Last Friday, AT&T
gave notice that it would henceforth take steps to block unauthorized tethering. For those who aren't familiar with the term, "tethering" is the practice of using a cell phone's data link to provide wireless service to a desktop or laptop. Now, Verizon
is evidently following suit. Customers who have previously had no trouble using tethering on jailbroken devices are reportedly being redirected to Verizon's advertising page for tethered data plans.
AT&T and Verizon have both justified their moves by noting that they don't prevent customers from tethering--they simply charge for the privilege. Verizon, however, has come under particular scrutiny thanks to a clause in the agreement the company signed when it licensed the 700 MHz C Block it uses to run its LTE network. The media advocacy organization Free Press has challenged Verizon's previous attempts to compel the Android Market to remove tethering apps on the grounds that such pressure was an effort to "deny, limit, or restrict” the ability of their customers to use the applications or devices of the customers’ choosing.
The conceptual 'tether' exists between the phone and PC
Verizon's response states that because it offers tethering as a plan option, it's allowed to block customer attempts to circumvent its lockout. The spectrum rules that govern Verizon's use of the C block permit "nondiscriminatory tiered or usage-based pricing plans that require customers with greater capabilities or higher usage patterns to pay a higher fee."
The question here is whether the "deny, limit, or restrict" clause trumps Verizon's argument that it's cracking down on end-users who consume a service. Free Press alleges that Verizon's tethering agreement constitutes double-dipping thanks to the company's pricing structure, where it costs $20 to add tethering to an existing mobile data plan. Customers who do so are only allowed to transfer 2GB of data a month, with each GB thereafter costing an additional $20. That's double Verizon's overage price of 10/GB for standard data plans. The additional costs reportedly stack; an end-user who has exceeded the 4GB data plan attached to his mobile phone and the 2GB tethering plan is charged a total of $30 for their next gigabyte.
The problem with Verizon's argument is that it's charging tethered customers more per GB than untethered customers once the data plan's limit is reached. The fact that tethered devices tend to use more bandwidth than untethered devices doesn't explain why a tethered GB is twice the already outrageous cost of an untethered GB. Verizon would have an easier time justifying a base charge for tethering if it still offered unlimited data plans but there's no good reason for the company to be double-charging customers for data use. The FCC is going to examine the issue, but there's no word on when that's going to happen.