& cplSiteName &

Verizon Applies 3G Throttling Policy to LTE

Sarah Thomas
7/25/2014
50%
50%

Back in 2011, Verizon began throttling its heaviest 3G data users in a bid to move them to its higher capacity LTE network, but now -- three years later -- it's applying that same policy to 4G unlimited users. (See Verizon Embraces 4G Traffic, Throttles 3G.)

Verizon Wireless has so far been the most effective US wireless operator at migrating its customers away from unlimited data plans. Consumer Intelligence Research Partners (CIRP) reported this week that, of the four largest US operators, Verizon has the fewest still on unlimited -- 22% compared with 44% on AT&T Inc. (NYSE: T), and 78% on Sprint Corp. (NYSE: S) and T-Mobile US Inc. , which both still market unlimited data. (See Verizon Continues 4G LTE Capacity Spend in Q2 .)

Now Verizon wants to drive those numbers even lower by applying its "Network Optimization" policy to LTE as well. Droid Life first discovered that it will begin slowing down network connections for those heavy unlimited data customers that "have fulfilled their minimum contract term" on LTE and are on a heavily-trafficked cell site. The policy kicks in on October 1, and Verizon says that throttling could last as long as the current billing cycle or even into the next.

Wondering if you could be one of the affected customers? Verizon says it should only affect its top 5% of data users, but it will apply to those who meet the following criteria:

  • have an unlimited data plan;
  • are in the top 5% of data users, meaning they use 4.7 Gbytes of data per month or more;
  • have fulfilled their minimum contract term, and;
  • are on a congested cell site.

These customers can, of course, use WiFi more often and better monitor and manage their network usage with Verizon's data tools, but the carrier is hoping they'll choose the option to move to one of its More Everything shared plans and away from unlimited. (See Verizon Manages Its Own Data Destiny.)

While its 3G throttling policy was aimed at migrating customers to LTE -- it said at the time that it welcomed the traffic on its 4G network -- applying it to LTE is all about economics: Shifting the remaining 22% of its customers away from unlimited deals will bring in more revenues for the operator, even if the policy only affects a small subset of customers.

CIRP says that because of Verizon's success in squashing unlimited plans, 51% of its customers pay at least $100 per month, compared with only 47% at Sprint, 46% at AT&T, and 33% at T-Mobile. Usage-based data plans and shared buckets are clearly the most attractive option for Verizon, and it's hoping to increase their adoption by making unlimited data increasingly less attractive to its customers.

— Sarah Reedy, Senior Editor, Light Reading

(12)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Michelle
50%
50%
Michelle,
User Rank: Light Sabre
7/28/2014 | 11:21:48 PM
Re: 3G v LTE
"So how can companies make intelligent decisions to bring in the profits without seeming unfair to their customers?"

This is a great question. Internet service providers happily throttle traffic at regular intervals.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
7/28/2014 | 7:01:19 PM
Re: 3G v LTE
Mark, you're right.  As a business geek, I admire companies that know their profitability limits.  As a customer before anything else, I hold these companies in great disdain. 

Signed, Conflicted in KC

Anyway--good points to all my, um, points.
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
7/27/2014 | 3:24:06 PM
Re: 3G v LTE
For the we don't want you part, the insurance industry works this way, I mean for car insurance, even if you aren't at fault but an accident magnet, you cause too much cost, your insurance goes up or you can't get insurance.

In theory, I agree with you, they shouldn't change unlimited, but basically they are abiding by their contracts and the industry itself is moving to per bit buckets, hopefully that means better control of costs and the competitive market will make it go towards lower costs.  Whether it goes mostly to the bottom line or lower fees, well we can all debate that later.

I definitely agree on your point of congestion control, though this should only be a damage control measure until the bottleneck relieved, some connectivity for all is far better than everyone just loosing random packets and having to retransmit.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
7/27/2014 | 2:46:29 PM
Re: 3G v LTE
I'm a throttling opponent, I guess (I didn't really have a throttling position until just now), but aside from the lack of customer focus here, isn't throttling something all carriers do (wireless and land-line, and even utilities) at some point or other to manage volume load?

I guess the part that struck me as fair with this post was that throttling might be done in a congested cell site.  That seems reasonable.  Now, I think everyone should equally be throttled down because, other than in an emergency, the true issue is less than stellar network planning.  I guess throttling just a few limits the unhappy customers and Verizon is really telling those higher volume users, "We don't care if you leave and, actually, we'd rather you do."

The wireless industries is one that has embraced the idea of "bad customers."  As a customer of many things, I don't like that concept at all.  But in a competitive industry, and if you are the scale of Verizon, it probably is shareholder-friendly.

Heck, even the term throttling smacks of a non-customer-focused view.  I know it's been around for a few years, but the electricity industry has managed peak levels for decades and surely used some other softer phrase.
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
7/27/2014 | 1:58:30 AM
Re: 3G v LTE
The question will be how much will they be throttled and for how long?  Didn't seem like it was very specific.  My own speculation is that Vz cares more about PR than these high bandwidth users.  Any readers on an unlimited Vz plan?
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
7/26/2014 | 12:36:00 PM
Re: 3G v LTE
Exactly Dan,  I can't remember the pricing that many years back when data was unlimited but it was for the most part more expensive than today.  I think that is the reason why many users, myself included, who really weren't using that much data switched off the plans when they could finally save money.  Verizon will figure it out in a way that benefits the majority of their customers.
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
7/26/2014 | 11:53:30 AM
Re: 3G v LTE
Verizon operates a very effective network with excellent coverage and speeds. Some of that has to obviously do with how the company has been able to mete out unlimited data. I did not know that the company had so few unlimited subscribers, which likely is limited to businesses and power users that are paying a ton of money for those services.
kq4ym
100%
0%
kq4ym,
User Rank: Light Sabre
7/26/2014 | 9:03:07 AM
Re: 3G v LTE
But as the customer useage changes and the highly used cell sites get overloaded, what's to protect the consumer from unreasonable changes to pricing schedules. 

