Party Line Vote Forces US Carriers to Sign Mobile Data Roaming Agreements

by Jordan Richardson on April 8, 2011

In what was an expected party line vote, the Federal Communications Commission has mandated that larger carriers must sign roaming agreements for mobile data with their smaller competitors. These agreements had previously been voluntary.

The vote was 3-2, with the Democratic commissioners (Chairman Julius Genachowski, Mignon Clyburn and Michael Copp) voting for the arrangement and the Republican commissioners (Robert McDowell and Meredith Baker) voting against it.

For McDowell’s part, he suggested that the FCC lacks the legal authority to pass such a decision. Because data is considered a private service, it is not eligible to be held to common carriage regulations. “The majority’s efforts to legally justify the new regulations, no matter how well meaning, cannot survive dispassionate analysis,” wrote McDowell.

So what do the new rules do?

One thing they don’t do is set prices for roaming agreements, which means that carriers can set “commercially reasonable rates.” The onus is on the carriers making the agreements, but the FCC can house an arbitration process should an agreement not be possible. The fear from Republicans is that the FCC could, through the arbitration process, set roaming rates too low. This, they argue, would provide the major carriers with little incentive to build bigger and better mobile broadband networks.

The major carriers expectedly disapproved of the agreements, with AT&T’s spokesperson calling the new rules “unwarranted” and threatening that their passage threatens investment in the industry. Verizon Wireless echoed those thought, saying that the FCC has wrought “a defeat for both consumers and the innovation fostered by true competition.”

The Democrats, on the other hand, argued that the new rules allow carriers to separate agreements with each unique competitor.

Rural carriers also approved of the agreements. “In a few years, we will look back at today’s decision and wonder why there was ever any hesitation to require competitive connectivity in an IP world,” Rural Wireless Association president and CEO Steven Berry said. “Requiring automatic data roaming is the only logical conclusion you can come to. It is pro-business, pro-investment, pro-jobs and pro-competition.”

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