Verizon Wireless' prevention of Android phones from downloading apps that turn the devices into mobile hotspots has earned it a $1.25 million slap from the FCC.
Verizon Wireless has agreed to pay the U.S. Treasury $1.25 million, after the Federal Communication Commission's Enforcement Bureau found that the carrier hadby preventing customers from downloading Android apps that turn a smartphone into a mobile hotspotviolated some conditions of its C-block spectrum purchase.
As GigaOm first reported, Verizon initially blocked the apps because it currently charges customers $20 a month to use the mobile hotspot feature on their smartphones.
In July 31 statement, the FCC puffed out its chest and declared justice served.
"Today's action demonstrates that compliance with FCC obligations is not optional," said FCC Chairman Julius Genachowski. "The open device and application obligations were core conditions when Verizon purchased the C-block spectrum."
The statement went on to explain that Verizon currently uses the C-block spectrum to offer 4G Long-Term Evolution (LTE) services to subscribers, but when it purchased the spectrum, it was with the understanding that licensees offering service on the 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 very few exceptions.
"This case was the first of its kind in enforcing the pro-consumer open-access obligations of the C-block rules," added Enforcement Bureau Chief P. Michele Ellison.
The statement noted that the Bureau first began investigating the matter when it learned that Verizon had succeeded in its request that a "major application store operator" block customers from downloading the tethering apps.
Under the terms of the settlement, Verizon will have to notify Google, the app store operator, that it no longer objects to the applications, as well as to implement a compliance plan that includes training its employees about complying with C-block rules; communicating with app store operators about the availability of apps to customers; and reporting any instances of noncompliance with the new plan.
GigaOm adds that Verizon also won't be able to charge customers on its tiered data plans the $20 a month tethering fee, though it can charge those customers who are still on its unlimited data plans.
On June 28, Verizon began offering Share Everything plansand soon afterward removed all mention of its tiered plans from its site, though a Verizon spokesperson has told eWEEK that existing customers can "continue to use and purchase the Nationwide plans."
The Share Everything plans allow up to 10 devices to share a bucket of data. The price of the data bucketthey start at $50 for 1GBis added to a fee for each type of device that's added. Smartphones, for example, are $40 each a month. Mobile Hotspot capabilities are said to be included in the package.
AT&T, a month later, introduced similar plans, called Mobile Share, which also include mobile tethering in the cost.
Alas, subscribers to networks other than Verizon won't find themselves (potentially) $20 richer each month. Because the FCC ruling was related to Verizon's spectrum purchase, it's only big red that has to stop being such a meanie.
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Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.