T-Mobile Fights FTC Cramming Charges, Petitions FCC

T-Mobile's busy July has included defending itself against FTC allegations of bill cramming, and public interest support of its petition to the FCC.


T-Mobile and Capitol Hill have recently interacted in two notable ways. First, in a proactive fashion more typical of the so-called "Un-carrier," T-Mobile called on the Federal Communications Commission (FCC) to spell out exactly what qualifies as "commercially reasonable"—the FCC's language in its Data Roaming Order—regarding data roaming agreements. And second, this time on the defensive, it responded to a Federal Trade Commission (FTC) complaint accusing it of making bogus charges on customers' bills.

T-Mobile Petitions the FCC

T-Mobile petitioned the FCC in May, calling the roaming market "dysfunctional" and asking the FCC to "arm providers with the tools they need to obtain the data roaming agreements necessary to enable them to compete."

AT&T and Verizon, which own the majority of the relevant spectrum, aren't offering reasonable terms, which forces T-Mobile to throttle customers' data use, it argued.

"Data roaming traffic carried by the substantial majority of roaming partners other than AT&T is generally offered at rates that do not require throttling or capping," it wrote.

On July 10, the common-interest groups Public Knowledge, the Open Technology Institute at New America Foundation, the Benton Foundation and Common Cause filed comments with the FCC in support of T-Mobile's petition.

AT&T and Verizon have the "incentive and the capability to raise data roaming rates (or deny data roaming entirely) and thus disadvantage its competitors," they pointed out, noting that the Commission determined this in its 2011 Data Roaming Order.

In addition to imposing artificially high prices on their own customers, the filing continued, "AT&T and Verizon can maintain a highly aggressive cap on data usage, coupled with significant overage charges, by denying competitors such as T-Mobile the ability to offer truly unlimited data packages."

Public Knowledge Senior Vice President Harold Feld, in a follow-up blog post July 11, wrote that AT&T and Verizon's practices not only make it financially impossible for their competitors to offer uncapped data, but it allows them to keep their own broadband "capped and overpriced."

Worse, he added, "with things like AT&T's '1-800-Broadband' initiative that lets third-party providers pick up the tab for these artificial overage fees, AT&T and Verizon can exploit their spectrum market power to make even more monopoly profits while shafting the competition and consumers."

FTC Accuses T-Mobile of Cramming

In a complaint filed July 1, the FTC charged T-Mobile with "making hundreds of millions of dollars by placing charges on mobile phone bills for purported 'premium' SMS [Short Message Service] subscriptions that, in many cases, were bogus charges that were never authorized by its customers."