This week, the US Court of Appeals for the District of Columbia Circuit upheld the Federal Communications Commission’s (“FCC”) rule requiring wireless providers to make available data roaming agreements to other providers. The Court rejected Verizon’s arguments that the FCC does not have authority under Title III of the Communications Act to promulgate the rule and that the rule improperly treats mobile data providers, which the FCC conceded are information services providers, as common carriers. The Court found that, contrary to Verizon’s claims, the FCC did not rely solely on its authority to act in the public interest, but instead expressly relied on specific delegations of authority in Title III, including its authority to prescribe the nature of service rendered by a licensee or prescribe restrictions or conditions on a licensee and to do so through a rulemaking. Therefore, the Court concluded the data roaming rule falls well within the FCC’s Title III authority.
Regarding Verizon’s common carrier argument, the Court found that, while the rule bears some marks of common carriage, it imposes obligations that differ materially from the kinds of requirements that could be considered common carriage. Thus, according to the Court, the data roaming rule falls into a gray area between per se common carriage and per se private carriage where the FCC’s determination warrants more deference. The Court went on to find that the data roaming rule leaves substantial room for individualized bargaining and discrimination in terms, hallmark indicators of private carriage, rather than requiring providers to hold themselves out to serve all comers indiscriminately. Therefore, the Court held that the rule did not, on its face, treat mobile-data providers as common carriers.
In addition to upholding the data roaming requirements, this decision is notable in that it addressed many of the legal arguments Verizon raised in its appeal of the FCC’s Open Internet Rules. As a result, it could signal a strengthening of the FCC’s ability to exercise authority over Internet services. We recommend clients continue to monitor these developments as the FCC is considering a number of rulemaking proceedings that could affect the regulatory treatment of Internet services. Clients with questions regarding these matters should contact the attorney assigned to their account.