FCC slaps Verizon with $1.25 million fine for blocking 'tethering' apps

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In 2008, when Verizon bought the licenses to the wireless frequencies that it now uses for its 4G service, the FCC imposed rules barring the company from restricting its customers' ability to use the devices or apps of their choosing.

The rules only apply to Verizon and not other wireless carriers.

"Today’s action demonstrates that compliance with FCC obligations is not optional," FCC Chairman Julius Genachowski said in a statement. "The steps taken today will not only protect consumer choice, but defend certainty for innovators to continue to deliver new services and apps without fear of being blocked.”

As part of the settlement with the FCC, Verizon agreed to allow its customers to use tethering applications without paying an extra fee.

A Verizon spokesman said the company makes "clear to our customers that when using our services, they can go where they want and do what they want on the Internet, using the lawful applications and devices of their choice."

"This consent decree puts behind us concerns related to an employee’s communication with an app store operator about tethering applications, and allows us to focus on serving our customers," the spokesman said.

Advocacy group Free Press first filed a complaint with the FCC about Verizon asking Google to block the tethering apps.

Free Press Policy Director Matt Wood praised the FCC for sending a "strong signal to the market that companies cannot ignore their pro-consumer obligations."

But Wood said all other wireless carriers should be under the same requirements as Verizon.

The FCC passed net-neutrality rules in 2010 that bar Internet providers from blocking access to legitimate websites, but the rules apply only mild restrictions on wireless Internet providers.

Verizon is currently suing the FCC in federal court to overturn the net-neutrality rules.