Verizon Tells Waxman It Supports Roaming Mandate

The letter specifically offers concessions on the home roaming exception, a surprise feature of the automatic roaming rules approved by the FCC two years ago. The exclusion gives carriers a right to deny roaming to another carrier in any market where the second carrier owns spectrum, even if the market has yet to be built out by the second carrier.

The in-market exception “attempted to rewrite the build- out obligations of carriers overnight and was opposed by every wireless carrier other than AT&T and Verizon,” Sprint Nextel said. “Verizon is now attempting to lock in this special regulatory favor by offering in-market roaming to selected carriers for a two-year period. Sprint Nextel strongly opposes Verizon’s attempt to restrict the ability of customers to roam freely regardless of where they travel.” Many of the networks on which Verizon would attempt to restrict roaming “were constructed using substantial USF funding (primarily in Alltel territories) and cannot be economically duplicated today,” Sprint added. “Having purchased these assets, Verizon should not be free to now prevent other carriers from providing roaming services to customers traveling through these areas.”

T-Mobile had similar concerns. “T-Mobile advocates repeal of the in-market exclusion … because repeal would level the playing field for all carriers and facilitate coverage for consumers who increasingly expect their phones to function seamlessly anywhere and anytime,” the carrier said in a statement. “The FCC should move rapidly to repeal this misguided exception to their roaming rules. Verizon’s new position is still anti-consumer and anti-competitive.”

The committee is concerned that the FCC’s current regulatory approach “may disadvantage mid-size and small competitors who may face obstacles to building out their networks,” Verizon Wireless acknowledged in its letter. Discussions with committee staff have been a “catalyst” that prompted Verizon’s proposal, which it said balances concerns of new entrants with “the need to incent network investment and spectrum utilization.”

The deal would be limited to two years after the date a law is enacted or rule takes effect. After that, it would still apply for carriers holding spectrum occupied by the government, or if the spectrum of the requesting carrier was licensed for CMRS purposes less than two years earlier. The offer would extend for one additional year if the requesting carrier has met build-out benchmarks established by the FCC or Congress for spectrum it holds. “Congress and the FCC should reject efforts to require in-market roaming on an individual basis,” said the letter. AT&T declined comment on the offer, saying it was still studying it, a spokeswoman said.

Former acting FCC Chairman Michael Copps circulated a draft order addressing the home roaming issue on June 26, in the waning days of his administration, commission officials said Thursday. The order got two votes, from Copps and former Commissioner Jonathan Adelstein, but didn’t attract a third. Last summer, former Chairman Kevin Martin circulated an order addressing the home roaming exclusion, but pulled it citing a lack of consensus among his fellow commissioners.

Public Knowledge immediately condemned the proposal as another “hollow” offer, said Legal Director Harold Feld. Verizon announced last week it would limit any new handset exclusivity agreements it signs to six months, after which the handset will be available to small wireless carriers -- those with fewer than 500,000 customers (CD July 20 p1). Feld said Verizon’s roaming proposal is “yet another attempt for Verizon to use its version of corporate charity to influence policymakers at a time when substantive, legally binding rules are what is required for fairness.” Verizon’s handset offer came after the committee began internal drafts of legislation limiting exclusivity deals (CD May 22 p3). Feld said neither of Verizon’s offers impress “parties that are supposed to be the beneficiaries.”

“Chairman Waxman clearly cares about this, so it’s smart for Verizon to move in his direction,” said Washington Research Group analyst Paul Gallant. “But there’s still a long way to go between Verizon’s offer and a new roaming rule at the FCC.” Waxman introduced a roaming bill last September that would have required carriers receiving universal service support to provide roaming service to any carrier upon request.

Waxman hasn’t taken action on the matter since he assumed leadership of the committee, which is engrossed in energy and health care legislation. Still, he attended a hearing Communications Subcommittee Chairman Rick Boucher, D- Va., chaired on wireless competition issues in May (CD May 8 p2) and reiterated his position that carriers receiving federal funds should be required to provide roaming on “just and reasonable terms.” Waxman’s bill in the last Congress would have given carriers the option of providing roaming or ask the FCC for permission to opt out of the USF program.

LeapWireless and Cellular South made a strong pitch at the hearing for congressional action to order carriers to provide roaming. They argued that large carriers like Verizon and AT&T are choking competition by refusing roaming agreements. Cellular South said Congress should mandate that carriers provide automatic data roaming to requesting carriers that use compatible technologies.