Court rejects Verizon's challenge to FCC's data roaming regulations

A federal court rejected Verizon's challenge to the Federal Communications Commission's data roaming rules on Tuesday, an important victory for the commission as it looks to fend off a series of lawsuits that would curb its regulatory power over Internet services.

In a unanimous decision, a three-judge panel of the Court of Appeals for the District of Columbia Circuit said that the data roaming requirements fall under the FCC's "broad authority" to manage the airwaves.

The same court is currently reviewing Verizon's separate challenge to the FCC's controversial net-neutrality rules, which bar Internet service providers from slowing down or blocking websites. Supporters of the net-neutrality rules say they are critical for ensuring an open and vibrant Internet, but critics consider them an illegal power grab.

The D.C. Circuit has already ruled against a previous attempt by the FCC to enforce the principle of net neutrality, and many legal analysts consider the court hostile to expansive views of the FCC's authority over the Internet. But Tuesday's ruling could make the commission more optimistic that its net-neutrality rules, a signature achievement of Chairman Julius Genachowski's tenure, will survive.

The commission has long required that cellphone service providers offer reasonable voice roaming terms to their competitors. Roaming occurs when subscribers travel beyond their own carrier's network and use another company's cell towers to complete a call.

The commission adopted an order last year that expanded those roaming rules to cover wireless Internet service.

Verizon sued, claiming that the FCC overstepped its authority under the Communications Act. Verizon said the rules represented an "unprecedented and unbounded theory of regulatory power over wireless Internet service."

But the court ruled that Title III of the Communications Act "plainly empowers" the FCC to expand its roaming rules to cover data. The court also rejected Verizon's claim that the rules treat cellphone carriers as "common carriers," which is prohibited under the Communications Act.

Verizon had argued that the regulations were "arbitrary and capricious," but the court concluded that "the Commission performed a thoughtful and nuanced balance of the costs and benefits of the data roaming rule."

Genachowski praised the decision, saying it confirms the "commission's authority to promote broadband competition and protect broadband consumers." 

"Our rules have empowered consumers and expanded their ability to enjoy the benefits of seamless and nationwide access to mobile data services, including wireless Internet and e-mail," he said in a statement. "Enacting data roaming rules is one of many strong actions the FCC has taken in this area, and we will continue to promote broadband investment and innovation.”

In a statement, John Bergmayer, a senior staff attorney for consumer advocacy group Public Knowledge, noted that Verizon made similar legal arguments in the data roaming case as it did in its challenge to the net-neutrality rules.

"This decision may indicate that courts are casting a more skeptical eye on telecommunications companies' endless challenges to the FCC's ability to carry out its job," he said.

Verizon did not comment on the decision.

Rep. Henry Waxman (D-Calif.), the ranking Democrat on the Energy and Commerce Committee, said the decision is "a victory for the American consumer’s ability to access the wonders of mobile technology, no matter what wireless carrier they choose.”

Rep. Anna Eshoo (D-Calif.), the top Democrat on the Communications and Technology subcommittee, also applauded the ruling, saying the data roaming rules "promote competition and the seamless availability of wireless services consumers have come to expect."

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