Don't Force Verizon to Allow Free Tethering

I originally wrote this piece in June 2011 as feedback to this article at CNet.
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A Dissenting Opinion — This one should go to the carriers
But first, in classic Wild Duck style, some background...

Smart phones can act as an internet modem, even without a paid plan for off-device data.

Tethering refers to the use of a mobile phone as a modem for either a directly attached PC (using a USB cable or Bluetooth connection) – or even better – by broadcasting a Wi-Fi signal to several nearby devices. They each access the Internet as if they were accessing a router in a home or restaurant.

As of Summer 2011, Verizon charges smart phone users $30 for a use of the Internet on the phone itself (the most popular mid-tier plan).* But they charge an additional $60 for the most popular Hot Spot plan, enabling the Smart Phone to broadcast Wi-Fi Internet connectivity to nearby devices. Verizon expressly forbids subscribers to use technical tricks to obtain this added functionality without paying for added feature, even if the user stays within their monthly data allowance and even though the phone has the native ability to do so.

Hackers have methods to use PCs and gaming devices through the mobile phone network, while making it appear that the data is used on phone itself. Most of these tricks require rooting the phone, a complex process that may "brick" the phone or void the warranty. (At least one Android tethering app doesn't require rooting the phone).

A new complaint to the FCC pushes Verizon to allow free 4G tethering without added cost for the use of other devices on the carrier's networks. The plaintiffs argue that they are paying for a fixed data allowance and that the phone they purchased from the carrier clearly includes the tethering feature. In theory, they are asking "Why should Verizon care on which device we access the Internet. Either way, we are paying for the connectivity and the overall amount of data."

Carriers charge more for off-phone data use (a PC, camera or gaming device).

But Verizon does care! They realize that a single, palm-size device with a 4 inch screen pulls less data through overloaded towers than 5 or 10 PCs, digital cameras and even home theaters – all using the Internet at once. (Yes! Using the wireless carrier as a backhaul, a single smart phone acting as a WiFi router can provide internet connectivity for an entire home! My Droid Charge can service 10 wi-fi devices!)

Will plaintiffs succeed in a class action against Verizon? Can users force the carrier to allow tethering without a cost premium? If they do, I think that we all lose...

I can hardly be called an advocate for the carrier. Jonathan Zdziarski once led a class action against Verizon to stop them from crippling Bluetooth on the Motorola v710 phone. I was a plaintiff in that suit. We won on the basis that the phone and the packaging displayed a Bluetooth logo which conveys a certain meaning. I also played a role in persuading carriers to unlock the power of user equipment, to allow a native handset GUI, and – eventually – to allow rooting, at least with indifference.

I am a heavy data user. Although I love what Android has done to my smart phone, I prefer to use a PC with a PC OS, instead of the tiny screen on my phone. And as an acknowledged hypocrite, I will admit to occasionally using a tethering application, so that I can get Internet access on the go.

But, I am lobbying for the carriers on this one. It ain’t easy to stick a needle in my own wallet, but let's play Devil's Advocate for a moment. Let's look at this from Verizon's point of view...

Verizon smart phones are bundled with unlimited data for use on the phone itself (you could add a Bluetooth keyboard and even an HDMI monitor, but not, according to Verizon, serve up Wi-Fi to a other gadgets. That option is available for an additional fee of $60/month.

Given the wording of the license covenant, it is still possible that a judge may side with Verizon. Although the phone is designed to support tethering and Wi-Fi, it could easily be argued that these were incorporated to facilitate carrier options. After all, a tethering "app" is not an application as envisioned by the law. It isn't a game, an email client, or a restaurant finder. It is a hack -- a work around!

But let's say that the judge interprets the restriction literally and awards the claim to the plaintiffs (presumably to all Verizon customers). If I were the carrier, this could only result in one action. Good for some phone users, but bad for most: I would change the pricing model. No longer could I offer unlimited data for phone users, because each phone can act as a mini ISP and router. It could effectively pump an entire building and all the splitters and switches within. It could service an auditorium or a trade show.

You get the point? Carriers would bill all smart phones for data by the gulp instead of the pipe. No law can prevent this. If you ship 1 FedEx package a month, you pay ‘X’. If you ship 30 packages, you pay more. In effect, we return to metered use. If you use 2GB, you get price A. If you use 8GB, price B, and more than 10G, price C. To those who use just the phone, this fight makes you the loser. You will occasionally hit the limit.

I can think of only one other alternative. Perhaps, Verizon will simply raise the price for all you can eat. But the judge may allow a discount or rebate to users who never tether their phones. This scheme could effectively bring back unlimited use in the palm of your hand, while forcing those of us who tether to pay our dues. As we should!

* Before users opt to tether a phone, they must first choose a data plan for the handset itself. Verizon charges for each class of communications that accesses their network: voice calls, text messages, and internet use (this includes web surfing, email, movies, video calls and all collaborative or cloud activities).

Verizon has experimented with many pricing plans for data, and in a bout of extreme schizophrenia, they are bouncing all over the map. When the most advanced phones were just “feature phones” but not smart phones, users had the option of just a few megabytes or “unlimited” data access. But the term unlimited was vague at best. At first, it meant “unlimited, but with TOS restrictions”. The user may not operate a server, access a torrent, watch videos, and – well – they cannot live outside of a subterranean cave. Soon, Verizon figured out that every application incorporates some of these protocols, and so they capped the unlimited plan at 5GB. Later, as AT&T and Sprint began building out their 3G and WiMax networks, Verizon changed the definition of unlimited to mean really, honestly, truly unlimited! (By a quirk of timing, I am grandfathered into this definition. No worries!). But then, Verizon gained the 4G/LTE advantage and so they didn’t need to be so magnanimous. Now they have no unlimited plan for newly issued contracts. Instead, users choose either 300MB, 2GB, 5GB or 10GB. To add confusion, at the end of 2011, Verizon is doubling the data allotment on all but the smallest plan, so for now, the plans are 300MB ($20/mo), 4GB ($30/mo), 10GB ($50/mo) and $50GB ($80/mo).

Ellery Davies clarifies law and public policy. He has used cell phones since 1983, the year of the first commercial network. He has used Verizon Wireless since 1986 (formerly Bell Atlantic, Nynex & New England Telephone).

Feedback is always welcome.