[TELECOM] NYS AG Cuomo settles with VZ Wirelss on "unlimited" data

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Department of Law The State Capitol Albany, NY 12224 518-473-5525 October 23, 2007




New York, NY (Oct 23, 2007) - Attorney General Andrew M. Cuomo today announced that Verizon Wireless has agreed to halt the deceptive marketing of its internet usage plans and reimburse $1 million to customers for wrongful account termination nationwide.

The settlement follows a nine-month investigation into the marketing of NationalAccess and BroadbandAccess plans for wireless access to the internet for laptop computer users. Attorney General's investigation found that Verizon Wireless prominently marketed these plans as "'Unlimited," without disclosing that common usages such as downloading movies or playing games online were prohibited. The company also cut off heavy internet users for exceeding an undisclosed cap of usage per month. As a result, customers misled by the company's claims, enrolled in its Unlimited plans, only to have their accounts abruptly terminated for excessive use, leaving them without internet services and unable to obtain refunds.

"This settlement sends a message to companies large and small answering the growing consumer demand for wireless services. When consumers are promised an `unlimited' service, they do not expect the promise to be broken by hidden limitations," said Attorney General Andrew Cuomo. "Consumers must be treated fairly and honestly. Delivering a product is simply not enough - the promises must be delivered as well."

The Attorney General's investigation uncovered that while Verizon Wireless prominently placed print, television and online advertisements promising "UNLIMITED" NationalAccess and BroadbandAccess for $59.99 per month:

  • "Unlimited" plans had hidden restrictions. Verizon marketed its NationalAccess and BroadbandAccess service plans to consumers nationwide as "Unlimited" despite the plans' limitations. In fact, the plans only permitted limited activities such as web browsing, email and intranet access. Customers who used their plans for common activities such as downloading movies and video or even playing video games online, were unwittingly in violation of the terms and conditions of their service agreements.
  • "Excessive use" of Unlimited Plans resulted in abrupt terminations. Verizon Wireless terminated heavy internet users claiming that the high levels of usage could only have been attained by activities, such as "streaming or downloading movies and video" prohibited by the terms and conditions. These usage restrictions were not clearly and conspicuously disclosed to consumers and directly contradicted the promise of "unlimited" service. Customers found their accounts abruptly terminated for excessive use, leaving them without internet services and unable to obtain refunds for their wireless access cards and cell phones.

From 2004 until April of this year, Verizon Wireless terminated over 13,000 consumers nationwide for "excessive" use of its "unlimited" internet access plans. These customers were subsequently unable to use their Verizon Wireless cell phones and modems to connect to the internet.

Verizon Wireless has agreed to reimburse all terminated consumers for the cost of wireless access cards or cell phones purchased by the consumer in order to utilize Verizon Wireless's wireless internet service. Verizon Wireless estimates the total amount of restitution to be approximately $1 million nationwide. Verizon Wireless has also agreed to pay penalties and costs of $150,000 to New York State and revise the company's marketing of its wireless internet access plans.

Verizon Wireless fully and voluntarily cooperated with the Office of the Attorney General throughout this inquiry. Since April of 2007, Verizon Wireless has voluntarily ceased cutting off customers based on their data usage and no longer prohibits common internet uses.

The case was handled by Justin Brookman, Chief of the Attorney General's Internet Bureau, with assistance from Investigator Vanessa Ip.

_____________________________________________________ Knowledge may be power, but communications is the key snipped-for-privacy@panix.com [to foil spammers, my address has been double rot-13 encoded]

***** Moderator's Note *****

When I read this, I couldn't help feeling like saying "Well, D'Uh!", and while that may seem heartless, it does bring up an important point: we technical professionals often forget that laymen don't have our understanding of the fundamental limits that apply to cellular and other "shared use" systems.

Still, I find it hard to believe that laymen didn't understand that no system in the world is "unlimited": if the sign at the buffet says "All you can eat", that doesn't mean that you can take the food home with you. Some things have to be understood.

Am I lost in the ozone here? Wouldn't someone qualified to use a laptop be expected to understand that there are always limits?

Bill Horne Temporary Moderator

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Reply to
danny burstein
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Far too often technical professionals are 'disconnected' from laymen, especially today with lay people using so many electronics devices.

In the old days of the Bell System, new hardware and software/dialing was carefully tried out in focus groups then in small markets before rolling out nationally. Not all developments made it out the door since in practice they didn't work very well. At the time they were developing the nationwide customer dialing plan, they considered a variety of approaches. Back then many subscribers didn't need to dial

7 digits for a local number. Today stuff rolls out the door whether it's user friendly or not or "honest" or not.

