WASHINGTON-Are wireless carriers common carriers, and if they are, can they negotiate with their customers? This was the question before a federal appeals court Tuesday, and the answer could have dramatic consequences for the wireless industry.
Jacqueline Orloff, a Cleveland-area subscriber of Verizon Wireless, sued Verizon Wireless after she found out that another customer had gotten better concessions, which she claims is illegal because Verizon Wireless is a common carrier.
While Orloff’s attorney, Randy Hart, has applied for class-action status for the lawsuit, the Ohio legal action was put on hold when the Federal Communications Commission was asked to decide the issue. To Hart and Orloff’s dismay, the FCC agreed with Verizon Wireless that in a competitive market different consumers can and should get different rates, terms and conditions. Now Hart and Orloff are asking the U.S. Court of Appeals for the District of Columbia Circuit to decide the responsibilities of a common carrier.
If the D.C. Circuit agrees with Hart and Orloff and rejects the FCC/Verizon Wireless view, the current way business is done in the wireless world would change because all rates, terms and conditions would have to be available to all customers.
The wireless industry probably doesn’t need to start re-writing its sales manuals just yet, however, because it appeared that at least one judge seemed to side with the FCC and Verizon Wireless.
“At some point, she found out she could get two concessions,” said Judge David Sentelle, to demonstrate his point that Orloff took advantage of a competitive market.
Hart also seemed to dig himself into a hole before the panel when he said that airlines, as common carriers, could not offer special deals to people. This drew hoots from all three panelists.
Ironically, the issue that seemed to pose the most problems for the FCC was whether it could claim that the Cleveland market is truly competitive because wireless local number portability has not been implemented.
“That is a structural issue that has impeded full competition, but we are about to take care of that impediment,” said Richard Welch, arguing on behalf of the FCC.
Judge A. Raymond Randolph also questioned Kathleen Trafford, who argued for Verizon, about the competitiveness given the lack of WLNP.
“The fact that Verizon Wireless would fight even before there was WLNP is a positive,” said Trafford.
In an unrelated development, the FCC shortly after the D.C. Circuit oral argument issued rules regarding wireless-to-wireless porting.
