Verizon Wireless isn’t entirely rolling out the welcome mat for new iPhone customers.  PreventCAPS, one of our regular readers, dropped us a note indicating Verizon quietly added something new to the terms and conditions for new customers as of Feb. 3rd, which just so happens to coincide with the date the company started taking orders for the Apple iPhone — it reserves the right to throttle your speeds and “optimize” your browsing experience with caching and network management techniques that could reduce the quality of online videos and other bandwidth-intensive graphics.

Important Information about Verizon Wireless Data Plans and Features

As part of our continuing efforts to provide the best experience to our more than 94 million customers, Verizon Wireless is introducing two new network management practices.

We are implementing optimization and transcoding technologies in our network to transmit data files in a more efficient manner to allow available network capacity to benefit the greatest number of users. These techniques include caching less data, using less capacity, and sizing the video more appropriately for the device. The optimization process is agnostic to the content itself and to the website that provides it. While we invest much effort to avoid changing text, image, and video files in the compression process and while any change to the file is likely to be indiscernible, the optimization process may minimally impact the appearance of the file as displayed on your device. For a further, more detailed explanation of these techniques, please visit www.verizonwireless.com/vzwoptimization

If you subscribe to a Data Plan or Feature on February 3, 2011 or after, the following applies:

Verizon Wireless strives to provide customers the best experience when using our network, a shared resource among tens of millions of customers. To help achieve this, if you use an extraordinary amount of data and fall within the top 5% of Verizon Wireless data users we may reduce your data throughput speeds periodically for the remainder of your then current and immediately following billing cycle to ensure high quality network performance for other users at locations and times of peak demand. Our proactive management of the Verizon Wireless network is designed to ensure that the remaining 95% of data customers aren’t negatively affected by the inordinate data consumption of just a few users.

These kinds of “network management” techniques, which include speed throttles, reduced quality graphics, and caching (which can result in stale web pages being served to your mobile device), are all made possible by the Federal Communications Commission’s failure to implement Net Neutrality protections for wireless providers.  While Verizon stresses it will treat all content to the same network management techniques equally, the “improved” broadband experience Verizon claims to offer is more likely to improve the company’s bottom line from reduced spending on network upgrades.

Like most providers, Verizon isn’t willing to be specific about what amount of usage is likely to trigger the throttle, why it needs to be maintained for the remainder of the billing cycle even when network congestion is not a problem, and what speed customers will be stuck with for the rest of the month.

Broadband Reports reached out to Verizon for specifics and discovered the provider has not actually implemented these measures… yet:

“The notice yesterday simply reserves the right for new customers or renewing their contracts,” Verizon spokesman Jeffrey Nelson tells Broadband Reports. “We’re reserving the right to actively manage the network in specific ways should that need exist – and only for customers who are under contract that includes that provision,” he says. “Because this is down the road – if at all – it’s too early to tell what those triggers might be, or what throughput limitations would look like.”

Verizon may be concerned about the potential impact millions of data-craving iPhone customers will bring to its network in the coming weeks.  Existing customers with Android devices or Blackberry handsets are safe for now — the provision only impacts customers who sign new contracts as of last Thursday.

Verizon says it will retain its unlimited data option (with the right to throttle service) for a “limited time only.”

The date has arrived.  Existing Verizon Wireless customers are now invited to “pre-order” The Precious.

Strangely, Verizon’s website gave more prominence to the phone before they could actually accept orders for it:

Verizon Website 2/2/2011

Verizon Website 2/3/2011

Verizon wants you to think of its Apple iPhone as a fine wine, offering “exclusive” access to “our reserved quantity, while they last.”

When they’re gone, they’re… will be more on the way.  The Keebler Elves at Apple will certainly make more, plenty more, to sustain pent up demand for the phone on Verizon’s network.

AT&T is doing all it can to keep customers from switching.  In addition to earlier efforts to lock customers into those two-year contracts with early termination fees, lots of AT&T customers are also getting e-mail from the company reminding them AT&T is the only network that lets you talk and surf the web at the same time (with your iPhone).  They ignore T-Mobile, which also accepts unlocked iPhones and works the same way.  AT&T and T-Mobile utilize GSM technology while Verizon (and Sprint… and Cricket… and MetroPCS) use CDMA.  The latter technology, at least in its current implementation, allows users do one or the other, not both.

That probably won’t keep too many disenchanted AT&T customers from leaving, but some other factors might:

1. Apple will release the iPhone 5 in less than six months, if things run according to schedule.  The new phone might work on Verizon’s new LTE network, something iPhone 4 does not.  Is there a hurry to upgrade now when something better is around the corner?
2. AT&T Retention Agents are giving away the store to customers warning of their intention to depart.  Restoration of unlimited data plans, free upgraded phones to qualified customers, free accessories, and even credit for a month of service have all been offered, even as the company publicly announces it is pulling back from some of those giveaways and specials.
3. As potentially millions of AT&T customers leave, those remaining may find improved performance from the lighter load on AT&T’s network.  Plus, the impact of the iPhone on Verizon’s 3G network remains unknown.  AT&T customers could parade themselves into new headaches on Verizon’s network.

Verizon will allow new iPhone customers access to its “unlimited data” add-on plan “for a limited time.”  Verizon plans to join AT&T in officially ending the unlimited option sometime this year, but exact pricing and plan details remain unavailable.

Customers can begin booking their departure from AT&T Feb. 9, when Verizon begins taking orders from new customers and those intending to drop their current carrier.

Time Warner Cable customers in the Albany, N.Y. area are complaining about the cable company’s latest rate increase which will cost most bundled customers at least $7 a month more in 2011.

