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T-Mobile has characterized the market as “broken,” and petitioned regulators several months ago for guidance and criteria in determining whether a data roaming agreement is “commercially reasonable” as required by the Federal Communications Commission.
Citing a number of data roaming agreements, AT&T has insisted there is nothing wrong with the market and blamed T-Mobile for failing to avail itself of an alternative to paying high rates to ride on other networks: building out its own broadband infrastructure.
Although T-Mobile holds spectrum throughout the continental United States, the company “has failed to build out its network in extensive areas throughout the Midwest, Mountain, and certain Eastern portions of the U.S.,” wrote Joan Marsh, AT&T vice president of Federal Regulatory, in a blog Monday. “In these broad swaths of the country, T-Mobile holds PCS and AWS spectrum that it could use to provide broadband services. It instead has chosen to rely on roaming.”
Marsh said AT&T has used the same higher frequency spectrum held by T-Mobile to build out its network in many areas where T-Mobile hasn’t developed its infrastructure.
“There is no reason T-Mobile could not do the same,” she said.
T-Mobile, meanwhile, said its 4G network is anything but dinky. In a blog Monday, T-Mobile Chief Technology Officer Neville Ray said the company is on pace to cover 280 million people with its 4G LTE network by the middle of next year. The network presently covers 250 million people, he said.
But T-Mobile partly relies on data-roaming agreements to service its 4G LTE subscribers. In an Oct. 20 meeting with FCC officials, T-Mobile representatives said they need guidance as they negotiate data roaming agreements. T-Mobile said it is not asking the FCC to regulate rates.
“Many of these new agreements will include 4G/LTE data roaming for the first time, and additional guidance is essential for carriers to expedite the negotiation of commercially reasonable agreements,” declared T-Mobile’s Kathleen O’Brien Ham, VP, Federal Regulatory Affairs, in an FCC filing.
In 2011, the FCC adopted a rule that required facilities-based providers of wireless service to provide data roaming on commercially reasonable terms and conditions. Under then-FCC Chairman Julius Genachowski, the agency found the data roaming regulation was necessary because wireless carriers encountered difficulties obtaining roaming arrangements from the national wireless providers on 3G networks.
AT&T and Verizon opposed the data roaming regulation before it was adopted, arguing that wireless carriers could obtain nationwide coverage without regulatory intervention. Verizon later challenged the regulation in court and lost.
The FCC imposed certain limitations on the roaming regulation – for instance, a wireless carrier is not required to enter an agreement if its network is incompatible with a requesting provider – and said it would determine whether a data roaming arrangement is “commercially reasonable on a case-by-case basis, taking into consideration the totality of the circumstances.”
Three years after the regulation was adopted, T-Mobile has characterized the data roaming market as “broken.”
“Must-have roaming partners are able to raise their rivals’ costs in a way that artificially inflates prices and unnecessarily degrades their customers’ experience,” Ham said.
But Marsh attempted to undermine T-Mobile’s position. She said T-Mobile’s own petition reflects that its data roaming rates are 70 percent lower than three years ago. She also noted that AT&T has negotiated more than 30 data roaming agreements since the FCC released its order, and eight of the pacts are LTE roaming agreements.
In its May 27, 2014, petition seeking guidance from the FCC, T-Mobile cited “ambiguities” in the commercially reasonable standard. The company insisted it is still difficult to negotiate data-roaming agreements.
On T-Mobile’s behalf, Joseph Farrell, a former FCC chief economist, proposed that the FCC assess four factors in examining whether an agreement is commercially reasonable, including “whether a wholesale roaming rate offered to a retail competitor substantially exceeds the relevant retail rate.”
Sprint is in favor of the T-Mobile petition. In an Oct. 23 meeting with FCC officials, Sprint representatives said clarification from the agency “will help remove roadblocks to commercially reasonable data roaming arrangements across the industry, particularly with AT&T and Verizon,” according to an FCC filing on Monday.
“Sprint explained that carriers, such as AT&T and Verizon, operating the only compatible network in many areas, hold a superior bargaining position, which gives them the incentive and ability to demand anti-competitive rates and terms,” said Charles McKee, VP-Government, Affairs, Federal & State Regulatory, in the FCC filing.
In a meeting earlier this month with an official from the office of FCC Commissioner Mignon Clyburn, Verizon branded T-Mobile’s petition as an accusation that AT&T refuses to offer roaming on commercially reasonable terms. Verizon has argued the petition is not the proper forum for T-Mobile to assert its grievance against AT&T and that an FCC examination of roaming rates is unnecessary.
“Because a complaint proceeding enables a party to discover and produce evidence of roaming rates in its own and other parties’ agreements, there is no need to examine retail or resale rates,” wrote Verizon’s Tamara Preiss, vice president, Federal Regulatory Affairs, in an Oct. 9 FCC filing. “Moreover, given that the FCC already rejected those rates as benchmarks for commercial reasonableness, T-Mobile’s petition is an attempt to change the Commission’s existing rules and thus cannot be addressed through a declaratory ruling.”