Legislation would force roaming in rural areas: Universal service debate reaches beyond FCC

Rep. Henry Waxman (D-Calif.), chairman of the House Oversight and Reform Committee, introduced legislation to require telecom recipients of rural universal-service funds to provide automatic roaming on just and reasonable terms to wireless carriers, adding a new dynamic to a raucous roaming debate that until now has played out almost exclusively at the Federal Communications Commission.
Waxman’s bill, the Universal Roaming Act of 2008, has been referred to the House Commerce Committee. Further action on the bill is not expected until next year, with Congress trying to adjourn by week’s end but unlikely to do so because of work on the Bush administration’s $700 billion Wall Street bailout plan.
Waxman’s panel has been analyzing responses from two dozen telecom companies to detailed inquiries on high-cost USF support – totaling billions of dollars – which the firms have received in recent years. High-cost rural subsidies are but one component of a stressed universal-service fund that is the focus of reform efforts at the FCC and in Congress.
Last month, FCC Chairman Kevin Martin, lacking adequate support, postponed a scheduled vote on revisions to the roaming rule. The proposed changes, among other things, would accord roaming rights to some AWS-1 and 700 MHz auction winners that cannot yet access their spectrum. Under the FCC’s in-market exclusion rule – designed to promote efficient spectrum use – such entities lack standing to secure roaming from wireless operators in markets where new and incumbent licensees have spectrum rights, but only the latter have facilities in place.
Small, rural, mid-size and even national operators like Sprint Nextel Corp. and T-Mobile USA Inc. favor changes to the in-market exclusion in a cellphone market dominated by AT&T Mobility and Verizon Wireless.
Some large carriers, however, argue they should not be forced to provide access to licensees that own spectrum – but have not deployed networks – in those markets because doing so would give those licensees incentive to postpone buildout of wireless systems. The parent companies of the top two wireless operators, AT&T Inc. and Verizon Communications Inc., ranked as the first ($441 million) and fourth ($301 million) largest beneficiaries, respectively, of high-cost rural subsidies in 2007.
The Waxman bill, which appears to go further than proposed FCC changes to the in-market exclusion rule, would attach the automatic roaming obligation to any affiliate of a telecom carrier that receives high-cost USF subsidies six months after the legislation is signed into law. The measure does not address data roaming, a hot-button component of the roaming debate at the FCC. Moreover, the bill leaves to the FCC the job of resolving roaming disputes between telecom carriers and steers clear of roaming rate regulation.
Rural association supports bill
“RCA supports the legislation introduced by Congressman Waxman,” said David Nace, general counsel for the Rural Cellular Association. “Requiring carriers to provide automatic roaming services – in all markets – on just and reasonable terms without geographic limitation is in the public interest. In fact, customers now demand such interoperability. RCA will continue its advocacy efforts to ensure that roaming obligations are soon extended to data services.”
Nace sees the Waxman measure as far-reaching and beneficial to smaller wireless carriers.
“While the legislation ties the mandatory provision of automatic roaming only to recipients of high-cost funding,” stated Nace, “the reality is that the legislation will require companies like Verizon Wireless and AT&T, as recipients of high-cost support, to provide automatic roaming to many more tier-two and tier-three carriers that have been unfairly disadvantaged by the in-market exception.”
RCA has mounted challenges at the FCC and in federal appeals court over an agency rule change that would cap high-cost USF subsidies available to mostly wireless carriers desiring to build systems in rural areas.
The roaming debate has begun to bleed into major pending transactions such as Verizon Wireless’ proposed $28 billion purchase of Alltel Communications L.L.C. and the Sprint Nextel Corp.-Clearwire Corp. WiMAX union pending before the FCC.