At the same time one U.S. Senate committee today holds a hearing on President Barack Obama’s nomination of Julius Genachowski as FCC chairman, another committee will be taking on the issue of competition in wireless.
Among the witnesses scheduled to testify today before the U.S. Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy & Consumer Rights is Laurie Itkin, director of government affairs for Cricket Communications, the subsidiary of Leap Wireless International.
Others on the witness list include Randal Milch, executive vice president and general counsel at Verizon Communications, and Wayne Watts, senior executive vice president and general counsel for AT&T Management Services.
Cricket has a beef with AT&T and Verizon Wireless – especially fellow CDMA carrier Verizon – when it comes to roaming. There’s an “in-market” exception to roaming whereby carriers like AT&T and Verizon can refuse roaming to another carrier where that requesting carrier holds a wireless license or spectrum usage rights. While Cricket has been acquiring licenses, it hasn’t had time to build out all of its markets lickety-split.
Verizon and AT&T argue that automatic roaming would encourage smaller carriers to “free ride” off their networks, a situation that Cricket disputes. “It is self-serving for these two carriers to argue that Cricket and other small and mid-sized carriers must build facilities reaching every corner of their licensed areas when they themselves still have not built out significant portions of their own networks even though they have had more than 20 years to do so and received their original licenses for free,” Itkin says in written testimony for the subcommittee.
Cricket was one of the lead opponents to Verizon Wireless’ acquisition of Alltel because Cricket relied on Alltel for about 25 percent of its roaming traffic and feared that if Verizon acquired Alltel, it would impose anti-competitive restrictions on the old Alltel territory. Itkin says that’s precisely what’s happening.
The fight over in-market roaming has been going on for some time. The FCC put roaming conditions on Verizon’s acquisition of Alltel, but Cricket asserts Verizon has attempted to circumvent the conditions. Consolidation in the industry means a few carriers have even greater incentive and ability to adopt anti-competitive practices that harm consumers in the long run, Cricket says.
This past May, part of Verizon Wireless’ testimony to a U.S. House of Representatives subcommittee included the in-market roaming provision. In that testimony, Verizon Wireless said Congress and the FCC should not mandate home roaming or expand it to include all data services.
Verizon argues that regulation requiring carriers to offer in-market roaming would hinder carriers’ ability to differentiate themselves on the basis of superior coverage in home markets, remove incentives to build out networks more rapidly and would conflict with the Administration’s goal of incenting carriers to build out broadband in rural areas.
In summary, Verizon said if the commission were to adopt mandatory home roaming, firms would lose the ability to compete on the basis of network coverage and quality and low-cost providers would have less incentive to invest in their networks beyond what is required by the FCC. In other words, much of “the network” advertising would be for naught.