The Federal Communications Commission was able to squeeze $1.25 million out of Verizon Wireless today. Verizon entered a settlement with the FCC where the agency promised to terminate an investigation into whether Verizon violated terms and conditions of its holding of C-block spectrum. Verizon promised as part of its license agreement that it would allow third-party applications and devices to be used on its C-block network.
Verizon asked a third-party application store to block access to eleven tethering applications that customers might use to connect devices to Verizon’s C-block network without having to pay the carrier an additional monthly fee.
The $1.25 million penalty won’t hurt Verizon’s bottom line. The company has made a decision that it is not worth a fight about whether this rule was not applied appropriately. It does raise a red flag about the FCC’s willingness to have public hearings on these matters. What would have happened if another firm, much smaller than Verizon, were faced with these allegations?
Fighting it out in a hearing where evidence could help determine if there was a violation would have brought some certainty to a finding. It would have been nice to know if there were legitimate concerns about compliance and network management costs directly resulting from allowing access by third-party apps salesmen.