Mobile wireless data providers must offer roaming agreements to competing carriers on “commercially reasonable” terms following the D.C. Circuit Court’s decision to uphold rules first adopted by the Federal Communications Commission in 2011. The FCC’s data roaming requirements were designed to supplement existing roaming obligations on mobile carriers that only applied to voice services by facilitating access to data services when customers travel outside of their providers’ networks. As we reported previously, the data roaming rules were adopted by a closely-divided FCC and were subsequently challenged by Cellco Partnership, more commonly known as Verizon Wireless.
Verizon Wireless challenged the data roaming obligations on three grounds, arguing that: (1) the FCC lacked statutory authority to impose “common carrier” type rules on mobile data providers; (2) new rules were unnecessary because mobile data providers were already entering into voluntary roaming agreements with competing carriers; and (3) roaming obligations would reduce incentives to expand wireless infrastructure if providers must share their networks with competitors. Verizon Wireless alleged that the roaming requirements would unfairly benefit smaller carriers with limited networks at the expense of larger providers. In response, the FCC stated that the new rules did not impose common carrier type regulations on mobile data providers and the requirements were necessary in order to prevent larger carriers from excluding smaller providers from their networks.
The D.C. Circuit began by noting that the FCC may not impose common carrier type obligations on providers of “information services,” including mobile data providers. However, the court found that the data roaming rules allow providers to negotiate the terms of their roaming arrangements on an individualized basis and do not require providers to serve other carriers indiscriminately on standardized terms. While the court recognized that the data roaming requirements “plainly bear some marks of common carriage,” the court deferred to the FCC’s determination that the new rules did not amount to common carriage regulation because providers can negotiate flexible terms and conditions. The court further concluded that the data roaming rules did not constitute an unconstitutional taking of Verizon Wireless’s data network or represent arbitrary and capricious rulemaking. Although supporters of the roaming rules also suggested that the court’s decision supports the FCC’s net neutrality rules currently subject to a separate appeal, the court in the data roaming case found that the FCC has explicit jurisdiction over wireless carriers under its broad authority over radio communications under Title III of the Communications Act.