FCC mandates data roaming – sort of – with new rules for roaming rights for new universe of providers, but with strings attached

In a widely anticipated move, the FCC has mandated that all facilities-based providers of “commercial mobile data service” make available automatic data roaming to other such providers – with some important exceptions. This mandate was strongly lobbied for by almost everyone in the industry – except AT&T and Verizon (collectively, The Big Two), who strongly opposed it. The issue of data roaming has become more and more pressing as mobile communications have rapidly morphed from a voice-centric, common carrier-centric, circuit-switched-centric system to one where voice applications are a small subset of packet-switched data offered by carriers and non-carriers. The Internet is all.

The old mandatory roaming rule which the new requirement supplements applied only to CMRS carriers who are interconnected with the public switched telephone network. The new rule expansively applies to a new species – facilities-based providers of “commercial mobile data services”. (The Commission appears resistant to embracing the obvious acronym, i.e., CMDS, for that universe of services – but we’re not.) 

The operative characteristics of this hitherto undiscovered species are notable both for what they include and what they don’t.  The inclusions and exclusions reflect a careful balancing of the policy issues that raged beneath the surface of this decision.

The Big Two had argued that imposition of a data roaming rule would permit others to piggy-back on the networks the Big Two have spent good money – and lots of it – to build out.   By limiting the new rule’s application to facilities-based CMDS providers, the FCC ensured that the entities seeking roaming privileges would at least have constructed and operated their own facilities somewhere. Even so, the new rule does open the roaming door to the many providers of Internet access, both large and small, who purvey “information services” and are therefore not common carriers.

This latter point raises some questions here at CommLawBlog. The new rule defines CMDS as any mobile data service that is: (a) not interconnected with the public switched network (PSTN); (b) provided for profit; and (c) available to the public or such classes of eligible users as to be effectively available to the public. Except for the bit about interconnection with the PSTN, that’s pretty much the definition of what we used to call a common carrier. Yet the FCC is at pains to insist that it is not treating CMDS providers as common carriers. That’s because such treatment would be forbidden by Section 332(c)(2) of the Communications Act, which prevents the Commission from treating private carriers like common carriers. 

The trick for the FCC was to impose virtually the full panoply of common carrier obligations on facilities-based CMDS providers but to do so outside the realm of normal Title II regulations applicable to common carriers. Those obligations include the duty to interconnect by providing roaming and the duty to do so on “commercially reasonable terms and conditions” (query: is that different from the “just and reasonable” terms that common carriers must offer?). And the targeted carriers are subject to the threat of enforcement through an FCC complaint process.

The distinction in the FCC’s mind seems to be that CMDS providers can negotiate individualized terms and conditions with different companies; they are therefore not bound by the fundamental common carrier obligation to offer the same terms and conditions to all similarly situated customers. However, that characterization seems to contradict the FCC’s own definition of a CMDS provider, which requires an offering of service to the public at large. This tension creates a fault at the very center of the FCC’s regulatory scheme which may be difficult to slip past alert appellate eyes. The FCC continues to impose common carrier-like regulations on services which it is afraid to call common carriage. At some point, however, the quacking gets too loud to avoid calling it a duck.

More granularly, the FCC neatly dealt with a number of the objections raised by the Big Two. It was claimed that, because of the volume of roaming service expected to result from the data roaming obligation, carriers would be swamped and thus unable to serve their own customers. But the FCC has made it clear that CMDS providers can give their own customers priority if capacity becomes squeezed.

There were also questions about how incompatible data technologies would be handled. The FCC declared that facilities-based CMDS providers will not be required to offer data roaming if the requester’s system is incompatible with the host system or would require the host provider to change its own system to accommodate the requesting entity’s service. Finally, to preclude would-be piggybackers from installing older generation data systems on their own systems while taking advantage of newer 3G or 4G technology on other companies’ networks, the FCC said that a roaming provider could condition access to its service on the availability of comparably advanced technology from the requesting company.  

These exceptions to the general rule served to assuage the major concerns raised by the Big Two while also significantly reducing the likelihood that  potential requesters will qualify for roaming privileges. Given that the Big Two were already pretty stingy about entering into roaming arrangements under the existing roaming rules (which brook few exceptions), the possibilities for jerking requesting companies around under the new scheme are endless. And here, because CMDS is not a common carrier service, the award of damages through the complaint process is not a possibility.   So the FCC has de-fanged and de-clawed hapless roaming requesters at the outset.

We offer, in closing, two observations.   First, the concept of “interconnection” with the PSTN may one day become broad enough to make that element of the CMDS definition meaningless. Eventually all communications will be IP-based, a fact the Commission is addressing in its effort to reform the intercarrier compensation regime – and that eventuality will erase the already thin line between CMRS and CMDS. Second, the FCC carefully chose to base its jurisdiction over CMDS on its authority under Section 303 of the Act – the bit that allows it to impose conditions on radio licenses. This had the appeal of avoiding yet again the question of whether Internet access should be deemed an information service rather than a telecommunications service. However, there are many facilities-based CMDS providers who use unlicensed spectrum. They would appear to be covered by the rule even though the Commission lacks the jurisdictional underpinning necessary to impose the rule on them.   So go figure.

As with so many FCC rulings of late that try to establish a new regulatory paradigm for the Internet Age while using hopelessly outdated service categories, this one promises to keep legions of lawyers toiling for years to come.