Don’t Force Verizon to Allow Free Tethering


This post was originally my contrarian feedback to this CNet article. But
check out this August 2013 Update: Free Tethering Debate is Now Moot

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.

7 thoughts on “Don’t Force Verizon to Allow Free Tethering

  1. You said:

    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!

    In fact, tethering is a built-in function of every GSM phone and Android Smartphones. In most countries it is a function required by the GSM specification (and therefore by law). Here in the US carriers have disabled this built-in feature. It is not a hack or work-around to install tethering – it is usually an un-crippling of the device – sometimes by using a hack or work-around.

  2. Hi Alan,

    In the sentence that you quoted, I referred to tethering as a “hack”. But I was not referring to simply turning on a native hardware feature. Instead, I was referring to either installing EasyTether (it throws the phone into USB diagnostic mode) or rooting a phone so that the WiFi hotspot feature can be enabled in violation of the user terms.

    I realize that many smart phones are designed to offer nearby devices internet access via the carrier broadband network. But I bet that you would agree that users who employ tricks to activate this feature are aware that they chose a service plan that did not include its use.

    I interpret your statement to suggest that any hardware capability is inherently owed to users regardless of their service plan. By this logic, I should be able to roam onto competitor networks without cost and call cell phones in Vietnam using my bundled monthly minutes. After all, the phone is designed to roam and to call international numbers and foreign cell phones just as it is designed to call domestic phones. I believe that carriers and users have the right to enter into contracts that include whatever bundle of features to which the parties agree.

    This doesn’t mean that I am patsy for Verizon. I fought and won a class action against Verizon for crippling Bluetooth on the Motorola v710 phone. But in that case, the carrier invoked a registered consortium logo and misled customers by implying a full suite of Bluetooth features. Whether or not you support free tethering for everyone, you might wish to consider my practical argument. If Verizon is forced to treat all data minutes the same (on the phone or shared with other devices), then a great many users will be operating closer to their plan limits. This will force Verizon to raise rates dramatically, because they will be losing the ability to upsell power users and they will also be forced to invest in much more capacity.

  3. Rooting an Android device is simply taking back functionality that was built-in. Using a hack or 3rd party application to enable tethering is a direct result of carriers’ dishonesty in disabling or blocking a standard feature of the users’ mobile phones.

    Actually I’m don’t equate tethering to roaming for free, etc. Tethering is, in fact, a built-in function of the GSM and LTE network and hardware specs and protocols. It is built-in to the phone AND the carrier networks. Charging a fee for tethering is like a carrier saying that calling toll-free numbers is not allowed without paying an additional fee on top of the standard calling plan – or blocking toll-free altogether and requiring you to purchase a toll-free only device and plan (i.e. Wi-Fi hotspot devices). It could also be equated to manufacturers disabling hardware functionality on a desktop computer – then trying to prevent users from re-enabling that functionality (like Intel did with some processors).

    In most of the world, tethering functionality is a legally required function of the phone and is inherently usable with any data service. It is not a function that can be enabled or disabled at the carrier’s discretion as part of a data “plan”. In the US, inferior network protocols were initially developed that did not include data services. US customers did not realize that European and Asian phones included data features by default. These were added later and often did not include built-in tethering. Since US carriers started (since the 1990s) using international protocols like GSM, EDGE, HS(D)PA and LTE – that function is inherent in the service and is being disabled by the carriers to force customers into generating additional revenue streams for them.

    I’m saying that in the US, the carriers should be required to follow the specifications of the networks and devices they use. Having a carrier define what applications or services are used to consume the 2-10GB of data that the customer is paying for is a violation of rights and, in the case of Verizon’s 700MHz spectrum, FCC regulations. Image if your ISP blocked access to WordPress, Google, Netflix, etc.? Tethering allows unrestricted access to the data transfer a customer has already paid for from any client destination to any server destination. If a carrier prevents/attempts to prevent me from speaking to my preferred service in “Firefox on Windows HTML” language instead of “Browser on Android HTML” over my paid-for data connection and my property (the mobile phone device), the carrier is violating my 1st amendment rights, thereby invalidating that portion of the user agreement.

  4. Alan,

    I respect your opinion, but I still think that when I tether without an agreement, I am stealing. We are not referring to users who may have been unaware of the service terms from the onset. Therefore, from my perspective, you don’t believe that a carrier has the right to offer a discount to users that do not need the hotspot feature. It really is that simple!

