FCC decision could affect Verizon-Alltel deal

The agency will not take action on revising roaming laws which allow a carrier to reject a proposal for "piggy-back" carriage, if the requesting carrier already owned spectrum in the same market.

Earlier, US Federal Communications Commission Chairman Kevin Martin had proposed that the rules would be changed to allow smaller carriers that owned such spectrum a period of four years to use it, or choose to give the spectrum back and continue roaming.

However, commissioners could not agree on how best to implement the proposal, and some wanted more time to study it. Some have even suggested that smaller carriers be given even more time to make the switch.

Part of the reason why the rule had become such a hot-button issue was due to the fact that some carriers owned spectrum in markets where they didn't have access to it. In order to serve customers then, roaming agreements were necessary. Under the rules, there was a substantial chance they could be denied.

"Larger carriers can leverage this rule against smaller carriers to either deny them access or charge unreasonable rates, as long as the small carrier has any spectrum rights at all in a given region," Public Knowledge's Jef Pearlman wrote last week.

The back and forth over roaming rules could also delay a decision on Verizon's bid to acquire Alltel. Some are expecting the FCC to not reach a verdict before dealing with the roaming situation first.

Any delay in finding a solution there could also delay the merger. Martin suggested that could be tough, telling Reuters that he sees "a consensus for how the commission ends up addressing it."

Smaller carriers are also bringing up the issue of roaming in their complaints against the deal. Led by Leap Wireless, they are asking the FCC to put a stop to the merger unless rules are implemented that ensure roaming for their customers on the newly combined network.

Verizon has responded to such concerns, telling the FCC last week that it had no intention of terminating Alltel's roaming agreements, and offering to maintain current rates until the close of the deal or two years, whichever is later.

It also added its smaller competitors are attempting to hamstring it by asking for concessions that are required of no other carrier, which could put it at a competitive disadvantage.