WASHINGTON-The Federal Communications Commission today agreed to investigate mobile termination fees charged by foreign wireless carriers and their impact on American consumers, despite past opposition from domestic and overseas wireless firms and uncertainty about the U.S. legal authority to intervene.
FCC officials stressed the inquiry represents a fact-finding mission that may not lead to further regulatory action.
“It would be great if the market resolves it itself,” said Commissioner Jonathan Adelstein.
While framed in terms of consumerism and competition, the foreign mobile-phone termination fee issue has all the makings of a hot-button political issue for the United States and its trading partners. The issue has been raised by the FCC, State Department and other administration officials in discussions with their counterparts overseas.
Several commissioners pointed out that foreign regulators have pushed down mobile termination rates, which overseas wireless carriers charge and are passed on to U.S. consumers who make international calls.
The FCC said developing a more complete record will help it understand whether sufficient progress is being made to lower foreign mobile termination rates or whether the United States needs to flex its muscle as it has done in international landline telecom disputes
“In recent years, the FCC has successfully lowered the cost to U.S. consumers of international calls completed on landline telephone networks abroad,” the agency said. “As such, U.S. long-distance giants AT&T Corp. and MCI WorldCom Inc., as well as the United Kingdom’s Cable & Wireless plc and others, claim foreign mobile termination fees could be reduced if a similar regulatory framework were applied to international traffic terminated on mobile-phone networks.”
The wireless industry had measured response to the FCC inquiry.
“The FCC’s inquiry is properly focusing on gathering data in order to examine whether there is a problem with foreign mobile termination rates that could have an adverse effect on U.S. consumers or on competition in the U.S. telecommunications market,” said the Cellular Telecommunications & Internet Association. “CTIA appreciates the commissioners’ recognition that this is an issue that requires close coordination with foreign regulators, who have been closely examining this issue in the context of their calling-party-pays regimes.”
In recent years, the U.S. long-distance industry has pressed U.S. telecom and trade officials to address high foreign mobile-phone termination fees.
“AT&T commends today’s FCC decision to examine foreign mobile termination rates. The FCC has appropriately given priority to this important issue that threatens to undo a long history of effective pro-consumer, pro-competition international rate policies,” said Len Cali, director of federal government affairs at AT&T Corp.
“For too long,” said Cali, “American consumers have been forced to subsidize cellular services provided by foreign carriers to consumers overseas. We are committed to working with the FCC toward a prompt conclusion of this proceeding and movement without delay to a rulemaking proceeding that will end the subsidy of foreign carriers.”
The FCC, among other things, will scrutinize charges levied by long-distance carriers who carry U.S. calls ultimately completed on mobile-phone networks in other countries.
In addition, the FCC probe seeks comment on foreign mobile termination payment arrangements and on payment flows between carriers that terminate mobile calls in certain foreign countries. The agency also wants data and information on foreign mobile termination rates; on the actions taken by foreign regulators with respect to these rates; and on competitive concerns previously raised in a related FCC proceeding.
Telecom regulators said they would like input on the appropriate framework for evaluating whether foreign mobile termination rates are unreasonably high.
