By unanimous vote the US Federal Appeals court has upheld an earlier ruling by the Federal Communications Commission (FCC) that the big mobile operators in the US must sign data roaming deals with smaller competitive wireless networks. The decision is one in the eye for Verizon (and AT&T) which had appealed the original 2011 ruling by the US regulator. Martyn Warwick reports.
Verizon's case was that the FCC does not have the power to impose data roaming agreements on it but the panel of three judges of the US Court of Appeals in Washington, DC, thought otherwise and unanimously rejected Verizon's claim that the national regulator was beyond the bounds of its powers when it ruled that mobile operators must offer roaming agreements to competitors on "commercially reasonable" terms.
The court also threw out on its ear a further argument from Verizon that the FCC ruling means that mobile web-service providers should be classified as "common carriers", a designation that hitherto has applied only to landline telcos.
All in all it was a bad day for the behemoths and the Appeals Court judicial panel was blunt in its judgement, ruling that "the data roaming rule merely defines the form mobile-Internet service must take for those who seek a license to offer it."
It then tellingly adds that if it continues to oppose the FCC's original decision Verizon "may choose not to provide mobile-Internet service." in other words the court is calling Verizon's huffery-puffery bluffing and implying that if Verizon and AT&T don't like the rules, there is nothing compelling them to stay and play the game.
Verizon's case was that in a competitive environment, it should be free to conclude roaming agreements with whomsoever it wishes and that the FCC should butt out of telecoms commerce.
This argument flies in the face of reality because, between them, Verizon and AT&T already own the two biggest telecoms networks in the US and dominate the market with a 66 per cent share.
The drift towards a de facto mobile duopoly has been evident for years and the slow but remorseless tectonic shift has been exacerbated by the fact that Verizon and AT&T have filibustered shamelessly and placed obstacle after obstacle in front of those much smaller competitors who wanted to enter roaming into agreements.
In evidence submitted to the FCC by the Rural Telecommunications Group and the National Telecommunications Cooperative Association it was claimed that their members were suffering as a direct result of "anticompetitive behavior at the hands of AT&T and/or Verizon Wireless."
The two organisations said that some of the rural telcos in the US has been waiting for at least eight months and often for up to as long as a year just to receive a proposal on data roaming rates from the likes of Verizon and AT&T after making a request for a data roaming agreement with the big boys. Then, when the proposal eventually and at last arrived the small rural telcos found the rate offered by the Big Two to be "many orders of magnitude higher" than that offered to the carriers' own customers.
In a statement made after the Appeals Court ruling was announced, the chairman of the FCC,
Julius Genachowski, said the decision "confirms the FCC's authority to promote broadband competition and protect broadband consumers."
He added, "Our rules have empowered consumers and expanded their ability to enjoy the benefits of seamless and nationwide access to mobile data services, including wireless Internet and e-mail, Enacting data roaming rules is one of many strong actions the FCC has taken in this area, and we will continue to promote broadband investment and innovation to help keep competition alive." And if there's one thing that wireless data services in the US are desperately in need of it is meaningful competition.
Steve Berry, president of the US Competitive Carrier Association, commented, "This is a decisive victory for consumers and an extremely positive outcome for competitive carriers and competitive policies. I could not be more pleased with the outcome for a Data Roaming Order that supports competition. This is one important piece of the puzzle to ensure competitive carriers may deploy 4G LTE services to consumers across the nation."
What never ceases to both amaze and stick in the craw is the unmitigated arrogance of the big US wireless players. They apply "the laws" to the most minute curlique of a serif on every letter of it when it suits them to do so but when a ruling goes against them those self same laws become "unwarranted government interference".
The fact is that the FCC came into being on June 19, 1934 and has always been tasked with the nationwide regulation of radio communications. If Verizon is so all-fired determined not to be regulated by the FCC (except when it suits the operator to be regulated or, even better, for its rivals to be regulated against) then it can simply walk away from the sector and hand back its spectrum to the FCC. The regulator would then be free to reallocate spectrum licenses to a range of competitive new wireless operators who behave rather differently to Verizon Wireless and the world would be a better place.
By the way, if you want to look it up, the case is Cellco Partnership[aka Verizon and Vodafone} v. FCC, U.S. Court of Appeals for the District of Columbia Circuit, No. 11-1135.
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