Court Decision Upholding FCC Data Roaming Order Is Boon to Small Carriers

NEWS ANALYSIS: A U.S. Appeals court finds that the Federal Communications Commission had the legal authority to require data roaming by customers of other competing mobile carriers.

In fact, the FCC went to a great deal of trouble to make the data-roaming order as balanced as possible. According to a senior FCC official who spoke to eWEEK on background, the order allows carriers to decline roaming agreements where it's not technically feasible or where the roaming requestor doesn't have the same level of technology (so a company without Long Term Evolution, or LTE, technology can't depend on Verizon Wireless for its 4G service for example).

The FCC official also said that the order allows wireless companies to enter into individualized agreements, meaning that they don't have to offer the same terms to every other carrier. The only requirement is that they be commercially reasonable.

Significantly, there are indications that this appeal of the FCC's decision is almost a trial balloon for Verizon's appeal of the FCC's net neutrality ruling, which has yet to be heard. The FCC official told eWEEK that the appeal was teed up very expressly in a way that foreshadowed the issues in the net neutrality case.

Verizon has also appealed the FCC's requirement for net neutrality on grounds very similar to the appeal that was just thrown out by the circuit court. In its appeal, Verizon said that the FCC couldn't require that it handle Internet traffic freely and without restrictions or extra charges.

Verizon also argued that the requirement that they provided roaming services was in effect an unconstitutional taking of Verizon's property. The FCC official noted that Verizon has no expectation that the FCC isn't going to place requirements such as the roaming requirement on their licenses and noted that the license itself specifically says that the FCC can modify the conditions, if necessary.

The court also noted in its findings that Verizon was being somewhat disingenuous in its claims regarding the FCC actions. For example, the court noted that Verizon as well as AT&T both claimed that they were already entering into roaming agreements voluntarily, when in reality a number of smaller wireless companies reported that even getting Verizon and AT&T to respond to requests for negotiation was often impossible.

In addition, the court noted that "Verizon oversimplifies the Commission's reasoning and omits key language in the Order, creating a contradiction where none exists. As one of several arguments against AT&T's and Verizon's assertions that the rule would remove incentives for investment, the Order states that "providers [would be] unlikely to rely on roaming arrangements in place of network deployment as the primary source of their service provision."

Instead, the court noted that because carriers wouldn't have to allow roaming by companies that wouldn't build out their own networks, the order effectively encourages the investment by carriers in building their own infrastructures. In other words, the order will encourage the growth of broadband by all carriers, not just the biggest few.