Worldcall Interconnect, Inc. v. Fed. Commc'ns Comm'n

• Decision Date: 24 October 2018
• Docket Number: No. 17-60736,17-60736
• Citation: 907 F.3d 810
• Parties: WORLDCALL INTERCONNECT, INCORPORATED, also known as Evolve Broadband, Complainant, Petitioner v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, Respondents AT&T Mobility, L.L.C., Intervenor
• Court: U.S. Court of Appeals — Fifth Circuit

907 F.3d 810

WORLDCALL INTERCONNECT, INCORPORATED, also known as Evolve Broadband, Complainant, Petitioner

v. FEDERAL COMMUNICATIONS COMMISSION; United States of America, RespondentsAT&T Mobility, L.L.C., Intervenor

No. 17-60736

United States Court of Appeals, Fifth Circuit.

FILED October 24, 2018

REVISED November 15, 2018

William Scott McCollough, Counsel, McCollough Law Firm, P.C., Dripping Springs, TX, for Petitioner.

Maureen Katherine Flood, Counsel, Federal Communications Commission, Office of General Counsel, Washington, DC, Jacob Matthew Lewis, Associate General Counsel, Federal Communications Commission, Office of General Counsel, Washington, DC, Jonathan Sallet, Federal Communications Commission, Office of General Counsel, Washington, DC, Jefferson B. Sessions, III, U.S. Department of Justice, Washington, DC, for Respondent Federal Communications Commission.

Robert B. Nicholson, Esq., Patrick M. Kuhlmann, U.S. Department of Justice, Antitrust Division, Appellate Section, Washington, DC, Jonathan Sallet, Federal Communications Commission, Office of General Counsel, Washington, DC, Jefferson B. Sessions, III, U.S. Department of Justice, Washington, DC, for Respondent United States of America.

Paul J. Zidlicky, James F. Bendernagel, Jr., Sidley Austin, L.L.P., Washington, DC, for Intervenor AT&T Mobility, L.L.C.

Before KING, ELROD, and HAYNES, Circuit Judges.^*

KING, Circuit Judge:

Worldcall Interconnect, Inc., petitions this court for review of the FCC’s order denying its application for review. Worldcall filed a complaint with the FCC after it and AT&T Mobility, L.L.C., were unsuccessful in negotiating terms for a roaming agreement. In its complaint, Worldcall alleged that AT&T had proposed terms that violated the FCC’s roaming rules and refused to accept terms that complied with these rules. The FCC’s Enforcement Bureau found that AT&T’s proposed rates did not violate its roaming rules. Worldcall sought review of the Bureau’s order from the FCC, which denied its application. Worldcall now petitions this court for review. We DENY the application.

I.

A.

The concept of roaming is familiar to the average cellphone user. What the average cellphone user, or even the average lawyer, is likely unfamiliar with is the complex regulatory framework that underlies the use and provision of those services. This case concerns that framework.

A roaming transaction consists of three parties: the subscriber (i.e., the cellphone user), the host provider, and the home provider. The subscriber purchases wireless service from the home provider. When traveling outside of the home provider’s network area, the subscriber uses the host provider’s network infrastructure to receive mobile services. For this to be possible, the home provider and host provider must enter into an agreement granting the home provider’s subscribers use of the host provider’s network.

The Federal Communications Commission (the "Commission") regulates roaming services. The Communications Act of 1934 (the "Act"), 47 U.S.C. §§ 151 - 624, empowers the Commission to regulate wire and radio communication in the United States, including roaming services.

