxion box. (See Junxion's Cell Through.) "I know they're working on possibly some revisions [to their service plans] that help put us into the picture."

(Sprint has had to re-evaluate the generosity of its wireless data services before. In the fall of 2002, the company launched two unlimited data plans -- one for phones and one for laptops; the latter was more expensive. However, some customers realized a loophole: It was possible to use a cell phone as a modem with a software download and a cable connection. In fact, Sprint sold the cable connection kits on its Website for months; it eventually removed them.)

Cingular Wireless , the biggest wireless carrier in the U.S., notes that the company only launched its 3G HSDPA network in December, and only in 16 markets so far, and that it's too soon to say whether network hogs are a problem.

"All of the carriers have areas where we have the right to shut down people's services," says Ritch Blasi, a spokesman for Cingular Wireless. "We'll keep an eye on it."

— Carmen Nobel, Senior Editor, Light Reading