Roaming – until recently a backburner, stand-alone issue – suddenly has emerged as a potential pivot point in the Federal Communications Commission’s consideration of two major transactions and competition policy in general for a wireless sector that has experienced relentless consolidation during the past decade.
But for FCC Chairman Kevin Martin, who postponed a scheduled Aug. 22 vote on revisions to the roaming rule to take account of AWS-1 and 700 MHz auction winners that cannot yet access their recently won spectrum, it’s possibly even worse. Recalibrating roaming policy has become an elusive, Rubik’s Cube-like challenge with potential permutations and implications evolving in ways that appear to have federal regulators baffled and at war with each other.
“Chairman Martin pulled the item from the agenda and from circulation until he’s able to get majority support for it,” said Robert Kenny, an FCC spokesman.
Kenny said Martin did not agree with counter proposals by the GOP-led commission’s two Democrats on revisions to the in-market provision in automatic roaming guidelines. Kenny said liberal rule modifications sought by Michael Copps and Jonathan Adelstein conflicted with Martin’s goals of efficient spectrum use and facilities-based competition. Kenny said FCC Democrats also want to shift the automatic roaming burden from wireless operators seeking roaming to carriers being approached to provide that capability.
“It appears the commission is unable to reach agreement on how to address the home roaming exclusion. We expect this delay will allow for consensus among the commissioners for the elimination of the home roaming exclusion prior to the consideration of the Verizon-Alltel merger, as called for by a broad coalition of carriers and consumer groups,” said Laurie Itkin, director of government affairs at Leap Wireless International Inc.
Point of contention
Indeed, roaming has emerged as a flash point in 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.
Small, rural, mid-size and even national operators Sprint Nextel and T-Mobile USA Inc. favor changes to the in-market exclusion in a cellphone market dominated by AT&T Mobility and Verizon Wireless.
“The home market exclusion will hamper the continuing development of the wireless marketplace and interrupt seamless coverage for all consumers, contrary to the commission’s stated purpose in adopting the automatic roaming rule” in 2007, T-Mobile USAtold the FCC.
Hamper buildout?
Many wireless service providers want the FCC to enforce rules requiring facilities-based carriers to provide roaming in markets where other carriers control spectrum, but haven’t yet constructed their networks. Larger carriers argue that they should not be forced to provide access to their networks to licensees that own spectrum in those markets because doing so would give the latter an incentive to postpone buildout of their wireless systems.
In a recent filing, U.S. Cellular Corp. told the FCC that modifying the home-market exclusion “would not undermine system buildout, or result in spectrum warehousing. Rather, it would promote spectrum acquisition and system expansion by assisting carriers in acquiring a customer base. The in-market exception may serve the interests of the largest wireless carriers. But it does not serve the interest of wireless customers, who would benefit from increased service availability, or mid-sized and smaller carriers as reflected in the positions they have taken in this docket.”
Under the in-market exclusion, entities holding a licensee in a given market – regardless of whether they actually have actual control of their airwaves – do not have automatic roaming rights in that market.
Data concerns
U.S. Cellular, Leap, rural cellular operators and others also are pushing hard to have data roaming covered by the FCC’s automatic roaming mandate sooner rather than later. That view is not necessarily shared by larger carriers that also advocate relaxation of the in-market roaming exclusion.
Martin said he strongly supports regulatory incentives to force wireless licensees to put spectrum to work on constructed networks, but acknowledges the current rule doesn’t has created a dilemma for AWS-1 and 700 MHz auction winners that cannot commercially exploit frequencies for which they paid rights to because their frequencies remain occupied by other users.
As such, under Martin’s plan, companies would be entitled to roaming agreements for four years in markets where they are licensed, but have not yet been given access to frequencies. The four-year in-market roaming period would run from the time licensees actually gain use of the spectrum, not from the beginning of the license term itself. In addition, Martin would delay enforcement of the in-market roaming exclusion rule for one year for all wireless carriers across the board.
