FCC to Verizon: No More Tethering Charge!

Good news for Verizon subscribers: the FCC has ordered that Verizon Wireless stop charging tiered data plan customers a tethering fee. This means that they must stop charging their customers on tiered data plans an additional fee for using their LTE smartphones and tablets for tethering. By tethering your Verizon Wireless phone to your laptop, you have the ability to access the Internet regardless of where you are. Additionally, you can tether your cell phone to your desktop computer. While this is an awesome idea, with the tethering charge it could get expensive.

Verizon had been charging a monthly $20 fee to both tiered and unlimited data customers who opt to use their devices as Wi-Fi hotspots, which many customers weren’t happy about. The FCC is backing the consumer, saying the conditions surrounding Verizon’s purchase of C-Block spectrum means that it must allow tiered data tariff customers to use their allocation of the spectrum for any purpose they want – without additional fees. Woot woot!

The conditions state that licensees in this spectrum “shall not deny, limit or restrict the ability of their customers to use the devices and applications of their choice on the licensee’s C-Block network, with certain exceptions.”

Unfortunately, Verizon has said its few remaining unlimited data plan subscribers must continue paying the fee. Though this may seem unfair, it does make some sense considering unlimited data customers who use tethering will consume much more data than tiered-data plan subscribers.

Verizon Wireless will make a $1.25m voluntary payment to the U.S. Treasury to settle the case and adjust its conditions of its usage-based data pricing plans to drop the tethering fee.

“Today’s action demonstrates that compliance with FCC obligations is not optional,” said FCC chairman Julius Genachowski. “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.”

According to Daryl Schoolar, principal analyst at Ovum, the ruling respects basic consumer principles. He compared the scenario to a supermarket shopping experience, arguing that the provider of a product should not be able to dictate what a consumer does with it once they have purchased it. Sounds pretty logical to me!

“If I buy 6GB per month, why should I pay extra to stream that 6GB to another device?” he said. “It would be like going to a store and buying a gallon of milk, and the store tells you that if you’re going to pour that same milk into a cup for your child, then we will charge you an additional dollar. Naturally, your response would be: I’ve already bought the gallon, why do you care how I use it?”

Will this decision encourage you to tether more?