Computer & Communication Industry Association
PublishedJanuary 25, 2011

Preserving Competition and Consumer Choice among Mobile Broadband Providers

No wireless carrier has a 100% network footprint across the entire United States.  So in order for all competitors to offer seamless mobile service, all carriers must interconnect and provide “out of market” “roaming” services to other carriers on reasonable terms and conditions.  The FCC long ago mandated roaming interconnection for mobile voice service.

Now that more folks are relying on their handheld devices for Internet access and even IP based voice conversations, the FCC has recognized that roaming requirements should be extended to data communications.  The FCC’s 2010 National Broadband Plan recommended that data roaming obligations be enforced.  The FCC staff has done all the requisite work to implement the modernization of its rules.

As a quick background reference on FCC statutory mandates, Title III of the Communications Act governs radio communications generally and FCC authority in this area is unaffected by whether service being offered is voice or data, telecommunications or information service.  In addition, Title II covers interconnection among common carriers, such as cellular mobile wireless providers.

So what’s the source of the current controversy?  Well, it turns out the mobile broadband market is asymmetrically competitive.  The largest two carriers have much larger spectrum inventories and vast legacy networks especially after industry consolidation in the past decade. The big 2 are also the only ones with nationwide wireline network affiliates.  So this means that while they might treat each other fairly as equals, all other wireless carriers must rely on their largest 2 competitors for critical inputs like: 1) backhaul transport, including “special access” broadband connectivity, 2) roaming agreements, and 3) tower siting/sharing.

Like last-mile wireline broadband access, it is a market reality that data roaming will not be provided by AT&T and Verizon at reasonable rates, terms and conditions to its competitors without FCC rules and oversight.  Who are these companies that are being slow rolled and squeezed by the market power of the big 2?  They are Sprint, T-Mobile, Allied Wireless, Bend Cable Communications, Blooston Rural Carriers, Bright House Networks, Cellular South, Cincinnati Bell Wireless, Clearwire, Cox Communications, Leap Wireless/Cricket, Metro PCS, Mosaic Telecom, Nex-Tech, NTCH, NTLOS, SkyTerra, SouthernLINC Wireless, US Cellular, and others who are hiding behind their trade associations for fear of retaliation by the biggest carriers.

This is a clear case of market failure.  T-Mobile, which uses GSM technology, must have roaming on AT&T’s GSM network, as Verizon uses incompatible CDMA technology.  But T-Mobile cannot get a roaming agreement with AT&T.  Other companies report that responses to their requests for negotiation of roaming agreements are routinely delayed and slow-rolled by Verizon. They cannot secure the funding necessary to invest in further geographic build-out of their own networks without roaming arrangements for adjacent markets.

The big 2 argue that if data roaming is required, smaller carriers won’t have any incentive to “build their own” networks out.  But it’s a Catch 22…smaller carriers first need the spectrum and interconnection agreements in place to secure investment capital so that they can expand their own footprints.  Meanwhile AT&T and Verizon have themselves been so slow to build out their mobile networks to rural America that Members of Congress have begun to insist they make their unused spectrum available to rural carriers in partnerships for faster local construction of facilities and service to the public.  West Virginia is one example of this scenario.

Yet, in postponing action on this docket item, the FCC actually seems concerned that many more Members of Congress place a higher priority on the business interests of AT&T and Verizon over rural mobile broadband deployment and the sustainability of competition in the wireless industry and choice of vendors for consumers.  We sure hope it ain’t so.