    I am glad that you brought up the Intel CPU optional feature-set example. I agree that it is analogous…

    When Intel incorporated features into CPUs that were disabled for buyers of discounted versions, they were inviting hackers to attempt workarounds. After all, it’s human nature to unlock a puzzle, especially if it provides added value. But aside from the frustration of feeling like you “paid” for something that you didn’t get (this is an illusion), it may have been smart business decision for both parties. If the user later decides to purchase the unlock code (for previously hidden features), he needn’t trash the entire motherboard–or try to pull out his CPU and sell it on Ebay. Instead, he can upgrade features by simply entering a code that he purchased. As Intel’s competition catches up on the feature/cost manufacturing curve, market forces will prompt Intel to either drop the premium or separate the models (i.e. if the added functionality actually increases the die cost).

    I think the lesson from the Intel debacle, is that users don’t like knowing that a feature under their nose is locked out (a warm chocolate cookie smells good–and it is so-o-o close!). But Again, it is a matter of perception. As long as provider and user understand what is being contracted, I have no problem with it. And so when I occasionally use a hack to tether my phone, I feel guilt for what I am doing. It violates an agreement that I entered into freely.

  5. Incidentally, some “World Phones” work on all major frequencies and technologies (GSM/CDMA/analog). And so, they have the native ability to use Verizon, AT&T, T-Mobile, and Sprint. Does this mean that you, Alan, believe that it is within your right to steal signal from all of these carriers? I’m being a bit flippant, and I certainly do respect your opinion… But it is a thought worth pondering.

  6. Actually, the issue of enabling extra features on an artificially crippled chip is a question of who *owns* the chip. Yeah, it was a great idea for Intel to reduce manufacturing costs by having only a single production line configuration for multiple processor models. It can also benefit the less tech literate or the “too busy to tinker” set – they can get a less crippled system for a small fee. That is the exact market the carriers are taking advantage of – good for them – not for me. So I opt out of their scheme.

    Verizon, on the other hand, agreed to allow their *paying customers* unrestricted device access to their 700MHz bandwidth when they leased it from us, the US citizenry. However, they are restricting their customers in what devices they can connect to the network. Hence the legitimate FCC complaints.

    The crux of your argument is that users that tether use more data. While this is likely true in most cases, carriers already limit the amount of data included in their data plans. Their data prices should reflect the cost of that data usage – and only that usage. Some carriers offer very-low data rates for light users. Offering a 5GB/month plan for a low-low price because they don’t think I’ll use it all is not my problem. Using every drop of the data I have paid for in the manner *I* choose is never stealing.

    That’s like arguing that driving a fully loaded bus on a toll road is stealing because they only get the moderate bus toll and won’t get the aggregate higher toll for all of the individual cars. It’s the usage and wear of the road that is paid for, not the content of the vehicle.

    Being just as flippant – true “world phones” are not sold by Verizon. That’s just ironic branding since their standard CDMA (vs GSM/WCDMA) technology is inferior and doesn’t work in most of the world. You have to buy a more expensive “special” Verizon phone version to do so. Most phones sold through-out the world are true “world phones” and work anywhere in the world – just not on Verizon (or Sprint’s) technologically inferior networks (except for the new LTE network which they contracted to be device agnostic on). The main reason that Verizon still has such a large percentage of US customers is the inherent lock-in of their technology. That won’t last long once LTE becomes ubiquitous and CDMA is phased out.

    No, I don’t believe that using service from a network I have not paid for is a right. However, my true world phone that I bought from a GSM-based carrier already works on all major world frequencies (GSM/WCDMA/HS(D)PA/LTE) and I can pay any carrier I choose and use it their.

    In most other countries, when you buy a phone it will work on any network. “You picks your phone and you picks your carrier.” None of this “exclusive” stuff.

    The reason Verizon charges exorbitant rates to “enable” tethering software is that they would rather you pay for a separate device and data service. I choose not to.

  7. Slight correction:

    No, I don’t believe that using service from a network I have not paid for is a right. But using the service I *have* paid for in the manner I choose *is* a right. My true world phone that I bought from a GSM-based carrier already works on all major world frequencies (GSM/WCDMA/HS(D)PA/LTE) and I can pay any carrier I choose and use it there.

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