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Monday
Apr112011

FCC Adopts Order on Automatic Data Roaming

Kudos to the Commission

There is sometimes a tendency to fixate on the negative aspects of the telecommunications industry and to ignore positive developments…but today I want to comment, happily, on the FCC’s April 7 Order on automatic data roaming. 

Back in February I had written an article arguing for Commission action on the issue; therein I said, “I believe that it is in the best interests of the industry, not to mention consumers, that the FCC act swiftly given the inevitable legal tussles that will follow as the haves try to maintain their current relative advantage.” 

On April 7th the Commission did in fact adopt new data roaming rules requiring that “A provider of facilities-based commercial mobile data wireless services is required to offer roaming arrangements to other such providers on commercially reasonable terms and conditions…”  The FCC also provided exemptions for technological incompatibility, where the provision of data roaming is not technically feasible or requires the host carrier to make changes to its network that are not commercially reasonable and where the host carrier’s service is not generationally compatible with that of the requesting carrier.

The FCC’s actions with regard to data roaming deserve to be recognized for a number of reasons. First, the Commission’s action was both swift and decisive. The industry is in the midst of transitioning to an all IP-based network architecture which over time will migrate all voice and data traffic away from traditional circuit switched networks and necessitate the promulgation of data roaming rules sooner rather than later. How these newer generations of technology will impact the provisioning of communication services is not at all yet clear and by acting now that FCC showed the kind of decisive, yet thoughtful, leadership that will be much needed as the communications industry moves further into this period of significant evolutionary change.

Second, the rules that were adopted by the Commission make sense.  When you think about it, all the Commission said is that data roaming is essential to the continued development of the wireless communications industry and that use of market power by specific players within the industry to deliberately impede that development will be interpreted as a  violation of the rules. 

The individual competitors have been left to negotiate what’s fair with regard to data roaming, but now there is a referee capable of facilitating the orderly conduct of the game. A specific and detailed listing of possible infractions was not needed in this situation and the FCC deftly avoided falling into that trap. The standard of commercially reasonable is well understood and should be a useful standard by which disputes can be settled.

As for the impending legal tussle, Verizon Wireless (NYSE:VZ) wasted no time in outlining its displeasure with the new rules by filing a set of strongly-worded comments last Friday.  In those comments Verizon focuses on two issues which it claims should have prevented the FCC taking action on the data roaming issue: First, Verizon asserts that the commission lacks the authority to issue rules for governing data roaming and second, that the market for data roaming agreements is well-functioning and does not require governmental intervention of any kind.

With regard to the first point, I’m not a lawyer so I can’t provide a legal opinion, but from where I sit, this issue is a technicality. The reality is that what we call the Public Switched Telephone Network and what we call the Internet are merging together rapidly. Current statutes defining communication and information services are now in need of overhaul. Any legal suit filed by Verizon claiming that the FCC lacks the jurisdiction to regulate data roaming should in fact hasten the legislative process on this issue. As for the second point, the only problem I have with the view of the market presented by Verizon is its stark contrast with reality!

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