WASHINGTON (Reuters) - Verizon Wireless will pay $1.25 million to settle a regulatory probe into whether it blocked customer access to mobile broadband applications on Android phones, the U.S. Federal Communications Commission said on Tuesday.
The U.S. telecommunications regulator said the payment stemmed from a probe into whether Verizon Wireless, the biggest U.S. mobile service provider, had complied with rules governing spectrum used for high-speed wireless services.
Verizon Wireless purchased the so-called "C Block spectrum" in an auction, with the understanding that the airwaves were subject to rules that bar carriers from restricting devices or applications customers can use.
The FCC's Enforcement Bureau opened an investigation after reports surfaced that Verizon Wireless had Google Inc, the developer of Android mobile phone software, disable tethering applications, which allow for the use of a mobile phone as a modem to provide wireless Internet access for another device such as a tablet.
Verizon Wireless charges an extra monthly fee to customers using smartphones for tethering, but the apps allowed users to tether without paying the additional fee.
Public interest group Free Press filed a complaint in June 2011 charging that the carrier was violating its C Block conditions.
"Verizon Wireless has always allowed its customers to use the lawful applications of their choice on its networks, and it did not block its customers from using third-party tethering applications," Verizon said in a statement.
"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 statement said.
In addition to the $1.25 million fine, the consent decree forces Verizon Wireless to notify Google that it may again offer the tethering apps to Verizon customers.
The company will also provide employees with training on C Block compliance, have legal counsel review communications with app store operators before they are sent and report any instances of noncompliance to the FCC for the next two years.
Verizon Wireless customers with usage-based plans will also be able to tether using any app without being charged.
"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," FCC Chairman Julius Genachowski said.
Free Press applauded the agency for sending a strong signal that companies cannot ignore their pro-consumer obligations.
"We remain concerned that consumers of other carriers lack the same basic protections that Verizon's customers have under the law," Matt Wood, Free Press' policy director, said.
Reporting by Jasmin Melvin; Additional reporting by Sinead Carew in New York; Editing by Gary Hill and David Gregorio