I must disagree. Actually, I think such buffets do have signs, perhaps discrete, that prohibit take-out as well as prohibiting sharing.

In the course of telephone service, historically, "unlimited", meant just that, you could use your phone for as long as you wanted. The only limitation was a residence line was for residencial purposes only and the geographic area, and these were clearly spelled out. (Later computer BBS's were required to use business lines which was controversial). Today I have "unlimited" telelphone service at home and it's no different than the unlimited I had as a kid, except to a wider geographical area. It was made clear my unlimited is the continental US only.

Again, I must disagree. There are no "qualifications" to use a computer today; they have been purposely designed to be used by anyone. By design, lay users normally have no idea nor need to know on what's going on 'under the hood'; it;'s all automated. Today's computers are so fast and powerful users normally don't have to worry about limitations on disk or core memory space or CPU speed. Think back to the 1980s when one had to install software and issue commands, and carefully check that speed and space were adequate to support a application.

Years ago, a call 3,000 miles away lasting three hours would be quite expensive. Today from home I could place such a call three times a day and no one would care. So, to a lay user, being able to download movies or other intensive applications is no different than calling California often.

I also want to point out that in the old days the telephone rates were clear and readilly available, either in the front of the phone book or from the operator 24/7. A knowledgeable Service Rep was easily available during business hours; there was no "voice mail jail" back then. Today, it's a nusiance to call "customer service", and different employees quote different rates. When I got my cell service, I got three different quotes from Verizon, the highest from their stores, next highest from the Internet, and best by phone. It's sad to say but all carriers play these little games.

The carriers really need to clean up their act and be honest with the public about their services; and stop the subtle 'bait and switch' or micro-fine-print loaded with restrictions a lay person can't understand.

Pick up an issue of Consumers Reports. Every month they have a report on various scams being played on consumers; it's disgusting what businesses try to pull.

I am glad the State of NY went after Verizon as they did, but I think it's only the tip of the iceberg.

Reply to

Wouldn't someone making a public offer for sale of goods/services be expected to carefully examine the offer first to ensure that what it said was true?

Sure, there's going to be a real world limit. I'd take that to be (maximum bandwidth x 24/7).


Reply to
Dave Garland

If a sign at a buffet says, "All you can eat", that doesn't mean people with large appetites are banned. Your analogy would perhaps apply if someone were reselling (or sharing) their bandwidth rather than consuming it themselves.

Consumers have been "educated" by Verizon, etc. that the Internet is not only an appropriate delivery medium for streaming content, but the primary medium of the future. When they boldly advertise "Unlimited" one tends to take them at their word and use it for the purposes they've been promoting.

Streamed audio/video content (ala Youtube, etc) doesn't consume a significant amount of the typical broadband connection. And online video games are probably a lot less. The layman isn't going to automatically understand that wireless as provided by the cell phone provider is significantly different from wireless provided by the DSL/cable router the same companies provide with land-based service.

My sister uses a laptop. She wouldn't have a clue what you are talking about. ;-)

Reply to

If the sign at the buffet says "All you can eat," that *does* mean that you can eat as much as you want on that visit to the restaurant for that meal.

My dad tells a story about being on a Navy ship in the 1950's. When the sailors finally had shore leave, they went to an all-you-can-eat place, having prepared by eating very little for breakfast and lunch. The manager saw that they were not slowing down after four servings, so he finally told them they had to leave. All the same, since he didn't keep the "all you can eat" promise, they didn't have to pay for their dinner.

If you advertise an Internet service as "unlimited," you have to know that you're going to attract people who use much more than average.

--=20 Linc Madison * San Francisco, California * Telecom at Linc Mad d0t c0m URL: <

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Reply to
Linc Madison

I have Sprint ans my data is unlimited, never had a problem but then again I'm not a data hog. Each day I take my time data from my crew and upload it to the company server, takes about 2 minutes, not sure how much it is, but Sprint has never said anything about it in the 3 years I have done it.

Reply to
Steven Lichter

In article ,

If the seller _WILL_NOT_ tell people what the limits are, _and_ terminates services for violating those limits, then there *is* a problem that has _NOTHING_ to do with any 'technical' issues.

It's called "bait and switch" advertising -- selling one thing but delivering =something=else=.

If you _honestly_ tell them what you're offering, and simply enforce those limits, there is no problem.

When people *cannot* find out what the limits are (and apparently they were not 'fixed' limits, either, rather the 'top xx%' users. Of course, there will _always_ be a 'top xx' percent of users, providing an excuse to keep terminating lower and lower volume users.)

Cable TV at the hotel is effectively "unlimited" -- you can watch it every second you're checked in, for a fixed price.

