Second-Tier Telecoms Tired of Playing Second Fiddle

Dan Radovsky, The Motley Fool
Updated

MetroPCS (NYS: PCS) , U.S. Cellular (NYS: USM) , and a host of other small wireless carriers and associations, including NTELOS Holdings and the Rural Cellular Association, have filed a complaint with the Federal Communications Commission urging the agency to put an end to delaying tactics that the major wireless carriers have employed to avoid negotiating data roaming agreements.

Last April, the FCC approved rules to require wireless carriers to make data roaming available on "commercially reasonable" terms. This ruling was made to settle a dispute regarding the larger carriers who were against providing data roaming on equal terms with voice roaming.

"What good is that smartphone if it can't be used when that subscriber is roaming across the country, or across the county?" FCC Commissioner Michael Copps asked at the time.

The day after that ruling, Verizon (NYS: VZ) and AT&T (NYS: T) both argued against it and in May, Verizon filed suit to void the automatic data roaming rules. Verizon stated that the FCC had exceeded its statutory authority by making arbitrary and capricious rules.

Apparently, to put off complying with the implementation of the data roaming rules as long as possible, the larger carriers had been drawing out the negotiations of any agreements. In the latest filing, the smaller carriers ask the FCC to light a fire under Verizon and AT&T.

"Supporters stressed that imposing a shot clock on such negotiations is necessary to provide the proper incentive for potential roaming partners to timely respond to inquiries," the filing stated. This was, the filing continued, "to incent the larger carriers to engage in good faith negotiations in a reasonable time frame."

Just add data roaming to the other issues of limited spectrum availability, debt from capital expenditures on high-speed networks, and smartphone subsidies, and it makes the road look pretty bumpy ahead for the small carriers. Deeper pockets for legal fees and lobbying may carry the day for the majors here.

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At the time thisarticle was published Fool contributorDan Radovskyowns shares of AT&T. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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