Verizon Must Share Data Networks with Rivals: Court

A federal court has ruled that major cellphone carriers must let their smaller rivals use their data networks. This could mean more competitive deals and better coverage for smartphone and tablet owners, as well as those accessing mobile broadband on a laptop.

The United States Court of Appeals has rejected a challenge by Verizon, thereby upholding an earlier ruling by the Federal Communications Commission (FCC).

The original ruling primarily covered data roaming, the technique by which customers of one cellphone carrier access the data services of another carrier.

The FCC had said that cellphone firms must give rivals access to their data networks on "commercially reasonable terms." In essence, they can't refuse another company access or charge unfairly high fees.

New Rules: More Competition, Better Coverage

Supporters of these rules say they help customers in two ways. First, they enhance competition because different companies can offer data plans at differing prices. They can also compete by offering better customer service or higher monthly usage limits.

Second, allowing smaller companies to access larger networks increases the number of cellphone firms that can offer widespread service nationwide. That makes more companies attractive to people who travel a lot, such as business users.

The rules also cover 3G and 4G tablet devices, including the iPad and Microsoft Surface, as well as mobile broadband "dongles" that plug into computers and allow them to use cell phone towers for Internet connection.

That could mean some users now have more options when choosing a broadband source for their home computer. However, high costs and restrictive monthly usage limits will likely make most mobile offerings unattractive for many people.

Verizon Challenged FCC's Powers, Lost

Verizon had challenged these rules on two grounds. First, it said a government agency forcing it to enter commercial agreements with rival firms was acting unfairly.

It also argued that cellphone firms offering mobile data should be treated as Internet Service Providers (ISPs). If that idea took hold, then Verizon, as an ISP, would fall outside the FCC's control. (Source: bloomberg.com)

The three judges in the appeal hearing unanimously rejected both of Verizon's arguments. They said the laws establishing the FCC explicitly give it the power to regulate competition in the smartphone market.

The judges also said Verizon's argument that it should be regulated like an Internet provider was invalid. They noted the FCC ruling specifically did not apply to any company that provided Internet only without voice or other cellphone services. (Source: publicknowledge.org)