07/30/2014 07:14 pm ET Updated Jul 31, 2014

FCC Chair Asks Verizon To Explain 'Disturbing' Plan to Slow Wireless Speeds

The chairman of the Federal Communications Commission on Wednesday called Verizon's new plan to reduce speeds for certain data-guzzling wireless customers “deeply troubling" and asked the company to justify the policy.

Verizon said last week it would begin slowing speeds for wireless customers with unlimited data plans who stream large amounts of high-definition video on their phones. The company said the policy would start in October and would only apply to customers who are in the top 5 percent of data users and are connected to cell towers with high demand.

The company said the policy was for “network management” and told customers they could switch from an unlimited plan to a usage-based plan, which would not be affected. Usage-based plans, however, are subject to data caps and financial penalties for customers who exceed them. Such plans have become a lucrative part of many wireless carriers' business models.

In a letter Wednesday to Verizon Wireless, FCC Chairman Tom Wheeler said he found the company's new policy “disturbing” and suggested it may be a “loophole designed to enhance your revenue streams.”

Wheeler asked the company to explain how the new policy does not violate rules the company agreed to follow when it was given permission to use the wireless spectrum to offer 4G wireless service. Under those rules, Verizon is barred from interfering with customers' wireless experience, except for "reasonable network management" like maintaining security and reducing congestion. Verizon could be fined up to $1.5 million if it is found to be violating FCC rules, according to an agency spokeswoman.

“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,” Wheeler wrote.

“I know of no past Commission statement that would treat as ‘reasonable network management’ a decision to slow traffic to a user who has paid, after all, for 'unlimited' service,” he added.

The rules Wheeler cited are unrelated to the debate over net neutrality, the idea that Internet providers treat all Web content the same.

Verizon wireless spokesman Thomas Pica declined to comment on Wheeler’s letter, saying the company had not yet reviewed it.

“However, what we announced last week was a highly targeted and very limited network optimization effort, only targeting cell cites experiencing high demand," Pica said in an email. "The purpose is to ensure there is capacity for everyone in those limited circumstances, and that high users don't limit capacity for others."