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In affirming the FCC’s Data Roaming Order, the D.C. Circuit rebuffed Verizon’s efforts to squash any obligation to enter into roaming agreements with competing wireless carriers. In Cellco Partnership v. FCC, No. 11-1135 (D.C. Cir. Dec. 4, 2012) (“Cellco”), the court found that the Commission had ample authority under Title III to adopt its data roaming rules.

Cellco expands the Commission’s authority under Title III to regulate wireless carriers as these carriers transition to all-IP, data-only services providers. Despite Verizon Wireless’s opposing view, the Data Roaming Order aligns the United States with the rest of the world as data roaming is seen as an impetus for growth in the mobile data services market.

Cellco re-affirms the Chevron deference accorded to the Commission not only in selecting among reasonable policy options, but in determining the agency’s jurisdiction subject to the Supreme Court’s decision in City of Arlington v. FCCChevron deference encourages interested parties to participate in Commission proceedings, although the challenge of securing Commission action in a timely manner remains.

Assuming 2nd tier wireless carriers, such as regional and specialized carriers, secure access to sophisticated smart phones and tablets, data roaming arrangements will support these carriers’ efforts to offer compelling service offerings and maintain sustainable businesses.  The caveat is that the Data Roaming Order obligates the major wireless carriers to offer these arrangements on “commercially reasonable terms and conditions,” consistent with the principles governing private carrier arrangements, as opposed to Title II-based “just and reasonable” terms and conditions.  As a result, the FCC has limited authority to influence the terms and conditions of data roaming arrangements.

Cellco ensures the relevance of the FCC’s spectrum holdings proceeding. Limitations on spectrum holdings, however structured, have modest relevance and impact if only 3 or 4 potential services providers are in the market.

Congress wins, as well. TV Broadcast license incentive auctions may now elicit something approaching the optimistic bids Congress assumed. Smaller wireless carriers will have an opportunity to offer data services beyond the limited footprints of local television broadcast channels, particularly those of TV stations located in 2nd tier and 3rd tier markets.