Can you hear me now? Perhaps not too well. In fact, currently Verizon Wireless is being criticized that it does not seem to be using its communication strength to broadcast an important recent business development by the mobile phone giant. While consumers are well aware the company now provides service with Apple’s iPhone, what they may not know is what is in store for Verizon customers who use large amounts of data.
While it is apparent that Verizon is selling the iPhone 4 with unlimited data plans for a limited amount of time, there is now a catch for consumers in the top 5% of Verizon’s data users. The company has just announced the change in a note on its Web site that once a customer has crossed the 5 percent threshold, Verizon will reduce your data speeds “periodically … at locations and times of peak demand” through the next billing cycle. And analysts are questioning the seemingly vague parameters. There is the sense that Verizon’s level of transparency is not sufficient because the information is not clear as to if customers will be notified when they are approaching or have crossed the threshold. Nor is it clear what the typical amount of data that a smartphone user consumes and how much data those in the top five percent typically consume. These actions could lead one to question the role of Net Neutrality issues and what part the Federal Communications Commission can play.
“Actually, we don’t think it’s necessarily a Net Neutrality issue,” comments Art Brodsky, Communications Director of Public Knowledge, a Washington, D.C.-based public interest advocacy organization dedicated to promoting public interest in access to information. “It’s more one of the company not having the infrastructure to support the service it will sell. We also note that on the same day that the throttling announcement was made, Verizon also announced it was going to spend $3.62 billion to buy back 100 million or so shares of its stock. Imagine what the money could do if that money was invested in its network.”
The matter is further complicated given the fact that such noted research organizations as Pew Research Center have consistently provided statistics that demonstrate African-Americans out-index in mobile phone expenditures per month, use more features on their phones and access the Internet through mobile web. In addition, the Nielsen organization recently stated that African-Americans are more likely to own smartphones than the mainstream in the U.S. Given this level of consumer behavior it would seem likely as to which demographic may end up being affected most by Verizon’s new rules and, therefore, remain vigilant in usage and monthly bill review.
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