A declaratory ruling (DR) issued by the FCC’s Wireless Telecommunications Bureau (WTB) states that retail, international roaming and resale rates can be considered as factors in assessing the “commercial reasonableness” of wireless data roaming rates pursuant to data roaming rules issued by the FCC in 2011.
The DR is the first of a pair of high-profile items handed down by the WTB last Thursday. (In the second item, the WTB issued the FCC’s seventeenth annual report on the state of the U.S. wireless market in which the agency—for the fourth consecutive year—declined to make a finding on the competitiveness of the U.S. wireless telecommunications sector “given the complexity of the various inter-related segments and services within the mobile wireless ecosystem.”) In issuing the DR, the WTB addressed a petition, filed earlier this year by T-Mobile USA, requesting the FCC’s guidance and enforcement criteria for determining whether the terms of any particular data roaming agreement meet the standard of commercial reasonableness outlined by the FCC in 2011. T-Mobile advised the FCC that its petition was spurred by AT&T’s “anticompetitive negotiation tactics” in securing data roaming terms. Verizon meanwhile joined AT&T in opposing the petition on grounds that data roaming rates are falling and that existing FCC mediation and complaint procedures are sufficient to resolve any disputes.
Granting T-Mobile’s request, the WTB concluded that “the data roaming rule was intended to permit consideration of the totality of the facts and therefore to permit a complaining party to adduce evidence . . . as to whether proffered roaming rates are substantially in excess of retail rates, international rates and MVNO resale rates, as well as a comparison of proffered roaming rates to domestic roaming rates as charged by other providers.” The WTB rejected Verizon’s and AT&T’s assertion “that it is not appropriate to base data roaming rates on retail, MVNO or international rates because these other rates are based on markedly different factors.” The WTB also stressed that its guidance provides “only . . . that substantial differences from these other rates are potentially relevant reference points in determining commercial reasonableness.” By the same token, the WTB affirmed that the FCC would also consider arguments as to why such other rates “would not be relevant, based on the facts and circumstances of a particular case.”
Protesting that the DR was issued at the bureau level and was not voted on by the FCC’s five commissioners, Verizon Senior Vice President Kathleen Grillo called it “deeply troubling that the [WTB] has changed a fundamental wireless rule in ways that discourage investment.” Along a similar vein, an AT&T official vowed to appeal the ruling “to the full Commission and further, if necessary.” T-Mobile praised the WTB’s action, a Sprint spokesman termed the DR as “an important step to help create a level playing field.”