Verizon will start restricting LTE speeds for its heaviest unlimited-plan customers

Verizon Wireless(s vz) has been trying to coax its remaining unlimited data customers onto its tiered plans for years, and starting this fall it’s providing one more disincentive to remain with its grandfathered all-you-can-eat plans.
On October 1, Verizon will start throttling back LTE speeds on its heaviest unlimited-plan subscribers when they move into congested cells on its networks. What that means is that when the network gets crowded, Verizon will prioritize 4G customers who buy their data by the gigabyte over unlimited plan customers who fall into the top fifth percentile of monthly data usage.
As of today, the top five percent consists of customers who use 4.7GB or more of data each month, though that number will fluctuate month-to-month as traffic patterns change.

Source: Shutterstock / Max Krasnov

Source: Shutterstock / Max Krasnov

Verizon launched the same policy, called Network Optimization, in 2011 for its 3G unlimited plan subscribers, but at the time it claimed to place no restrictions on its LTE network. A lot has changed since 2011, though. Back then LTE devices were a minority, but today they account for 54.5 percent of the devices on Verizon networks, and 76 percent of Verizon’s data traffic traverses its 4G networks.
Verizon is in the final stages of a massive LTE upgrade, doubling or tripling 4G capacity in 350 markets and relieving its original LTE network of the increasing congestion it was seeing in major cities. Verizon’s new networks are currently capable of handling subscribers’ growing demands, but Verizon decided to implement the new 4G policy this year in anticipation of future demand, a Verizon spokesman told me.
Verizon was also quick to point out that relatively few customers will be affected by the policy, and even those who are will see their speeds restricted under relatively few circumstances. Verizon isn’t, for example, implementing a hard or soft cap and then throttling back down to 3G or 2G levels for the remainder of a billing period any time a customer hits it.
Instead, it’s using policy engines to determine when a cell is seeing heavy used and then queuing its customers based on different priority levels. If a cell is uncongested, all customers will have full access to the cell’s bandwidth no matter what kind of plan they are on. If there are, say, 20 users in a cell, throttled users may find their speeds cut by a few megabits.
The more people are trying to access the same cell, the more likely Verizon's new throttling policies will kick in (source: Shutterstock / higyou)

The more people are trying to access the same cell, the more likely Verizon’s new throttling policies will kick in (source: Shutterstock / higyou)

But if a cell is really congested with hundreds users vying for bandwidth — say in downtown Manhattan during rush hour — an affected user might find his or her speeds cut back to dial-up levels. Under such circumstances, nobody would get a solid connection, but subscribers who fall under the throttling policies would see the worst bandwidth.
Verizon said that its new policy will only apply to customers who have fulfilled their contract terms (so if you renewed your data plan under contract in the last two years, you’re safe). The policy remains in effect for a subscriber for the entirety of a billing period. If you’re still in the top 5 percentile of users at the end of that month, then the throttling policy continues for another billing period. But if you’re not, then all restrictions are lifted – at least until your next bill.
Verizon plans to start notifying unlimited plan customers who could potentially be affected by the policy in the first week of August. Training documents about the policy shift, however, leaked to Droid Life on Thursday.
Verizon's LTE coverage in dark red

Verizon’s LTE coverage in dark red

Clearly Verizon’s unlimited plan customers are not going to be happy about this, considering many of them have jumped through years of hoops to maintain their unlimited status on Big Red’s network. I’m sympathetic, but it’s also pretty clear Verizon doesn’t want unlimited data users on its network. While it’s not forcing customers off of those plans, it keeps introducing policies that make it more difficult or less desirable to maintain them.
Meanwhile T-Mobile(s tmus), Sprint(s s) and many virtual operators are embracing unlimited data. While they may not have the coverage of Verizon, their networks are readily available in the big cities where Verizon’s new throttling policies are most likely to apply. If a truly unlimited data spigot is important to you, maybe it’s time to switch.