Carriers Say ‘In Market’ Exception Would Undermine Roaming Mandate

“The home roaming exclusion will harm consumers, reduce competition, and undermine the Commission’s objective to protect life and promote public safety,” MetroPCS said. “The in-market roaming restriction will be difficult if not impossible to implement given the number of different wireless service areas and service variations that exist in the market.”

Language in the FCC’s roaming order, approved at its Aug. 7 meeting, is especially troublesome for carriers who bought spectrum in the advanced wireless services auction (AWS) and now must wait for the spectrum to be cleared to build out their systems (CD Aug 8 p1). Leap and MetroPCS invested heavily in AWS spectrum, as T-Mobile did, and all see the provision as problematic, according to company officials. MetroPCS, for example, was the top bidder for a massive regional license covering the Northeast and carriers wouldn’t have to honor its roaming requests throughout the region. Leap bought a license covering the Midwest region.

MetroPCS said the provision also has implications for winners in January’s 700 MHz auction. “The situation in AWS is not unique,” the carrier said. “In Auction 73, high bidders will have to wait until the DTV transition date -- currently set at February 2009 -- before having access to the 700 MHz spectrum.”

Laurie Itkin, director of government affairs for Leap, told us Monday that the in-market exception undermines her company’s ability to negotiate national roaming agreements with Verizon Wireless and Sprint Nextel or other CDMA carriers. For example, she said, Leap didn’t buy spectrum in Maine during the AWS auction. “What kind of agreement do you think we can negotiate when they will hold over our heads, ‘We'll give you fair and reasonable rates in Maine, but we'll give you no coverage in your home area'?” Itkin said. “Wireless carriers do not usually negotiate roaming deals on a license-by-license basis or market-by-market agreement. We have national agreements.” Itkin said she’s hopeful the FCC will “have an open mind on the issue.”

“Leap strongly urges the Commission to reevaluate its conclusion that carriers can simply ignore requests for automatic roaming in any area where the requesting carrier holds a wireless license or leases spectrum,” Leap said. “The extremely broad ‘in-market’ exception, as defined in the Roaming Order, effectively swallows the automatic roaming rule and defeats many of the public interest benefits that the Commission sought to promote by establishing the rule in the first place.”

Leap highlighted the problems posed by its investments in AWS spectrum. Leap said it wouldn’t be entitled to roaming protections in the “vast majority” of the nation. “Immediate build-out of the licensed areas established in the AWS spectrum is not practicable given their sheer size not to mention the fact that government agencies have estimated it will take up to four years or more for the spectrum to even be cleared for commercial use,” Leap said. “Efforts by carriers to coexist with government agency operations before clearing this spectrum, moreover, are riddled with challenges, particularly with respect to spectrum used for top-security and mobile surveillance operations.”

MetroPCS noted that besides spectrum-clearing issues, a network often requires years to complete buildout in each market, when customers will have need the ability to roam on other networks. “Building a competitive system as a new entrant can be time-consuming due to the increasing difficulty of finding suitable sites and getting all of the local, state and federal regulatory approvals necessary to put the sites to use,” the carrier said. “Often, the most critical areas to serve (e.g., congested center business district locales) are the most difficult to reach due to siting restrictions.”

“Hopefully, the FCC will be open to revisiting the in- market issue once the full implications of this limitation are explored on reconsideration,” said an industry source who has been active on roaming. “While we suspect other parties may raise other issues, the in-market issue is the only one with merit, as it severely limits the benefits many consumers could receive as a result of the FCC’s decision.”