- UScellular is an important roaming partner for rural carriers and it will soon be part of T-Mobile
- The Rural Wireless Association (RWA) tried to get the FCC to impose roaming conditions on T-Mobile, but the FCC chose not to
- RWA says the loss of UScellular as a reciprocal roaming partner will increase costs for rural carriers, possibly to the point where they go out of business
It’s fair to say some people are upset about the U.S. government’s approval of T-Mobile’s $4.3 billion acquisition of UScellular. Even though UScellular was losing customers, it still provided thousands of jobs and competition in the 21 states where it operates.
But it’s the lack of conditions attached to the government’s approval that is particularly infuriating to the Rural Wireless Association (RWA). RWA said it was downright shocked that the Federal Communications Commission (FCC) “rubber stamped” the deal, pandering to the desires of the merging companies.
The only apparent condition the FCC attached to the deal was FCC Chairman Brendan Carr’s insistence that T-Mobile remove diversity, equity and inclusion (DEI) programs. Overseeing a company’s hiring practices traditionally is not the job of the FCC, but the FCC approved the deal days after T-Mobile said it was axing anything and everything related to DEI.
T-Mobile’s roaming practices
RWA represents rural wireless carriers that serve fewer than 2 million subscribers. One of its big concerns is related to the nature of its members’ roaming agreements. With UScellular, they struck reciprocal roaming agreements, meaning UScellular pays the rural carriers when its customers roam onto their networks and vice versa.
But according to RWA, when T-Mobile has struck roaming agreements with its members, they tend to be unilateral, where a rural carrier’s subscribers can roam onto T-Mobile’s network, but T-Mobile subscribers don’t roam onto the rural carrier’s network. In other words, T-Mobile would rather offer no coverage in these areas than pay the rural carrier for network access.
“The big carriers technically can block their customers from accessing those rural networks, which is an abomination to me,” said Carri Bennet, RWA’s outside general counsel.
Fierce asked T-Mobile about its roaming policies and didn’t hear back.
Indeed, the loss of roaming revenue for the rural operators could be enough to drive them out of business. That’s why RWA asked the FCC to require that T-Mobile offer “fair and reasonable roaming arrangements” to rural carriers with whom UScellular has existing roaming arrangements. But the FCC declined to do that.
In the FCC’s order spelling out its decision, FCC staff said if any service provider encounters problems in obtaining reasonable roaming services or rates, they can file a complaint with the commission pursuant to its established roaming rules.
But that’s not really a viable path forward, according to Bennet. In the past, when RWA members registered complaints with the FCC about roaming, it amounted to a waste of time because they “never got anywhere” with the agency, she said. She’s not optimistic that's going to change anytime soon.
Analyst: Everyone walks away rich
Not everyone is worried about the rural wireless operators. Wireless industry analyst Roger Entner, principal of Recon Analytics, said rural carriers typically have reciprocal roaming agreements with at least one of the three nationwide mobile network operators. “UScellular was never that critical as an outbound roaming partner,” he said.
“If they want to sell, I am sure someone is happy to buy their licenses and give them a pernswitched customer bounty,” he told Fierce. “Most of the owners don’t have a son or daughter who wants to continue the business and when the owners are in their late 50s or 60s, they will become very, very rich and so will their children, their grandchildren and if they play it right their great-grandchildren too. That’s how rural mobile consolidation happens … Everyone walks away very rich.”
Impact of satellite coverage
Besides the consolidation of roaming partners, rural carriers face another big looming challenge: Wireless carriers are increasingly turning to satellite companies to fill in dead spots. T-Mobile will be commercially launching its T-Satellite service with Starlink on July 23, meaning they have fewer reasons to strike roaming deals with smaller terrestrial-based network operators.
“That’s a big question mark I have in my mind. Are they just going to cut the rural carriers out completely, and they’d rather pick a service like Starlink when there’s an available terrestrial network?” Bennet said.
If that’s the intention, then it’s clear that T-Mobile decided to harm competition and eliminate the rural carriers, she said. “Why do they want to do that? Because they want the spectrum.”
As for the UScellular deal, RWA hadn’t decided its next course of action when talking with Fierce this week. Bennet said they would exhaust all avenues at the commission before potentially taking it to court. RWA is also part of a loosely formed coalition that actively sought other conditions on the merger.
They’ll know more after they regroup. “We’ll have to see what the stomach is for everybody to join forces to do an appeal,” she said.