At the 11th hour, Verizon decides to cancel its controversial throttling plans

Today was supposed to be the day that Verizon’s new 4G “network optimization” policy went into effect. Verizon’s heaviest data users on grandfathered unlimited plans faced the possibility of having their speeds throttled down to make room on the LTE network for customers who pay for data by the gigabyte. But Wednesday afternoon, Verizon said it would pull the plug on the new policy before it went into effect.

Here’s Verizon’s statement:

Verizon is committed to providing its customers with an unparalleled mobile network experience.  At a time of ever-increasing mobile broadband data usage, we not only take pride in the way we manage our network resources, but also take seriously our responsibility to deliver exceptional mobile service to every customer.  We’ve greatly valued the ongoing dialogue over the past several months concerning network optimization and we’ve decided not to move forward with the planned implementation of network optimization for 4G LTE customers on unlimited plans.  Exceptional network service will always be our priority and we remain committed to working closely with industry stakeholders to manage broadband issues so that American consumers get the world-class mobile service they expect and value.

The new policy first came to light when Verizon started shipping notices to its unlimited plan customers in July. The carrier tried to play down its significance by saying it wasn’t a true throttling program because it didn’t automatically restrict speeds to 2G or 3G rates when customers hit a pre-defined data limit each month.

Instead, [company]Verizon[/company] said that the restrictions would only go into effect when the network was congested. If there were unlimited and metered data customers competing for the same bandwidth then Verizon would prioritize the traffic of everyone else over the traffic of its heaviest unlimited customers.

To fall under the guidelines, you would have had to have been an unlimited plan customer on contract in the top 5 percent of Verizon’s data users. Even those who fell under the restrictions would be affected rarely, and in many cases they wouldn’t even notice it happening, Verizon claimed.

Verizon’s unlimited customers weren’t happy about the change and neither was the Federal Communications Commission. Already mired in heated net neutrality debate, FCC Chairman Tom Wheeler penned an angry letter to Verizon questioning the new proposal’s motives.

“‘Reasonable network management’ concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams,” Wheeler said in the letter. “It is disturbing to me that Verizon Wireless would base its ‘network management’ on distinctions among its customers’ data plans, rather than on network architecture or technology.”

Apparently the customer and regulatory blowback was greater than Verizon anticipated so it decided to can the idea. That said, Verizon is still restricting speeds for its heaviest unlimited users on 3G — it’s been doing so for years — but for now those customers will have free reign on Big Red’s LTE network.

 This post was updated at 2 PM PT with more background information