AT&T: T-Mobile's petition would 'eviscerate' FCC's data roaming rules

AT&T Mobility (NYSE: T) fired back at T-Mobile (NYSE:TMUS) in the companies' ongoing debate over the FCC's data roaming rules. AT&T argues that T-Mobile's recent data roaming petition "would effectively eviscerate that FCC decision and run afoul of the D.C. Circuit case which upheld it," in the words of one AT&T executive.

In a filing made in May, T-Mobile said that the data roaming marketplace is "dysfunctional," and has left carriers "stymied in their efforts to negotiate data roaming agreements on commercially reasonable terms." To improve the situation, T-Mobile is asking the FCC to issue "benchmarks" on the cost of roaming rates. The carrier is also asking the commission to clarify rules related to locations where carriers do not yet operate networks but are requesting roaming. T-Mobile has said that such rules "will provide necessary clarity for individualized negotiations and help all parties better evaluate the commercial reasonableness of offered terms."

AT&T wrote in an FCC filing this week that T-Mobile's "petition shows the opposite: as T-Mobile recognizes, providers have negotiated dozens of commercial agreements under the new rules, yet T-Mobile has not cited a single instance where any provider anywhere in the country has found it necessary to file a complaint with the Commission alleging an inability to obtain commercially reasonable terms, much less demonstrated that the complaint process would be inadequate to address any such claim."

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 company blog post today, Joan Marsh, AT&T's vice president of federal regulatory, wrote that when the FCC crafted its data roaming rules it did so as part of an effort "to balance two important goals: ensuring that mobile wireless providers can obtain data roaming arrangements on reasonable terms while preserving incentives to invest in broadband networks. T-Mobile's proposals would undo that careful balance, resulting in prescriptive rate 'benchmarks' and other policies designed to allow T-Mobile to continue to rely on data roaming in lieu of investing in and extending its own broadband networks."

Marsh argues that T-Mobile's petition "would move well beyond clarifications in an attempt to unlawfully rewrite the Commission's data roaming rules in ways that would limit marketplace flexibility, undermine incentives to invest in broadband networks, and constitute prohibited common carriage regulation. For these reasons, T-Mobile's petition should be rejected."

AT&T also took aim at T-Mobile's network deployment strategy, arguing T-Mobile hopes to use data roaming as a way to avoid investment. Marsh also added that "remarkably, T-Mobile does little to hide its aversion to investment. The petition openly asserts that the Commission's commercial reasonableness standard should not take a large provider's capacity to build into account. The Commission is apparently supposed to ignore the fact that T-Mobile holds spectrum in almost all the areas in which its customers currently roam on AT&T's network. Yet the Commission has repeatedly made clear that its rules should not be interpreted in ways that would encourage providers to use data roaming as a substitute for economically feasible network builds."

The Competitive Carriers Association and C Spire Wireless this week made filings with the FCC that agree with T-Mobile's position. "Since the FCC's Data Roaming Order passed in 2011, competitive carriers continue to face significant challenges reaching roaming agreements with the largest carriers," CCA President Steve Berry said in a statement. "Data roaming plays a significant role in strategic business decisions for competitive carriers, and clarification by the FCC on what is considered reasonable is absolutely essential for carriers' current and future business plans."

In other filings with the FCC, a range of rural carriers--including Blooston Rural Carriers, PinPoint in Nebraska, NTCH, Flat Wireless, and Buffalo-Lake Erie Wireless Systems--voiced their support for T-Mobile's petition. "After several months of roaming on AT&T under the new rates, Limitless made the unilateral decision to severely 'restrict' its customers from accessing the AT&T network for the sole reason that AT&T's data roaming rates are too high and by continuing roaming access, Limitless could not maintain a commercially competitive retail wireless data offering to the general public," wrote Central Pennsylvanian carrier Limitless Mobile in its support of T-Mobile's petition.

Sprint too voiced its support for T-Mobile's petition, but Verizon Wireless sided with AT&T in arguing against it. "Since April 2011, when the Data Roaming Order was adopted, Verizon has either negotiated new agreements or negotiated rate changes in existing agreements with 48 of its 59 active roaming partners," Verizon wrote. "In each of these cases, when Verizon's data roaming charges have changed, they have declined. Indeed, over that time period Verizon's average data roaming charges (measured in revenue per roaming MB used) have declined by more than 40 percent. These facts contradict T-Mobile's assertion that Verizon is able to dominate the market and has no incentive to negotiate reasonable roaming agreements."

For more:
- see this AT&T FCC filing
- see this AT&T blog post
- see this CCA release
- see this C Spire FCC filing 

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