On April 7, 2011, the Federal Communications Commission (FCC) narrowly adopted an Order requiring all providers of commercial mobile data services1 to offer data roaming arrangements to their competitors on "commercially reasonable terms and conditions." Mobile data roaming allows the customers of one carrier to "roam" or utilize the network of another carrier in locations where the customer's carrier neither owns nor operates any network facilities. According to the FCC, the goal of the new data roaming rules is to "promote consumer access to nationwide mobile broadband service." Since 2007, the FCC has mandated commercial mobile radio service (CMRS) carriers' provision of roaming arrangements for mobile voice and data services that are interconnected with the public switched network, as well as their provision of text messaging and push-to-talk services.2 The new mobile data roaming rule covers previously unregulated non-interconnected mobile services that are provided for profit and are made available to the public.

The New Data Roaming Requirement

While conceding that it cannot precisely define what makes a data roaming agreement "commercially reasonable," the Order provides a list of various factors that the FCC will consider to determine if that test is met. Furthermore, the FCC sets forth certain limitations as to what a host provider can and cannot do:

  • Providers must respond promptly to any data roaming request and avoid actions that unduly delay the course of negotiations.
  • Providers may negotiate the terms of their roaming arrangements on an individualized basis.
  • Providers are not required to offer data roaming arrangements to requesting providers that are not technologically compatible.
  • Providers are not required to offer data roaming arrangements that require unreasonable changes to the host provider's network.
  • Providers may condition the effectiveness of a data roaming arrangement on the requesting provider's provision of mobile data service to its own subscribers using a generation of wireless technology comparable to the technology on which the requesting provider seeks to roam (to ensure the requesting provider is not merely reselling the host provider's services).
  • Providers are allowed to negotiate commercially reasonable measures to safeguard their own quality of service against network congestion or to prevent harm to their networks.

While these requirements provide service providers with a general framework for negotiating data roaming arrangements, the final determination of commercial reasonableness will ultimately be made by the FCC on a case-by-case basis, "taking into consideration the totality of the circumstances."

Complaint Procedure

To ensure a consistent process for resolving both voice and data roaming disputes, the FCC has established a complaint process for the data roaming rule similar to the process available under its voice roaming rules. To resolve any data roaming disputes, parties may file a formal or informal complaint under the FCC's Part I, Subpart E rules3 or file a petition for declaratory ruling under Section 1.2 of the FCC's rules.4 In addition, the Accelerated Docket procedures, including pre-complaint mediation, conditioned upon FCC acceptance of the complaint as eligible for those procedures, may be available for data roaming complaints.5

Remedies

While damages are an available remedy for voice roaming disputes, the FCC excluded the possibility of damages as a remedy for data roaming disputes.

Legal Authority: Title III

The Commission majority argues that Title III provides sufficient authority for adopting the data roaming rule. Title III of the Act provides the FCC with broad authority to manage spectrum, including allocating and assigning radio spectrum for spectrum based services and modifying spectrum usage conditions in the public interest. Although section 332 of the Communications Act prohibits any common carrier regulation of "private mobile radio service," the FCC maintains that the data roaming rule does not amount to classifying mobile data service providers as common carriers.

Industry Reaction

Smaller nationwide mobile carriers, as well as regional and rural mobile providers, welcomed the rule, claiming its adoption is necessary "to ensure the nationwide seamless connectivity to mobile services that consumers have come to expect." By contrast, AT&T and Verizon Wireless, the nation's largest mobile carriers, oppose the data roaming requirement claiming that the market for data roaming has not failed to work so that any regulatory intervention is required, and argue that such a data roaming mandate will discourage investment in network infrastructure. Nevertheless, the FCC concludes that the benefits of the new rule outweigh any costs. In particular, the FCC found that the data roaming requirement will increase mobile competition which will likely result in lower prices for data services and greater consumer utilization of broadband data services. In addition, the FCC maintains that the data roaming requirement will encourage network investment "by helping to ensure the viability of new data network deployments."

Given the lack of defined criteria about what constitutes "commercial reasonable" terms for a data roaming arrangement, and the potential for unequal bargaining power between larger and smaller carriers, we expect a significant number of FCC complaints to be filed by aggrieved smaller carriers seeking relief under the new data roaming complaint procedures.