Verizon Wireless has agreed to pay a fine and reimburse users who were disconnected for "excessive" use of a cellular broadband service that was marketed as allowing "unlimited" use, New York's state attorney general announced Tuesday. A nine-month investigation found that Verizon disconnected 13,000 subscribers for exceeding an undisclosed monthly usage cap.
Under the settlement, Verizon will reimburse the terminated subscribers for the cost of the laptop cards or laptop-connected cellphones they bought to use the service. The company put the cost at around $1 million. It will also pay $150,000 in penalties and costs to the state.
The prosecutor's office said the company voluntarily stopped disconnecting customers based on their data usage in April.
Verizon's user agreement for the BroadbandAccess plan prohibits continuous streaming of audio or video and peer-to-peer file sharing, all of which generate heavy traffic. It also reserves the right to disconnect or slow down traffic for anyone using too much data, but since this spring, the cap has been explicit rather than undisclosed: 5 gigabytes of data per month.
The agreement says the plan is only to be used for Web surfing, e-mail and corporate intranet access, activities that are unlikely to generate 5 gigabytes of traffic in a month.
"We are pleased to have cooperated with the New York Attorney General and to have voluntarily reached this agreement," said Howard Waterman, a spokesman for Verizon Wireless. "When this was brought to our attention, we understood that advertising for our NationalAccess and BroadbandAccess services could provide more clarity." (info from The Associated Press)