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Verizon is reportedly working on a sneaky plan to undermine net neutrality using data caps

Verizon Video Service Net Neutrality

The Federal Communications Commission’s new net neutrality rules ensure that Verizon won’t be able to intentionally slow down competitors’ video streaming services in the name of speeding up its own offerings. However, Verizon has shown itself to be nothing if not creative over the years and a new report from Investor’s Business Daily claims that the carrier is working on a sneaky plan to undermine net neutrality that may not even run afoul of the FCC’s regulations.

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How would Verizon accomplish this? As IBD tells it, Verizon is planning to offer its own standalone streaming service that would be like a relaunch of its infamously disastrous Redbox Instant service that it shut down last fall. The difference, the report claims, is now Verizon wants “to set itself apart by focusing its service on wireless phone users,” whereas Netflix, Hulu, Sling TV and HBO Now will be primarily used by people on their wireline Internet connections.

So what’s the problem? Well, any Verizon customers know that the carrier just loves to slap users with fat fines if they go over their monthly data allotments. Video, by its nature, is a very data-intensive application. Thus, Verizon users who watch Verizon’s new TV service over its wireless network are likely to run over their data cap limits very quickly.

Unless… Verizon decides to exempt its own service from its own data caps.

“When it launches a mobile video service, Verizon could skirt the data cap issue by exempting some or all of customer OTT usage from data caps,” writes IBD. “But it’s unclear if that tactic would run afoul of net neutrality rules.”

This is very sneaky because Verizon wouldn’t be treating rival services’ data packets any differently when they run over its network. It’s more that you’d only have a limited number of those packets you could consume before you’d get hit with overage fees, whereas you could consume Verizon’s own packets as much as you wanted without fear of running over your cap.

This would definitely be giving Verizon’s service a major competitive advantage over others but the carrier wouldn’t technically be discriminating against rivals’ packets at the network management level, which is what the FCC’s net neutrality rules govern.

IBD quotes industry analyst Craig Moffett as saying the FCC would not “be pleased” with such a “provocative” move. And with good reason: Even if Verizon’s plan doesn’t technically run afoul of the FCC’s new regulations, it absolutely would violate the spirit of the rules.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.