The Federal Communications Commission has urged the D.C. Circuit to reject a telecom’s claims that the commission allowed Verizon to charge excessive roaming rates, forcing smaller competitors out of the market, following the FCC’s rejection of the telecom’s request to cap rates among carriers.
Texas-based regional carrier Flat Wireless LLC, in a nearly four-year dispute with the FCC, claims the commission’s policy of leaving roaming rates to the market allows the largest telecoms to use their market dominance to set unreasonably high roaming rates — the fees carriers charge each other for customers to use their networks when out of range. After failing to negotiate lower rates from the phone giant, Flat Wireless appealed to the FCC, and after losing there, sought relief from the D.C. Circuit in September.
The agency said in a brief Friday that the FCC “made clear” in adopting its rules on roaming charges that it would allow roaming rates “to be determined in the marketplace” by talks between carriers, subject to legal requirements for reasonableness and nondiscrimination.
The FCC on Friday said it would consider reviewing any complaints stemming from agreements between carriers, but that Verizon’s rates were in line with what other competitors were being charged.
“For both voice and data rates, the rates Verizon had offered to Flat Wireless were well within the range of comparable rates offered to other carriers,” the FCC said. “Flat Wireless’s real complaint is that the commission should have based its regulation of roaming rates on the carriers’ or providers’ costs. But there is no basis for that argument.”
According to court records, Flat Wireless and Verizon negotiated a voice roaming agreement in 2011, but in early 2015, the regional carrier sought a new agreement with substantially lower voice roaming rates and, for the first time, data roaming.
The talks fell apart after two months, and in June 2015, Flat Wireless filed the administrative complaint, saying nationwide carriers had been increasingly reluctant to make roaming available to other carriers on just, reasonable, and not unreasonably discriminatory terms.
Although the FCC said it required carriers to negotiate, it declined to impose a price cap or any other form of rate regulation on the fees carriers pay each other for roaming.
The agency “kept its focus on consumers,” finding that “any harm to consumers in the absence of affirmative [rate] regulation … is speculative” and that, with the duties it was imposing, “consumers are protected from being harmed by the level and structure of roaming rates negotiated between carriers,” the FCC said. The agency also cited potential disincentives from rate regulation.