The Wireless Blog

Most of the attention this week (and probably for weeks to come) is on Apple’s new 3G iPhone. But there is another issue brewing in the wireless industry that is important to the future of this industry.

It has to do with a matter before the FCC and affects both large and small wireless carriers. The way the rules are currently structured, a big carrier doesn’t need to provide automatic roaming to another smaller carrier if that smaller carrier holds a wireless license or spectrum usage rights in the same geographic location as the bigger carrier. The reasoning: Such a requirement doesn’t serve the public interest of encouraging facilities-based services.

I browsed through the FCC docket (05-265, for those interested) on this, and I have yet to see a really good argument as to why larger carriers shouldn’t allow the smaller ones to roam on their networks in these types of situations. Of course, the larger carriers don’t want the smaller ones to "piggy back" on their investments, and they like the ability to boast about their competitive advantage in the form of superior coverage. That sounds reasonable. But roaming has been a basic mode of business for many years in the wireless industry, and it doesn’t sound unreasonable for the bigger guys to get some roaming revenue from the smaller ones that can’t immediately build out every one of their markets in the blink of an eye.

It’s been a source of pride for the wireless industry to say a lot of carriers besides the Big Four (or Big Two, depending on how you look at it) are offering services and keeping the industry competitive. Well, not so much any more, as consolidation has taken care of that. Still, companies like Cricket/Leap Wireless International, which along with partner Denali Spectrum picked up 100 licenses in the AWS auction, aren’t able to offer customers roaming services in some areas because it can’t get an agreement with another CDMA carrier. While Leap is making progress in its build-outs, it is going to take some time before it’s able to build out all those markets.

Cricket and others want the FCC to reconsider the order, but there’s no timeframe and hence, a lot of frustration. As we all know, things can languish at the FCC indefinitely. Cricket hopes the FCC will act on the petition for reconsideration before Alltel’s merger into Verizon Wireless gets the green light. "We’re not asking the commission to regulate the rates that our competitors charge," said Laurie Itkin, director of Government Affairs for Cricket.

Houston is a big market for Leap, but Cricket customers driving outside Houston aren’t guaranteed to have service. They can make 911 calls, which latch onto the strongest signal, but that’s it. And that’s a problem. Cricket can do all it can to let customers know where to expect coverage, but you can imagine the customer confusion and frustration that’s going on regardless of how hard sales associates try to explain the situation.

Many folks will remember that Cricket launched services over nine years ago with the mantra that "local" is where it’s at – people who use its services are going to stick to their local areas and not go roaming about. But the world has changed a lot since then, and the company no longer touts that message. Nationwide roaming became part of the basic package that people have come to expect.

It’s an urgent matter for a carrier like Cricket. Even if Leap eventually merges with MetroPCS, they’re still going to have roaming issues. It would be sad to see some of these regional players disappear just because the industry couldn’t work it out. Maybe the industry will end up with just two or three strong nationwide players and some MVNOs, the latter of which don’t run their own facilities-based networks. That would be a shame.