US mobile giant Verizon Wireless has been forced to pay a $1.25 million fine by the country’s Federal Communications Commission (FCC) for imposing restrictions on its mobile-phone customers.
According to the FCC, Verizon had blocked customers trying to access certain data applications, contravening the terms of its “C-block”, 700MHz spectrum license.
When Verizon received that license it was on the condition that it allowed customers to freely use the devices and applications of their choosing.
In a strongly worded statement, FCC chairman Julius Genachowski said: “Today’s action demonstrates that compliance with FCC obligations is not optional. The open device and application obligations were core conditions when Verizon purchased the C-block spectrum. The steps taken today will not only protect consumer choice but defend certainty for innovators to continue to deliver new services and apps without fear of being blocked.”
The imposition of the fine follows a lengthy investigation by the FCC after it received an informal complaint alleging that Verizon had violated the FCC’s C-block rules. Reports suggested it had instructed a major application store operator to stop its customers from accessing so-called tethering applications online (tethering means using a mobile phone as a modem to obtain internet access for another device, such as a laptop computer or tablet).
At the time, Verizon was charging customers an additional fee for the right to tether using its Mobile Broadband Connect service. Customers using third-party tethering applications, however, were able to bypass this fee.
Besides paying the $1.25 million fine, Verizon is required to notify the application store operator in question that it no longer objects to the availability of tethering applications.
It has also revised its service terms so that customers on usage-based pricing plans can tether using any application without incurring additional fees.
P. Michele Ellison, the FCC’s enforcement bureau chief, said: “This case was the first of its kind in enforcing the pro-consumer open-access obligations of the C-block rules. It underscores the agency’s commitment to guarantee consumers the benefits of an open wireless broadband platform by providing greater consumer choice and fostering innovation.”