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FCC requires national data roaming for all

By David Goldman, staff writer

NEW YORK (CNNMoney) -- The Federal Communications Commission adopted an order on Thursday aimed at ensuring that your smartphone has access to the mobile Internet anywhere that it's available.

The ruling requires all wireless carriers to let customers of competing carriers roam on their mobile data networks.

"The framework we adopt today ... will ensure that rural and urban consumers have the ability they expect to use their mobile phones throughout the nation for voice calls or data," Julius Genachowski, FCC Commissioner, said in his statement of support for the motion.

The FCC's mandate would force companies to arrive at "commercially reasonable terms" for their roaming agreements, but would not itself set fees.

The order is aimed at the biggest providers -- AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) -- and will benefit the smallest, rural carriers. AT&T and Verizon have amassed the largest data networks through incredible capital expenditure and acquisitions. The small, regional carriers need to provide access to 3G and 4G data networks to compete, but they can't afford to build up their own national networks.

The FCC said its order was necessary because the wireless giants have, in many cases, outright refused to negotiate roaming agreements. That means small carriers' customers can be walled off from mobile Internet access outside their home areas -- a problem that Genachowski called "significant."

Verizon and AT&T, the only companies to object to the order, argued that they have acted in good faith with the regional carriers. Verizon's chief policy officer noted that the company has 40 data roaming agreements with other carriers, and AT&T's chief policy officer called such arrangements "plentiful."

But some experts called the large carriers' arguments disingenuous: Since roaming agreements are typically reciprocal, Verizon and AT&T will often make strategic deals to bolster their own coverage by tapping into rivals' data networks in dead areas. If there's nothing in it for them, they won't bother playing ball.

While the two biggest carriers say they've inked lots of partnerships, "there are a number of service providers in the U.S. that have loudly stated otherwise," said Ken Rehben, analyst at Yankee Group. "They've been placed into a position that is not tenable."

A coalition of rural carriers told the FCC that their attempts to enter into data roaming deals with nationwide providers have many times been rejected without the larger carrier even making an offer. Even Sprint (S, Fortune 500), the nation's third-largest carrier, supported the FCC's decision.

While the two dominant players are complaining that the FCC is overstepping its bounds, the ruling is similar to voice roaming requirements the Commission first adopted in 1981. In 2007, the FCC ruled that carriers needed to provide voice roaming automatically, meaning they have to make deals with others providers to carry their customers' traffic. To top of page

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