So, those tethering apps that Verizon use to block on the Google Play store?  Not cool, says the Federal Communications Commission. In fact, Verizon had to pony up $1.25 million for the trouble, according to a press release issued by the F.C.C. today.

The F.C.C. determined that the nation’s largest wireless carrier, according to GigaOm, was in the wrong in this situation, because Verizon purchased spectrum in 2008 that required it to allow open access to its network. Whoops!

The press release follows:

Washington, D.C. – Today the FCC’s Enforcement Bureau released a $1.25 million consent decree with
Verizon Wireless that resolves an investigation into whether the company had fully complied with the
FCC’s “C Block rules,” requiring licensees of C Block spectrum to allow customers to freely use the
devices and applications of their choosing.
FCC Chairman Julius Genachowski said, “Today’s action demonstrates that compliance with FCC
obligations is not optional. The open device and application obligations were core conditions when
Verizon purchased the C-block spectrum. The massive innovation and investment fueled by the Internet
have been driven by consumer choice in both devices and applications. 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.”
Verizon Wireless offers customers its 4G LTE service on C Block spectrum. Verizon Wireless bid at
auction to acquire that spectrum, understanding that it was accompanied by open device and application
obligations. Specifically, licensees offering service on C Block 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,” subject to narrow exceptions.
P. Michele Ellison, Enforcement Bureau Chief, said, “This case was the first of its kind in enforcing the
pro-consumer open access obligations of the C Block rules. It underscores the agency’s commitment to
guarantee consumers the benefits of an open wireless broadband platform by providing greater consumer
choice and fostering innovation.”
The Bureau launched an investigation after reports suggested that Verizon Wireless had successfully
requested that a major application store operator block Verizon’s customers from accessing tethering
applications from its online market. (“Tethering” is using a wireless phone as a modem to obtain Internet
access for another device, such as a laptop computer or tablet.)
The Commission also received an informal complaint alleging that Verizon Wireless had violated the
FCC’s C Block rules by making such a request. At that time, Verizon Wireless’s terms of service
required all customers who wanted to use their phones for tethering to subscribe to the company’s Mobile
Broadband Connect service, at an additional charge. In response, Verizon Wireless stated that the
additional fee reflected the fact that customers who tether laptops or other devices have the capability to use more data capacity than others. At the time of that response, however, Verizon Wireless required not
only unlimited data plan customers, but also customers who paid for data on a usage basis, to pay the
additional fee. Verizon Wireless asserted that third-party tethering applications could enable its
customers to tether without paying an additional fee.
Under the terms of today’s settlement, Verizon Wireless will make a voluntary payment to the Treasury
in the amount of $1.25 million, and has committed to notifying the application store operator that it no
longer objects to the availability of the tethering applications to C-Block network customers in the
operator’s online market. Verizon Wireless has also agreed to implement a compliance plan, requiring
employees will receive training on compliance with the C Block rules;
future communications with application store operators regarding the availability of applications
to Verizon Wireless customers will be reviewed in advance by legal counsel; and
Verizon will report any instances of noncompliance with the rule at issue that might occur during
the two-year term of the plan.
In addition, the company recently revised its service offerings such that consumers on usage-based
pricing plans may tether, using any application, without paying an additional fee.
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