Verizon Makes Another Peace Offering
Verizon Wireless this week again offered a proposal aimed at averting regulatory changes-with a similar response from rival carriers and other groups. Verizon said it would be willing to compromise on roaming service agreements with smaller wireless operators.
Carriers currently aren't required to provide roaming services to other operators in areas where competitors own wireless spectrum but have yet to build out a network. Smaller carriers have complained this limits service for their customers and puts them at a competitive disadvantage.
Verizon said in a letter to Rep. Harry Waxman (D-Calif.), chairman of the House Energy and Commerce Committee, that it would support new legislation to provide rivals with roaming services in regions where it's not currently obliged to, provided the requirement only lasts two years.
Regional carrier Leap Wireless in a written response called on Congress and the Federal Communications Commission to reject Verizon's proposal, saying the telecom giant had relied on roaming agreement for two decades as it built out its network, "but now has unilaterally decided that its remaining competitors are only entitled to roaming for two or three years."
Verizon's preemptive step on roaming rules comes a week after it offered to limit new exclusive handset deals to six months for smaller carriers. The telecom industry has come under growing regulatory scrutiny in recent months from Congress, the FCC, and reportedly, the Department of Justice for anticompetitive practices.
The Rural Cellular Association, which includes about 100 small and medium-sized carriers and had complained to the FCC about exclusivity agreements, said the Verizon offer last week was encouraging but inadequate. Digital rights advocacy group Public Knowledge this week called both proposals by Verizon, on roaming and exclusivity, "hollow offers" that amount to a version of "corporate charity."
How Congress or other federal regulators view Verizon's efforts to forestall unwanted changes isn't as clear. But they're not likely to be sufficient to dispel lawmakers' concerns about unfair practices in the wireless industry. And with Verizon Wireless today touting it added 1.1 million subscribers in the second quarter -- ahead of its earnings report Monday -- the carrier can't complain its business is suffering.