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T-Mobile US Challenges AT&T, Verizon Wireless’ Roaming Charges Appeal To The FCC

February 8, 2015 - Written By David Steele

One of the disadvantages of using a carrier with less than complete coverage is that there may be times when you’re out of service. In the UK market, at this point you’re out of luck; no service means no service. However, in the North American market, many carriers have roaming agreements with their competitors to allow subscribers to continue to use their device where they have no native coverage. This means that there’s less to fear going with a smaller carrier, such as T-Mobile, because you may be able to piggyback onto one of the larger carriers’ networks. T-Mobile have used, relied if you will, on the larger carriers of AT&T and Verizon Wireless, to shore up their network through a number of commercial arrangements. In other words, when customers use network data that isn’t owned by their carrier, T-Mobile are billed this. T-Mobile US have objected to the rates that they’re charged for customer roaming and as to how these are calculated, so sought clarification from the Federal Communications Committee, or FCC. The FCC’s ruling arrived at the end of 2014 and provided guidance at the end of last year as to what constitutes a “commercially reasonable” data roaming rate by essentially agreeing with T-Mobile’s ideas.

Both AT&T and Verizon have filed to reverse the December FCC ruling. The four factors used in determining a reasonable roaming rate are: retail rates, international roaming rates, MVNO / resale rates and existing market roaming rates charged by other providers. AT&T and Verizon have objected because there is no mention of network build-out plans and they believe the new structure would “discourage investment and unfairly advantage one company over other.” In other words, they are using a high roaming charges to encourage carriers build out their own network. T-Mobile says that AT&T and Verizon are ignoring their regulatory obligation to provide data roaming on commercial reasonably terms regardless of the state of network build-out plans in the regions concerned. The new rules mean that any disagreement between roaming rates needs to be taken to the FCC on a case by case basis, which will delay the process and may favor the smaller network. T-Mobile has hit out at AT&T and Verizon, saying that their actions are “nothing more than untimely renewed attempts” to change the regulations [back] in their favor.

I applaud T-Mobile US for the original complaint taken to the FCC. Whilst on first impression, T-Mobile has less to lose compared with the competition, this is not the case. T-Mobile US has everything to prove: it needs to be able to go it alone and competition is heating up rather than simmering down. It should not need high roaming rates to encourage the build out of its network, although this does not appear to be the main underlying issue here. Instead, it’s about keeping the US market fair between the carriers and ensuring that AT&T and Verizon don’t punish T-Mobile US for being the little guy. And doesn’t it just remind you of siblings squabbling at the dinner table?