The FCC's decision to adopt automatic data roaming rules triggered predictable reactions from the industry players that had been arrayed for and against the rules: Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) argued that the rules are an unnecessary overreach, while much of the rest of the industry applauded the move.
"By forcing carriers that have invested in wireless infrastructure to make those networks available to competitors that avoid this investment, at a price ultimately determined by the FCC, today's order discourages network investment in less profitable areas," Tom Tauke, Verizon Communications' executive vice president of public affairs, policy and communications, said in a statement. "That is directly contrary to the interests of rural America and the development of facilities-based competition and potential job creation. Therefore, it is a defeat for both consumers and the innovation fostered by true competition."
Bob Quinn, AT&T's senior vice president of federal regulatory, said in a statement that the record showed "proponents of a roaming mandate were seeking government intervention, not to obtain agreements--which are plentiful--but rather to regulate rates downward."
Smaller carriers, including Sprint Nextel (NYSE:S), T-Mobile USA and Cricket provider Leap Wireless (NASDAQ:LEAP), have argued that excessive charges for data roaming inhibit competition. Both Sprint and Leap issued strong statements in support of the rules, though T-Mobile--which AT&T wants to acquire for $39 billion--was conspicuously absent from the flurry of praise that much of the industry heaped on the rules.
"The FCC's decision to require automatic data roaming guarantees that consumers and carriers will have a pathway to 3G and 4G services," Steve Berry, president of the Rural Cellular Association, said in a statement. "Consumers will benefit from a more competitive marketplace, and carriers will be encouraged to invest in advanced networks."
The rules, which the FCC approved on a party-line 3-2 vote, will require mobile broadband providers to provide data roaming on "commercially reasonable" terms and conditions.
"It represents a dramatic shifting of the burden in contractual negotiations that just gives wireless carriers that compete with AT&T and Verizon much, much more leverage than they had yesterday," Jeffrey Silva, an analyst with Medley Global Advisors, told FierceWireless.
However, there are important limitations on the rules. Carriers that are offering roaming may negotiate terms on an individualized basis, and may condition effectiveness of the roaming deals by making sure the carrier seeking to roam on its network offers service with a generation of technology comparable to the one they want to roam on. Additionally, operators can negotiate reasonable traffic management tools to ensure that their networks are not flooded with data traffic from roaming partners. Companies can seek resolution of disputes through filing complaints or seeking a declaratory FCC ruling on the disagreement.
Silva predicted that Verizon will mount a legal challenge to the rules--Verizon has already attempted a legal challenge against the FCC's net neutrality rules. Verizon did not immediately respond to a question on the topic. Silva also said AT&T likely won't rock the boat, as the carrier is currently seeking FCC approval of its proposed purchase of T-Mobile.
- see this Verizon statement
- see this AT&T statement
- see this Sprint statement
- see this Leap statement
- see this RCA statement
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