December 5, 2012

Appeals Court Rejects Verizon Data-Roaming Challenge

Yesterday, the U.S. Court of Appeals for the District of Columbia Circuit upheld the April 2011 Federal Communication Commission (FCC) data-roaming order that required wireless carriers to offer all flavors of data-roaming services to other carriers on "commercially reasonable terms," thus rejecting Verizon's legal challenge. The three judges agreed with the commission that data-roaming requirements are included in the agency’s airwave-management purview.

Wrote Circuit Judge David S. Tatel, “Cellco Partnership, more commonly known as Verizon, challenges the ‘data roaming rule’ on multiple grounds. Most significantly, Verizon argues that the commission lacks statutory authority to issue the rule and that the rule unlawfully treats mobile-internet providers as common carriers. We disagree on both counts.”

He continued, “Title III of the Communications Act of 1934 plainly empowers the commission to promulgate the data roaming rule. And although the rule bears some marks of common carriage, we defer to the commission’s determination that the rule imposes no common carrier obligations on mobile-internet providers. In response to Verizon’s remaining arguments, we conclude that the rule does not effect an unconstitutional taking and is neither arbitrary nor capricious. We therefore reject Verizon’s challenge to the data-roaming rule.”

Noted FCC Chairman Julius Genachowski, “This unanimous decision confirms the FCC's authority to promote broadband competition and protect broadband consumers. Our rules have empowered consumers and expanded their ability to enjoy the benefits of seamless and nationwide access to mobile data services, including wireless Internet and e-mail. Enacting data roaming rules is one of many strong actions the FCC has taken in this area, and we will continue to promote broadband investment and innovation.”

“The three-judge panel's ruling represents a positive outcome for Sprint, T-Mobile USA, MetroPCS Communications, Leap Wireless, US Cellular and rural wireless carriers, especially in their efforts to remain viable and relevant in the evolving 4G LTE market,” says Jeffrey Silva, senior policy director/Telecommunications, Media and Technology at Washington, D.C.-based Medley Global Advisors LLC.

Whether Verizon will appeal this decision to the Supreme Court is unknown at this time. As reported in the Chicago Tribune, a Verizon Wireless spokesman said the carrier “regularly enters into ... data roaming agreements on commercially reasonable terms to meet the needs of consumers, and will continue to do so.”

— Debra Baker