The Federal Communications Commission is about halfway through the process of drafting new rules that could require wireless carriers to sign automatic roaming agreements with competitors, with those new rules coming as soon as this spring.
While some small telecommunications carriers welcome the possible rules, most larger carriers point to the growing competition in the wireless industry and argue that government intervention is unnecessary. Consumer demand encourages carriers to sign automatic roaming agreements, they have told the FCC, and a mandate would prove prohibitively expensive and discourage companies from building their own networks, instead relying on others who have built out towers and purchased spectrum at auctions.
"The FCC takes an unusual approach" in drafting these rules, said Jere Glover, chief counsel for advocacy for the U.S. Small Business Administration. He says there's no evidence contradicting the notion that consumers are able to roam more freely than ever before. "Rather than identifying a problem and proposing a solution to redress the problem, the FCC does the reverse," he said.
Nextel under fire
While most industry officials agreed the wireless market is more competitive than ever, Nextel Communications continues to feel some heat for its dominance in the more narrow market of carriers using wide-area digital systems, particularly Motorola's digital iDEN technology. After Nextel and its partners, there are only two other carriers in the United States using iDEN, and both argued Nextel has refused to sign roaming agreements.
Southern LINC of Atlanta, an iDEN provider, dismissed the idea that Nextel would be hit by expenses if it signed roaming agreements. Such expenses "would be negligible and offset in any event by revenues from roaming fees." The company said Nextel's market position raised "antitrust concerns."
The other iDEN provider in the United States, Pacific Wireless Technologies of Fresno, Calif., said it is close to concluding a roaming agreement with Southern but has had no luck with Nextel.
"Nextel has roaming relationships with other iDEN carriers, so roaming cannot be impossible from a technical standpoint," said Pacific President Jeffery Fuller, referring to Nextel's agreement with Clearnet Communications of Canada. "Nextel, however, apparently only refuses to enter into roaming agreements with one class of entity--domestic iDEN competitors," he said.
"Wireless competition is thriving as a result of the Commission's deregulatory policies," said Nextel in written comments to the FCC. The company argued that automatic roaming would hurt consumers "by eliminating real choice in the marketplace, particularly as the industry moves toward launching third-generation (3G) technologies."
A roaming mandate "would encourage companies to forgo real investment in 3G," a service that promises high-speed Internet access and other features over wireless phones, Nextel said. Companies would "deploy instead a geographically limited system that relies on the 3G networks of other carriers for providing a broader service."
Strong market, unsure future
This is not the first time the FCC has considered mandating automatic roaming, and most industry participants that commented on the agency's recent proceeding said it should continue to resist new rules.
Cingular Wireless, a joint venture of BellSouth and SBC Communications, said such a mandate would discourage facilities-based competition, increase costs to consumers and undermine competition. The Cellular Telecommunications and Internet Association (CTIA) agreed.
Verizon Wireless also agreed, noting "competition is strong in the (wireless) marketplace and will continue to get stronger." Verizon "does not reject requests for roaming agreements where technologies are compatible," the company told the FCC.
Sprint PCS also said that new rules were not necessary. But it noted that universal PCS roaming is not yet here, because in most areas roaming requires use of at least one cellular network. Suggesting that some cellular carriers possess "dominant market power in their regions," Sprint told the FCC that it has "experienced roaming prices that vary from 200 percent to 500 percent in the same market."
"Sprint PCS does not recommend adoption of a new automatic roaming rule," the company told the FCC, but "the Commission must be prepared to intervene if any carrier attempts to misuse its roaming market power."