In the last couple weeks, in a series of meetings with the FCC, T-Mobile continued its on-going campaign for rate regulation of roaming services. T-Mobile frames its argument as a request for clarification. But make no mistake – T-Mobile is not seeking a clarification of the Commission’s 2011 Data Roaming Rules. It is instead seeking radical changes in those rules that would gut the balance the FCC struck between ensuring the availability of commercially reasonable data roaming services while maintaining incentives for carriers to build out their networks.
AT&T’s previously filed opposition demonstrates in no uncertain terms that the data roaming market is functioning well. AT&T alone has successfully negotiated more than 30 data roaming agreements since the release of the data roaming order, eight of which are LTE roaming agreements, including some with carriers that have not yet deployed LTE networks but wanted the surety of a commercial agreement on which to plan their LTE deployments. Indeed, T-Mobile’s own petition demonstrates that the market is working as it details the recent dramatic declines in the data roaming rates T-Mobile is paying.
Those declines include very marked declines in the rate T-Mobile is paying to AT&T. That rate is more than 70% lower than it was just three years ago, and it compares favorably with the rates T-Mobile claims it pays other providers. In fact, the rate T-Mobile pays AT&T is lower than the average rate paid by AT&T: AT&T currently pays an average roaming rate that is higher than the 30 cents T-Mobile reports that it paid to other providers in 2013 (and significantly higher than the 18 cents T-Mobile projects it will pay in 2014).
T-Mobile nonetheless tries to blame its decision to throttle and/or cap data usage by its roaming customers on high data roaming rates. In doing so, T-Mobile conveniently ignores the fact that it has other options, including building out its own broadband network. A recent survey of FCC files indicates that T-Mobile has spectrum throughout the continental U.S. Yet, as shown by the coverage viewer on T-Mobile’s website, T-Mobile has failed to build out its network in extensive areas throughout the Midwest, Mountain, and certain Eastern portions of the U.S. In these broad swaths of the country, T-Mobile holds PCS and AWS spectrum that it could use to provide broadband services. It instead has chosen to rely on roaming. In contrast, AT&T has built out its network in many of those same areas, and, notably, it did so with the same higher frequency spectrum T-Mobile holds. There is no reason T-Mobile could not do the same.
In the 2011 Data Roaming Order, the Commission expressed concerned about “the possibility that requesting providers will substitute roaming for investment in coverage and accordingly under-invest in deploying new infrastructure.” T-Mobile’s petition demonstrates why the Commission was right to be concerned then, and should be even more concerned now. If T-Mobile wants to rely on roaming instead of network build, even where it has un-deployed spectrum, it can do so, subject to the terms of its spectrum licenses. And under Commission rules, it is entitled to commercially reasonable roaming terms. But the Commission should not reward T-Mobile for sitting on large amounts of spectrum that could be used for broadband services by rewriting the data roaming rules to encourage underinvestment.
In short, T-Mobile’s latest effort to manufacture a case for new data roaming regulations offers no reasoned basis for the Commission to abandon the careful balance struck in the data roaming order. T-Mobile, like the rest of the industry, has shifted to LTE, and can choose among multiple LTE roaming partners, including new roaming hub arrangements like the kind that Sprint has entered into with 27 carriers covering 38M POPs
And, if T-Mobile cannot secure what it feels are commercially reasonable terms, the current rules allow T-Mobile to file a complaint. Nothing more is needed.