Sprint Could Be Stranded under Proposed Revision to in-Market Exception
The FCC seems likely to revise automatic roaming rules to address complaints about the “in-market” exception, industry sources said Thursday. But a new issue has emerged -- whether the FCC will lift an exception for all spectrum, rather than only licenses bought in 2006’s advanced wireless service auction and in this year’s 700 MHz auction. A decision by the agency not to include markets covered by PCS licenses would be a blow to Sprint Nextel, which has pushed for a rule change but was not active in the AWS-1 or 700 MHz auctions.
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Under the in-market exclusion, a last-minute addition to roaming rules approved last summer (CD Aug 8/07 p1), a carrier need not honor a request by a counterpart with spectrum in a market, even if the counterpart’s spectrum isn’t cleared to allow network buildout. Sprint, Leap Wireless, MetroPCS, SpectrumCo and T-Mobile filed petitions for reconsideration at the FCC asking it to revise its rules. In recent weeks wireless carriers have asked Congress to weigh in at the FCC (CD July 3 p1).
FCC Chairman Kevin Martin told reporters last week that he is “sympathetic” to concerns of carriers struggling to gain access to spectrum, declaring the agency likely would act soon on petitions for reconsideration. But Martin also said the exception reflects FCC desire for carriers to build out spectrum bought at auction.
Carriers concerned about the in market exception are “close to winning a small victory at the FCC” over the loophole, Medley Global Advisors said in a research report. “The FCC is now preparing to adopt a new order for sometime in August that will close this loophole for carriers who won licenses in the AWS-1 auction,” MGA said. “It is not yet clear whether the FCC will also extend the new roaming requirements on incumbents to include the vast amounts of PCS licenses owned by Leap, MetroPCS, Sprint and T-Mobile or licenses won in the recent 700 MHz auction.”
Industry officials worry that some carriers may be left out, they said. Other carriers see customers benefiting from roaming agreements in some, but not other markets, depending on whether a spectrum license was obtained in the AWS auction or another auction.
“How does a company communicate its national roaming coverage to consumers if the commission distinguishes roaming rights and obligations by type of license?” a carrier source said. “Most consumers still don’t understand the difference between GSM and CDMA and find it hard to accept why a T-Mobile phone won’t work on the Cricket network.” MetroPCS said in a written statement that “the need for automatic roaming extends to all bands and the Commission should not limit any action on this matter to only the AWS-1 band.”
“Rural Cellular Association would be disappointed if the FCC were to limit relief from the ‘in-market’ exception to spectrum purchased in the AWS-1 auction,” said David Nace, counsel to the group. “While there is certainly a need for relief as to the AWS-1 spectrum, the carriers that purchased 700 MHz spectrum in the recently completed auction are no less in need of relief from the in-market exception considering that the DTV transition is still six months away and it will take time to construct facilities once that spectrum becomes available to the licensees.”