Thanks to a Federal Communications Commission decision, T-Mobile USA and others may be in a better position to negotiate data roaming agreements with AT&T and Verizon Wireless.
In evaluating disputes over such agreements, the FCC will consider how the offered data roaming rates compare to other rates, including U.S. data roaming rates charged by other providers. But the decision could be short-lived.
Bob Quinn, AT&T’s senior vice president – federal regulatory, said AT&T would appeal the decision to the full FCC, and if necessary, further.
“We disagree strongly with this action and with the irregular process by which it was decided,” Quinn said in a statement.
The declaratory ruling was released Thursday by the Wireless Telecommunications Bureau. That fact did not sit well with AT&T and Verizon as well as the two Republicans at the FCC, who said the item and a separate report on the state of wireless competition should have been voted on by the five-member Commission.
“FCC decisions issued on the bureau level cut the Commissioners out of the decision-making process entirely,” FCC commissioner Ajit Pai said in a statement. “This is not how democracy works. And it’s not how the FCC in particular has ever worked.”
Characterizing the market as “broken,” T-Mobile petitioned regulators several months ago for guidance and criteria in determining whether a data roaming agreement is “commercially reasonable” as required by the FCC. Sprint supported the petition while AT&T and Verizon Wireless opposed it.
“The FCC’s guidance should facilitate the negotiation of more reasonable data roaming agreements, giving consumers greater freedom to use their smartphones and seamlessly access the Internet wherever they travel,” Jeffrey Silva, a Sprint spokesman, said in a statement. “This is an important step to help create a level playing field, one that promotes greater competition in the wireless industry and gives consumers more choices.”
Verizon blasted the FCC’s decision on T-Mobile’s petition.
“It is deeply troubling that the Wireless Bureau has changed a fundamental wireless rule in ways that discourage investment and unfairly advantage one company over others, and has done so without a Commission vote, as required by law,” said Kathleen Grillo, senior vice president, federal regulatory affairs, in a statement.
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.
T-Mobile’s May 27, 2014, petition cited “ambiguities” in the commercially reasonable standard and insisted it is still difficult to negotiate data-roaming agreements.
Smaller carriers often rely on data roaming agreements to serve their subscribers. As of July 2014, Verizon Wireless and AT&T covered 96 percent and 91 percent of the population, respectively, while Sprint and T-Mobile covered 73 percent and 70 percent, respectively. But US Cellular, the largest of the local or regional carriers, only served roughly 7 percent of the population, according to the FCC.
“Consumers deserve affordable access to mobile broadband from their carrier of choice no matter whether they’re at home or on the road,” said T-Mobile US’ Andy Levin, senior vice president of government affairs. “We commend the FCC for taking this important step to promote competition by facilitating reasonable data roaming rates for all carriers and their customers.”
In evaluating data-roaming disputes, the FCC will now consider (among several other factors) whether the offered data roaming rates far exceed retail rates, international rates, and mobile virtual network operator rates. Another factor the FCC has agreed to consider: how the offered roaming rates compare to domestic rates that other providers are charging.
In the FCC’s 2011 data-roaming order, the Commission presumed that a signed agreement is reasonable and that a party challenging it must rebut such a presumption. T-Mobile sought a finding that such a presumption only applies to signed agreements, not future ones. The wireless bureau agreed, although it found the terms of a prior agreement might be relevant in determining the reasonable of a negotiation in a new pact.
“A rate negotiated a year ago might have been commercially reasonable at that time but may no longer reflect current marketplace conditions, which is why the Commission limited this presumption to existing agreements and not to future negotiations,” the wireless bureau said.