FCC rules for open networks in USA

08 April 2011 | Kavit Majithia


The Federal Communications Commission ruled on Thursday that USA’s two largest telcos, AT&T and Verizon Wireless must open their networks to allow smaller players to offer nationwide mobile data and internet services.

According to the Financial Times, FCC’s latest ruling was immediately condemned by both AT&T and Verizon, with AT&T claiming it represents a new level of unwarranted government intervention.

Data roaming agreements between the country’s largest telcos and smaller players had until now been voluntary - with Verizon claiming it has already entered into over 40 data roaming agreements with its competitors, which was only set to increase by expanding the reach of 4G services to rural areas.

This latest ruling extends existing network sharing agreements for voice and data traffic. Many second tier and rural mobile operators across the US have been lobbying for mandatory open mobile and internet networks to allow increased competition.

"AT&T and Verizon understandably see the networks they have built as a source of competitive differentiation and don't simply want to give that up at wholesale rates to competitors which have not made the same investments," says Jan Dawson, chief telecoms analyst at Ovum. "This pressure will only become more acute as 4G networks are rolled out and smaller carriers risk falling even further behind."

The announcement comes at the same time the FCC and justice department is reviewing AT&T’s proposed $39 billion acquisition of T-Mobile USA, which has come under scrutiny from a range of industry experts. Only last week Sprint Nextel, US’s third largest operator, condemned to proposed acquisition. FCC’s latest ruling is expected to prove positive for the company.