T-Mobile (NYSE:TMUS) is asking the FCC to issue new guidance and enforcement criteria on data roaming agreements. T-Mobile's request appears to be an attempt by the carrier to obtain a more favorable roaming agreement with rival AT&T Mobility (NYSE: T).
Specifically, T-Mobile is asking the FCC to issue "benchmarks" on the cost of roaming rates. The carrier is also asking the commission to clarify that current roaming rates aren't necessarily indicative of "commercially reasonable" roaming rates, and to clarify rules related to locations where carriers do not yet operate networks but are requesting roaming.
"The limited intervention and guidance sought by T-Mobile will provide necessary clarity for individualized negotiations and help all parties better evaluate the commercial reasonableness of offered terms," T-Mobile wrote in its FCC filing. "T-Mobile reiterated that it is not seeking the regulation of rates. Instead, its Petition requests guidance to facilitate negotiation of commercial agreements and dispute resolution, a ruling which is well within the Commission's current authority."
The FCC in 2011 voted to approve automatic data roaming rules, effectively settling a dispute that had split the wireless industry between larger operators that were against the rules and smaller carriers seeking to put data roaming on par with voice roaming. The FCC's rules, called the Data Roaming Order, require mobile broadband providers to provide data roaming on "commercially reasonable" terms and conditions.
In a lengthy filing on the topic, T-Mobile called out AT&T specifically as a carrier that is not providing fair and reasonable roaming rates.
"T-Mobile has been forced to throttle and cap its customers' ability to roam on AT&T's data network due to AT&T's unreasonably high data roaming rates," T-Mobile wrote in its filing. "This is precisely the type of impact on consumers that the 'commercially reasonable' standard should be interpreted to prevent. Data roaming traffic carried by the substantial majority of roaming partners other than AT&T is generally offered at rates that do not require throttling or capping."
"In my view, AT&T uses its significant pricing power to keep roaming prices for T-Mobile at commercially unreasonable levels--which is why additional Commission guidance is urgently needed to ensure achievement of commercially reasonable rates and terms," wrote Dirk Mosa, T-Mobile's SVP of corporate development and roaming, in the carrier's FCC filing. Mosa said that T-Mobile has managed to obtain better roaming agreements with other U.S. carriers and with international carriers.
An AT&T spokesman said that the carrier couldn't immediately respond to T-Mobile's most recent filing and would need more time to review the filing. AT&T in the past has argued that it does provide reasonable rates for roaming.
Interestingly, T-Mobile's Mosa wrote that "certain" of T-Mobile's "most critical roaming agreements" are set to sunset at the end of this year, "which is one reason why expeditious Commission action is needed." It's unclear exactly what roaming agreements Mosa is referring to--wireless operators typically do not disclose details about specific roaming agreements--but AT&T is T-Mobile's most important data roaming partner in the United States.
However, as part of the breakup fee following the collapse of AT&T's attempt to acquire T-Mobile in 2011, AT&T agreed to give T-Mobile a seven-year UMTS roaming agreement. The agreement allowed T-Mobile to expand its coverage to 280 million POPs from 230 million.
It's unclear whether the FCC will respond to T-Mobile's most recent filing on the data roaming issue. However, the commission, under its new chairman Tom Wheeler, has made it clear that it is willing to issue rules that are geared toward limiting the market's largest wireless network operators. For example, the agency issued rules for next year's 600 MHz auction that essentially prevent AT&T and Verizon Wireless (NYSE: VZ) from bidding on up to 30 MHz of spectrum, thus reserving it for smaller carriers like T-Mobile and Sprint (NYSE: S).
For more:
- see these two T-Mobile FCC filings
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