FCC Will Consider Rates In Commercially Reasonable Roaming

Grants T-Mobile Request for Declaratory Ruling Clarifying Standard
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The FCC's Wireless Bureau has issued a declaratory ruling responding to a request by T-Mobile to clarify exactly what it meant by the commercially reasonable standard for evaluating data roaming agreements. T-Mobile asked that the FCC consider a variety of comparables when considering whether a deal was commercially reasonable and the bureau agreed that is what the FCC meant.

T-Mobile asked that the commission consider as at least potentially relevant "whether proffered data roaming rates are substantially in excess of retail rates, international rates, and mobile virtual network operator (MVNO)/resale rates, as well as how proffered data roaming rates compare to domestic data roaming rates charged by other providers." 

The FCC said those rates "can" be considered under its "totality of the circumstances" approach.

The FCC requires facilities-based providers to offer roaming deals to competitive carriers on commercially reasonable terms and conditions, one of many FCC actions to try and spur mobile broadband. Verizon challenged the requirement, saying the FCC lacked the authority to issue that mandate. The court did not agree.

Data roaming deals are agreements that allow customers of one provider to use another's network when they are in an area their provider does not reach.

The FCC concluded in creating that "commercially reasonable" determination that consolidation in the wireless industry may have decreased the incentive for the largest carriers, like AT&T and Verizon, to enter into roaming agreements.

Facilities based providers AT&T and Verizon, were not pleased.

AT&T, for one, said it would appeal the decision to the full commission (commission Republicans have argued that they should have gotten to weigh in on the decision the first time around.) Verizon suggested the decision could be illegal.

"We disagree strongly with this action and with the irregular process by which it was decided," said AT&T SVP, federal regulatory, Bob Quinn. "We will of course appeal this to the full commission, and further if necessary."

“The U.S. wireless market is the envy of the world and one of the country’s leading sources of economic growth," said Kathleen Grillo, SVP, federal regulatory affairs. "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.”

Not surprisingly, the competitive carriers who will get more rate benchmarks in the review of their deals, were celebrating.

“Small, wireless providers serving rural consumers have struggled for years in negotiating roaming agreements with the larger providers," said Shirley Bloomfield, CEO of NTCA-The Rural Broadband Association. "The declaratory ruling issued by the Wireless Telecommunications Bureau today is an important step toward ensuring that roaming agreements are commercially reasonable and that small providers have better ability to continue to compete and offer valuable alternatives to consumers in the wireless marketplace.” 

Chip Pickering, CEO of COMPTEL, which represents competitive carriers, said his members continued to face "challenges" in negotiating roaming deals with AT&T and Verizon and that greater clarity was needed. 

“We commend the FCC for its actions today in granting T-Mobile’s petition," he said. "We believe the adoption of the benchmarks T-Mobile proposed may relieve some of the difficulties smaller carriers have been experiencing in their negotiations," but not all. "[W]e also encourage the Commission to remain vigilant in addressing the ability to obtain reasonable data rates, particularly in areas where alternative roaming partners do not exist."