Land-line telephone is effectively "unlimited" -- you an talk as often as you want, as long as you want, and as FAST as you want.

- *Everybody* understands that 'unlimited' Internet access is -not- "infinite" access. That, -at-best-, you are limited by the link speed of the link connecting you to the rest of the 'net.

"All you can eat" means 'all you can eat while you are there', yes. But suppose the buffet ha an "UNPUBLISHED" policy that "since 98% of our customers never go back for more than a 3rd plate, anyone who goes back for a 5th plate will immediately be asked to leave the premises and _never_ return". EVEN IF they'd paid for "A year of Sunday buffet's" in advance.

This is an _exact_ "buffet" equivalent to what Verizon was doing.

1mbit/sec * 86400 sec/day * 30 day/month == 360 gigabytes/month.

claiming to offer multi-megabit "unlimited" service and disconnecting at a few gigabytes to a few tens off gigs/month -does- seem 'just a little bit' inconsistent. If their system is _really_ 'oversold' to that extent, they need to either upgrade the facilities to reduce the degree of overselling, or change the marketing to accomplish the same thing.

_Honest_ advertising would have said -- as a number of other providers *DO*, that "'unlimited' means means 'unlimited access' -- you can connect when you want, for as long as you want, with no connection charges. It not mean that you can use the full bandwidth all the time. Usage over xx gigabytes/month will result in throttling back to 64kb/sec.

People understand limits exist.

People expect to: 1) to be =unable= to _exceed_ the limits (i.e. technology enforced) -OR- 2) to be _told_ what the limits are *and* have a way to monitor/measure usage so as to modify usage as needed to stay under the limits.

People do *NOT* expect; 1) to have contracts/services *terminated* for exceeding limits they were: A) not informed of in advance B) not _able_ to find out, even after the fact, -what- that limit is. C) not provided any tracking tools to provide 'early warning' of when behavior modification is needed, or indication of how much change is needed to stay in compliance.

Verizon did _not_ do any of the 'expected'. They DID do _all_ of the 'not expected'.

Verizon -deserved- what they got.

Reply to
Robert Bonomi

It certainly seems that they should publish a limit if they have a limit. I've heard of cable modem users getting into the same trouble. Verizon could have, of course, started slowing down data to heavy users to limit their total usage instead of cutting them off. This, of course, should also be revealed. I note in the same package of telecom digest messages I received today that Verizon is promoting their

20Mbps FIOS service. I wonder what sort of limits apply on that? Maybe you get a minute's worth of usage a month? This does raise another issue, though. say they have several thousand users running at 20Mbps. What kind of bandwidth to they have coming into their CO? Of course, not everyone is continuously downloading 20Mbps continuously at the same time, but I still wonder what the incoming bandwidth is and what percentage of the time it is saturated.


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***** Moderator's Note *****

I've just thought of something: Verizon (and maybe others) may not even have the capability of measuring usage by individual clients.

I know this sounds unbelievable, but please remember that Verizon is a union environment, and its management is loathe to introduce new skillsets into the workers' training: virtually every new technology _must_ be integrated with existing monitoring systems, and sometimes features that an ISP may use routinely, but which require direct interaction with equipment in a central office, won't be used because of the costs associated with having a union employee execute a manual procedure.

If that's true, it would explain a lot: company maintenance is alert-driven, and a supervisor who has a high-water-mark alarm on his console would want to "solve" the problem as quickly as possible, without paying any overtime, so I suspect Verizon may be simply looking to cut back enough traffic to retire the alarm rather than looking for specific traffic counts or other user-based statistics.

Anyone out there who has current info on Verizon's internal monitoring capability and procedures?

Bill Horne Temporary Moderator

Reply to

Verizon FIOS has had 20Mbps download for some time already. The significant part of the recent announcement was the 20/20 symmetry, up as well as down.

I wouldn't be surprised if the movie/music industry sued Verizon for "promoting and facilitating copyright infringement", because "obviously" the only reason for needing such fast uplink speeds is for sharing copyrighted video/music. :-/ Although more than likely the RIAA will just try to get a list of subscribers with that configuration and then sue them individually, citing the speed as proof of infringement.

I'd love to have that sort of speed. I run my own mail/web server, and being on the road a lot I depend on remote access to the various files on my systems. I thought I'd died and gone to heaven when I was able to upgrade my DSL link to ~1Mbps uplink from the original 128Kbps.

Reply to

I don't think the speed itself is a problem, rather the usage. As mentioned, if customers were downloading movies for solely their own use, Verizon is at fault. But if it was actually for file sharing or bootlegging, that's another story; that would be equivalent to sneaking buffet food out a side window to friends.

I have no sympathy for copyright cheats who steal movies and music.

Reply to

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