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Court slaps down Verizon, upholds FCC data roaming rule

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A US federal appeals court has unanimously upheld a Federal Communications Commission (FCC) rule that required wireless carriers to offer roaming data service at "reasonable" rates, rejecting a challenge by leading mobile telco Verizon Wireless.

The FCC has long required carriers to offer roaming for voice calls, which allows customers to use dial from other carriers' mobile networks when they are away from their own carrier's service area, but in April 2011 it expanded the rule to include data service.

That move drew the ire of Verizon, which filed suit to block the amended rule a month later, describing it as "unwarranted government intervention" and claiming the FCC lacked the authority to impose such a restriction on carriers.

On Tuesday, the appeals court rejected that argument, with three judges affirming the FCC's authority to issue the rule in a unanimous decision.

In a statement emailed to Reuters, Verizon spokesman Ed McFadden explained that the carrier felt the ruling was unnecessary and that Verizon was perfectly capable of negotiating data roaming agreements on its own.

"As we made clear throughout the case, Verizon Wireless regularly enters into ... data roaming agreements on commercially reasonable terms to meet the needs of consumers, and will continue to do so," McFadden said.

Joining Verizon in opposing the rule was AT&T, the second-largest US carrier. Between the two of them, AT&T and Verizon control around 65 per cent of the US wireless market.

But smaller carriers tended to support the data roaming rule, particularly those serving far-flung rural areas. In November, the Rural Telecommunications Group and the National Telecommunications Cooperative Association sent a joint letter to the FCC urging stricter enforcement of the rule, citing what they described as "anticompetitive behavior at the hands of AT&T and/or Verizon Wireless."

According to the letter, some rural carriers have been forced to wait more than eight months to receive a proposal for a data-roaming rate from the Big Two carriers, and in many cases the rate offered ends up being "many orders of magnitude higher" than that offered to the carriers' own customers.

For its part, the FCC says it welcomes the court's decision and that it will continue to take actions that it feels will help to "promote broadband investment and innovation."

As for Verizon's ongoing objections to the rule, the court was clearly not impressed.

"Verizon may choose not to provide mobile-Internet service," Judge David Tatel wrote in the unanimous decision. "The data roaming rule merely defines the form mobile-Internet service must take for those who seek a license to offer it." ®

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