Wireless Data Roaming Rules Upheld by D.C. Circuit

By J. Bradford Currier, Marc Martin, and Marty Stern

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.

Verizon Challenges FCC Data Roaming Rules

In a move expected by many industry analysts, Verizon Wireless filed a notice of appeal last week in the U.S. Court of Appeals for the District of Columbia challenging the data roaming obligations imposed on wireless carriers adopted by the FCC last month. The FCC order required all wireless carriers to allow customers of competitors to roam on their data networks and mandated “commercially reasonable terms” for intercarrier roaming agreements. The Commission adopted the data roaming order through a close 3-2 vote, with Commissioners Robert McDowell and Meredith Baker questioning the FCC’s authority to impose common carriage-like requirements on an information service.

Verizon’s appeal echoes the dissenting Commissioners’ concerns, characterizing the data roaming order as an arbitrary and capricious exercise of the FCC’s power that unduly burdens major carriers such as itself and AT&T. The company further contends that the new regulations are unnecessary due to the many data roaming agreements the company has with small- and medium-sized wireless companies. Verizon stated that the company now has less incentive to expand its wireless infrastructure if it must share its network with outside users. Meanwhile, consumer watchdog groups hailed the order as necessary to sustain competition during a time when AT&T’s attempted purchase of T-Mobile may lead to further market consolidation.

The data roaming appeal marks Verizon’s most recent challenge to the FCC’s statutory authority at the D.C. Circuit. Just last month, the court dismissed suits brought by Verizon and another carrier against the FCC’s net neutrality regulations because the carriers filed their complaints prematurely.

FCC Adopts New Data Roaming Rules to Promote Mobile Broadband

by Brendon P. Fowler

On April 7, 2011, the FCC voted 3-2 to require mobile broadband operators to offer data roaming arrangements to other providers. Such arrangements allow consumers with mobile data plans to remain connected by utilizing another network while roaming outside their own provider’s network coverage. Conceptually, the data roaming rules are related to those already established for voice roaming, and Chairman Genachowski tied the Commission’s present action to its prior efforts to develop "automatic" voice roaming and nationwide voice services. Analysts believe that the decision will benefit companies like Sprint Nextel Corporation and MetroPCS Communications Inc. at the expense of AT&T and Verizon Wireless by allowing smaller competitors onto the networks owned by larger rivals, and by enabling smaller carriers to offer more broadband services.