If the changes affect the  "top 5% of data users, meaning they use 4.7 Gbytes of data per month or more" today, what's the rule going to be next month? 

So how can companies make intelligent decisions to bring in the profits without seeming unfair to their customers?
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
7/25/2014 | 2:53:09 PM
Re: 3G v LTE
My first thought was, darn I should have stayed on my unlimited plan!!!  But the reality is that I still save a bunch per month and when I have heavy usage I can pay for it.  For the consistently heavy users, staying unlimited can make a lot of sense.  As you point out, it is on congested towers so unless all the heavy users are there, it will affect a very small percentage of users.
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
7/25/2014 | 1:58:57 PM
Re: 3G v LTE
Sarah, Verizon's policy is far more generous than AT&T's for heavy users.  I believe that AT&T starts throttling around 3 GB.  I just moved off my AT&T unlimited because they finally created a plan to save me money (I am not a heavy user but the newer plans would have cost me more).  If Verizon has plans that make sense economically, the users will migrate.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Huawei Video Resource Center
You Mobile Enhances Customer Experience With Huawei BSS

2|28|17   |     |   (0) comments


James Weng, CEO of You Mobile, shares the experience of enhancing customer experience in Spain and trying to establish the best Chinese community based on Huawei BSS.
LRTV Interviews
Ericsson's CEO on 5G, Trucks & More

2|28|17   |   04:57   |   (0) comments


At MWC 2017 Ericsson CEO Börje Ekholm talks about early 5G developments, the importance of partnerships and more.
LRTV Custom TV
Introducing OrbTV: Netscout's MWC Day 1 Recap

2|27|17   |   8:35   |   (0) comments


The executive team of Netscout reviews the first day of Mobile World Congress in Barcelona. Stay tuned for OrbTV -- Light Reading and Netscout's full coverage of the show. We'll have daily show recaps, service provider interviews and tours of the show floor.
LRTV Custom TV
Innovation at MWC: Low-Power IoT for Scottish Sea Lions

2|27|17   |   6:32   |   (0) comments


Light Reading's Liz Coyne tours the GSMA's Innovation City at Mobile World Congress 2017. A key theme of this year's event is how low-power or no-power IoT devices could become a part of our everyday lives. Imagine a world in which over 15 billion shipping pallets communicate with cellular networks down the entire supply chain. Or a parka that reveals your ...
LRTV Huawei Video Resource Center
Huawei Will Accelerate the Spread of the Video Business

2|27|17   |     |   (0) comments


What is the future of the booming video business? What changes will happen to the video industry chain in the future? Hunter Hu, VP of Huawei Video Product Line, shares his viewpoints and explains how Huawei can be an enabler and accelerate the spread of the video business.
LRTV Huawei Video Resource Center
Frost & Sullivan's Jonas Zelba on Going Beyond Connectivity

2|27|17   |     |   (0) comments


Telecom operators across the globe are trying to understand what can they offer beyond connectivity. Operators are already introducing new and innovative services but they are faced with challenges due to unclear business models. Jonas highlights that no one operator can offer all the services itself. Operators in the Middle East should look within their ecosystem ...
LRTV Huawei Video Resource Center
IDC's Paul Black on Cloudification

2|27|17   |     |   (0) comments


Paul Black from IDC shares his insights on how cloudification is expected to combile all aspects of digital transformation.
LRTV Huawei Video Resource Center
Industry Expert Michael Howard Talks About Cloud Native

2|27|17   |     |   (0) comments


Cloud Native is a really nice term and a lot of people are using it. But most of them have their own definition of what Cloud Native means. Michael Howard offers his take on the terminology.
LRTV Custom TV
4.5G Evolution: Peter Zhou on Advanced MIMO Technologies & 5G Business Prep

2|25|17   |     |   (0) comments


In the process of service transformation, operators need to catch three major opportunities and start deploying in 4.5G networks, such as video, household broadband access and digital transformation of vertical industries. 5G is coming. Operators don't need to wait for it to happen but should progressively deploy 4.5G networks by introducing 5G-oriented ...
LRTV Custom TV
What WTTX Can Deliver

2|23|17   |     |   (0) comments


Mohamed Madkour explains the benefits of WTTX while Dimitris Mavrakis discusses the challenges of delivering home broadband access.
LRTV Custom TV
Huawei on Mobile Broadband

2|23|17   |     |   (0) comments


Mohamed Madkour shares his vision on MBB for the next three years.
LRTV Custom TV
Analysys Mason Talks About the Future of Digital Operations

2|23|17   |     |   (0) comments


The future of digital operations has three key aspects: 1. Highly automated operations for both service and network; 2. Highly converged BSS/OSS for business and resources; 3. Highly merged management and control for real-time cloud native operations.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Uber's HR Nightmare: Company Investigates Sexual Harassment Claims
Sarah Thomas, Director, Women in Comms, 2/21/2017
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Cloud Rains on HPE Earnings
Mitch Wagner, Editor, Enterprise Cloud, 2/24/2017
Verizon Fixed 5G Tests to Top 3Gbit/s?
Dan Jones, Mobile Editor, 2/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Gotta Get the Best Angle Click Here
To maximize the rolls...
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.