News Flash! FCC Identifies Market Failures in Wireless Marketplace

[Commentary] The Federal Communications Commission's recent Second Report and Order on data roaming obligations of facilities-based operators offers two fascinating insights, only one of which will receive much attention.

Scholars and practitioners alike will concentrate on the FCC’s use of Title III spectrum management as the basis for mandating data roaming negotiations, backed up by formal complaint resolution. Analysts will marvel at how the Commission has managed to impose an interconnection regime without convincingly addressing how information service providers lawfully bear such duties. Additionally the Commission does not fully explain how the duty to negotiate on commercially reasonable terms and conditions does not constitute common carriage and a “duty to deal.” This document is very, very important, because the FCC clearly identifies instances where the nature and type of wireless competition is inadequate to guarantee data roaming agreements between the major national carriers, such as AT&T and Verizon, and just about any other carrier. Only AT&T and Verizon opposed a data roaming obligation, because, as noted by the Commission, these carriers have refused to deal and market consolidation “has reduced the number of potential roaming partners for some of the smaller, regional and rural providers” while also reducing the need for AT&T and Verizon to secure reciprocal roaming agreements. Such candor coming from an agency that never saw a wireless merger it could not approve and has never disputed industry claims regarding how tirelessly they have to compete.