D.C. Circuit Defense of Mobile Data Roaming Rules
On January 9, 2012, the Federal Communications Commission (FCC) and the United States Department of Justice filed their Brief for Respondents in the U.S. Court of Appeals for the District of Columbia Circuit in Cellco Partnership d/b/a Verizon Wireless v. FCC & USA (Nos. 11-1135 and 11-1136). The brief defends the FCC's Second Report and Order, 26 FCC Rcd 5411 (2011), which established data roaming obligations for facilities-based commercial mobile data service providers.
The underlying order requires facilities-based commercial mobile data providers to offer to negotiate individualized data roaming arrangements with other providers on commercially reasonable terms and conditions. In its brief, the government asked the court to dismiss Verizon's appeal under 47 U.S.C. Section 402(b) for lack of jurisdiction and to deny its petition for review under 47 U.S.C. Section 402(a).
- Case Name: Cellco Partnership d/b/a Verizon Wireless v. FCC and USA (D.C. Cir. Nos. 11-1135 & 11-1136)
- Underlying Ruling: Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of Mobile Data Services, Second Report and Order, 26 FCC Rcd 5411 (2011)
- Filing Date: January 9, 2012
- Participating Agencies: Federal Communications Commission (Office of General Counsel) and U.S. Department of Justice (Antitrust Division)
Rebuttal of Common Carrier Claims Under Title II and Section 332
A central argument in Verizon's petition is that the data roaming rule imposes common-carrier obligations on non-common carrier services in violation of 47 U.S.C. Sections 153(51) and 332(c)(2). In response, the FCC and DOJ argued that the rule does not require host providers to serve all comers indifferently on standardized terms, which remains the core hallmark of common carriage.
The brief emphasized that the order permits host carriers to engage in case-by-case negotiations tailored to individualized circumstances. Host providers may negotiate different terms, conditions, and prices based on commercial reasonableness and retain the ability to protect network capacity, deny requests for technical incompatibility, or decline requests where roaming is technically or economically infeasible.
- The FCC distinguished the data roaming rule from interconnected voice roaming under 47 C.F.R. Section 20.12(d), which applies common carriage standards under Sections 201 and 202 of the Communications Act.
- The data roaming rule does not include a presumption of reasonableness for roaming requests, nor does it establish tariffing or statutory damages remedies under Sections 208 and 209.
- The standard of commercial reasonableness allows providers substantial flexibility without compelling indiscriminate service to all comers.
Title III Spectrum Authority and Section 706 Support
The FCC asserted that Title III of the Communications Act provides broad statutory authority to manage spectrum and impose conditions on licenses to advance the public interest, convenience, and necessity. The brief cited Sections 301, 303(b), 303(g), 303(r), 309, and 316, noting that the Commission's authority extends beyond technical interference policing to include license modifications that foster the larger and more effective use of radio spectrum.
The brief also cited Section 706 of the Telecommunications Act of 1996 (47 U.S.C. Section 1302) as independent authority. The Commission determined that data roaming accelerates nationwide broadband deployment and infrastructure investment by enabling new entrants and regional carriers to provide competitive nationwide service while building out facilities.
- Title III grants broad authority to modify existing licenses by rulemaking under 47 U.S.C. Section 316 to serve the public interest.
- Section 706(a) and (b) direct the FCC to remove barriers to infrastructure investment and promote competition in telecommunications markets.
- Because Section 706 is not part of Title 47 Chapter 5 (the Communications Act of 1934), it is independent of the common carriage prohibitions in Sections 153(51) and 332(c)(2).
Rejection of Takings and Arbitrary-and-Capricious Arguments
The brief rejected Verizon's argument under the Fifth Amendment that the rule amounts to a per se physical taking of network capacity. Citing judicial precedent, the FCC and DOJ maintained that electronic signal transmissions do not constitute permanent physical occupations of property. Furthermore, the requirement that host carriers receive commercially reasonable compensation precludes unconstitutional regulatory takings claims.
Addressing Verizon's Administrative Procedure Act arguments, the government stated that the FCC's predictive judgments regarding competition and investment were well supported by record evidence. The record demonstrated that smaller and regional carriers faced significant difficulties obtaining data roaming arrangements on advanced 3G networks from nationwide incumbents in the absence of regulatory requirements.
- Electronic signal transport requirements do not constitute per se physical takings under Bell Atlantic Tel. Cos. v. FCC.
- Commercially reasonable rates ensure host providers receive just compensation for network access.
- The FCC reasonably concluded that voluntary market negotiations were insufficient to ensure seamless nationwide mobile broadband access.