Time Warner blamed the rate increases on investment and upgrades to their facilities and increased programming costs.

The company’s heavily marketed $99 promotion is also coming under fire in the area, because many customers don’t qualify for it.

The Albany Times-Union reports many area residents were invited to call the company “to see how they could lower their bill.”  Time Warner has marketed a one year promotional offer providing the company’s triple-play bundle of phone, Internet and cable-TV service for around $33 for each service, or $99 a month.  But when customers called the company, they were told they don’t qualify for the promotion.

Michael Malachowski, a Delmar resident, learned the hard way that winning a promotional offer from the cable company wasn’t going to be as easy as he thought.

Malachowski currently has a bundle of services with the company and spends around $140 a month.  But he learned he can’t qualify for Time Warner’s $99 offer  — it is available only to new customers or those with a single service.

Other area customers shared similar stories with the newspaper.

One way around the roadblock is to threaten to cancel.

Albany customers are getting some additional powers to negotiate with the imminent arrival of Verizon FiOS TV, coming to Bethlehem, Scotia, and Colonie.  A similar bundle of services from Verizon is a lot cheaper than Time Warner’s $140 a month.  The fiber to the home network offers an online promotion for all three services for $84.99 a month for at least the first year.

Even if FiOS is not an option, Time Warner bends the rules when customers are on the verge of cutting their cord.

If you use Verizon’s forthcoming iPhone as a Wi-Fi hotspot, be prepared to pay $20 a month for a maximum of 2GB of usage per month.

Many smartphones have built-in capabilities to serve as temporary hotspots to let you use your Wi-Fi capable equipment on Verizon’s wireless 3G network.  But that doesn’t mean Verizon will let you use it for free.

The so-called “personal hotspot” enables up to five Wi-Fi equipped devices to share your connection, but not too much.  If you exceed your 2GB plan allowance, the overlimit fee is a striking $20 per gigabyte.  Those fees come in addition to your usual Verizon voice and data plan charges.

Verizon is not singling out the iPhone for the expensive data plan.  The pricing is equivalent to what Verizon charges for a similar service on its other smartphones, according to Brenda Raney, Verizon Wireless’ executive director of corporate communications.

Just shy of one month after adoption, the Federal Communication Commission’s Net Neutrality rules face a legal challenge by one of the parties that helped write them.

Verizon Communications filed suit Thursday in the same federal court that in April threw out much of the authority the FCC thought it had over online telecommunications.

“We are deeply concerned by the FCC’s assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself,” said Michael E. Glover, Verizon’s senior vice president and deputy general counsel. “We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers.”

Verizon’s lead attorney in the case in Helgi Walker, who will be a familiar face in the court — Walker successfully argued the original case Comcast brought against the Commission for trying to regulate its Internet service.

FCC Chairman Julius Genachowski's cowardly cave-in on strong Net Neutrality was rewarded with... a lawsuit from Verizon to overturn the regulations the company helped write.

But Verizon wants an even greater shot at success, asking for the same panel of judges who ruled in the Comcast case to also hear its challenge.

“Verizon has made a blatant attempt to locate its challenge in a favorable appeals court forum,” said Andrew Jay Schwartzman, senior vice president and policy director of the Media Access Project.

Outgunned.  Again.

The earlier decision in the Comcast case not only stripped the FCC’s authority to regulate broadband under a regulatory framework established under the Bush Administration, it derided the logic behind it.  During arguments, the FCC’s general counsel acknowledged he was likely to lose the case, and actually asked the Court for guidance on how to write better rules.

Remarkably, Verizon’s legal challenge comes after the company worked closely with the Commission to moderate Net Neutrality regulations.  The rules issued in December exempted wireless communications and were criticized by consumer groups for not truly representing a free and open Internet.

Rob Pegoraro, a Washington Post columnist, was incredulous the phone company was spending subscribers’ money fighting net policies that nearly mirrored the voluntary agreement it reached with Google last year.

“Okay, so you’re going to spend some of my money to fight a minimal set of regulations written to stop you from tampering with my Internet access? How is that supposed to make me feel comfortable doing business with you?

“(Note to Verizon: You are not only an enormous telecom conglomerate, you are The Phone Company. You don’t get to say “trust me.”)

“Then I got more annoyed.

“The regulations that Verizon regards as an affront to the Constitution match up closely with the proposal that Verizon published with Google in August–a suggested regulatory framework that many people, myself included, criticized for its minimal restrictions on wireless broadband services.

[…] “And not only did Verizon think that its proposed set of rules would be good for business last summer, it did so as recently as 2:25 p.m. Thursday, when a post on its public-policy blog favorably cited those suggestions.”

Nate Anderson at Ars Technica isn’t sure why Verizon is spending time fighting rules it supposedly agrees with either, and he produced a chart proving it:

Excerpted below are the main Verizon/Google provisions, followed by their matching item in the FCC’s “open Internet” order from December. All are exact quotes.

Despite the perceived rush to court, legal challenges against the FCC’s Net Neutrality rules were widely expected.  The FCC continues to tell the press (on background), it believes it has the authority to enact Internet-related regulations and policies.  But many court watchers familiar with the District of Columbia Court of Appeals think it is more likely than not Verizon will prevail on similar legal arguments Comcast used to win its case.

What then?

Pegoraro: “I’d like to think that it would be fitting if the FCC responded by returning to the regulatory strategy it should have adopted in the first place: putting broadband Internet services back under a simplified form of the “Title II” common-carrier regulation that most operated under until 2005.”

“But if the FCC couldn’t find the gumption to choose that more aggressive but more legally grounded option before, why would it now?”