AT&T accuses T-Mobile of relying on roaming instead of building its own network

The war of words between T-Mobile US (NYSE:TMUS) and AT&T Mobility (NYSE: T) over roaming rules continues, with AT&T accusing T-Mobile of relying on roaming to provide service instead of investing in its own wireless network.

In a new blog post, AT&T's VP of Federal Regulatory Affairs Joan Marsh wrote that T-Mobile is trying to get the FCC to lower wireless data roaming rates so that it can provide coverage to its users through roaming. However, she noted that T-Mobile currently owns spectrum that it has not deployed, indicating it is attempting to rely on roaming agreements to provide coverage instead of building its own network.

"A recent survey of FCC files indicates that T-Mobile has spectrum throughout the continental U.S. Yet, as shown by the coverage viewer on T-Mobile's website, T-Mobile has failed to build out its network in extensive areas throughout the Midwest, Mountain, and certain Eastern portions of the U.S.," Marsh wrote. "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.  In contrast, AT&T has built out its network in many of those same areas, and, notably, it did so with the same higher frequency spectrum T-Mobile holds.  There is no reason T-Mobile could not do the same."

To be clear though, both carriers continue to build out their respective LTE networks. AT&T covers roughly 300 million people with its LTE network, and T-Mobile recently said it plans to cover 300 million people with LTE by the end of next year.

Marsh also noted that AT&T has "successfully negotiated" more than 30 data roaming agreements since the release of the FCC's initial data roaming order in 2011, eight of which are LTE roaming agreements. She didn't provide details on those agreements.

Marsh also said that the roaming rate that T-Mobile is paying to AT&T for roaming has declined more than 70 percent during the past three years. "In fact, the rate T-Mobile pays AT&T is lower than the average rate paid by AT&T:  AT&T currently pays an average roaming rate that is higher than the 30 cents T-Mobile reports that it paid to other providers in 2013 (and significantly higher than the 18 cents T-Mobile projects it will pay in 2014)," Marsh wrote.

T-Mobile last spring launched a campaign to get the FCC to issue new guidance and enforcement criteria on data roaming agreements. The campaign is an attempt to get the agency to revisit its 2011 data roaming order that required wireless carriers to provide data roaming on "commercially reasonable" terms. 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.

T-Mobile has argued that, despite the FCC's 2011 data roaming order, it cannot obtain commercially reasonable roaming rates from AT&T. "Because of AT&T's artificially high roaming rates, T-Mobile wireless customers roaming in South Africa have a better user experience than customers roaming on AT&T's network in South Dakota," T-Mobile wrote in a recent FCC filing. "Their speed is twice as fast, and their data usage is unlimited. The record in this proceeding shows that other carriers are forced to throttle and cap data usage as well when their customers roam on AT&T's network."

Sprint (NYSE: S) and a number of smallr operators have joined T-Mobile and are hoping the FCC will lower the cost of data roaming. Verizon Wireless (NYSE: VZ) has sided with AT&T, arguing the FCC should give wireless carriers the flexibility to set their own roaming rates.

The FCC, for its part, has indicated it will use its powers to aid smaller carriers in the marketplace. For example, the commission earlier this year issued rules for the upcoming 600 MHz incentive auction that essentially carve out a block of spectrum that only small wireless carriers can bid on.

For more:
- see this AT&T blog post

Related Articles:
Sprint takes T-Mobile's side in data roaming dispute with AT&T, Verizon
AT&T: T-Mobile's petition would 'eviscerate' FCC's data roaming rules
T-Mobile asks FCC for help in its data roaming beef with AT&T
Sprint signs LTE roaming deals with C Spire, SouthernLINC and several rural operators
T-Mobile gets 7-year roaming deal, AWS spectrum as part of AT&T/T-Mobile breakup fee

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