The Commission’s regulation of roaming services reaches back to the early 1980s, see Cellco P’ship v. FCC , 700 F.3d 534, 538 (D.C. Cir. 2012) (citing An Inquiry Into the Use of the Bands 825-845 MHz & 870-890 MHz for Cellular Commc’ns Sys. and Amendment of Parts 2 & 22 of the Comm’n’s Rules Relative to Cellular Commc’ns Sys. , 86 F.C.C.2d 469, 502 (1981) ), but only two comparatively recent regulatory developments require discussion here. The first came in 2007, when the Commission issued an order concerning automatic roaming. Reexamination of Roaming Obligations of Commercial Mobile Radio Serv. Providers , 22 FCC Rcd. 15817, 15818 (2007) (" Automatic Roaming Order "). In the Automatic Roaming Order, the Commission defined automatic roaming as a service with which "a roaming subscriber is able to originate or terminate a call in the host carrier’s service area without taking any special actions." Id. app. A at 15850 (amending 47 C.F.R. § 20.3 ). Automatic roaming is defined in contrast to manual roaming, which requires special action on the part of the subscriber—typically providing a credit card number to the carrier—before the other network can be used. Id. The Automatic Roaming Order provided that host carriers must provide automatic roaming "upon reasonable request" and "on reasonable and nondiscriminatory terms and conditions." Id. app. A at 15851 (amending 47 C.F.R. § 20.12 ). The order cabins the application of this obligation, however, to (1) "CMRS [commercial mobile radio service] carriers" who "offer real-time, two-way switched voice or data service that is interconnected with the public switched network" and (2) "the provision of push-to-talk and text-messaging service by CMRS carriers." Id. CMRS had been previously defined under 47 C.F.R. § 20.3 as "a mobile service that is: (a)(1) Provided for profit, i.e., with the intent of receiving compensation or monetary gain; (2) An interconnected service; and (3) Available to the public, or to such classes of eligible users as to be effectively available to a substantial portion of the public; or (b) The functional equivalent of such a mobile service."

Importantly, the Automatic Roaming Order expressly did not extend to noninterconnected data services, including Mobile Broadband Internet Access Services ("MBIAS"). Automatic Roaming Order, 22 FCC Rcd. at 15839. Responding to increases in the use of noninterconnected data services and the difficulty of small providers in obtaining roaming agreements from larger carriers, the Commission promulgated the Data Roaming Order in 2011. 26 FCC Rcd. 5411, 5416 (2011) (" Data Roaming Order "). The Data Roaming Order applied to "all facilities-based providers of commercial mobile data services [CMDS]," id. app. A at 5458 (amending § 20.12 ), and defined CMDS as "any mobile data service that is not interconnected with the public switched network and is: (1) provided for profit; and (2) available to the public or to such classes of eligible users as to be effectively available to the public." Id. app. A at 5457 (amending § 20.3 ). Under the Data Roaming Order, providers of CMDS are required to "offer roaming arrangements to other such providers on commercially reasonable terms and conditions," subject to limitations. Id. app. A at 5458 (amending § 20.12 ). The only limitation relevant here is the understanding that "providers may negotiate the terms of their roaming arrangements on an individualized basis." Id. The Commission assesses commercial reasonableness on a "case-by-case" basis, considering the "totality of the circumstances." Id. In the Data Roaming Order, the Commission set forth a non-exhaustive list of factors it may consider in making this determination. Id. at 5452-53.

CMDS providers’ ability to individually negotiate under the Data Roaming Order creates a critical distinction between that order and the Automatic Roaming Order. Under the Automatic Roaming Order, discrimination in terms is not permissible; under the Data Roaming Order, it is. See Cellco P’ship , 700 F.3d at 548. This is because the Commission did not intend to subject CMDS providers to what are known as common carriage obligations (discussed below). See id. at 545. Indeed, the D.C. Circuit upheld the Data Roaming Order on the basis that it did not subject CMDS providers to common carriage obligations, as this would have likely exceeded the Commission’s authority under the Act. See id. at 545.

The Commission promulgated the Automatic Roaming and Data Roaming Rules under Titles II and III of the Communications Act, respectively. Title II of the Act grants the Commission power to regulate "common carrier services." Title III grants the commission power to regulate radio communications. Common carrier services regulated under Title II must be furnished "upon reasonable request," 47 U.S.C. § 201(a), on "just and reasonable" terms, § 201(b), and without "unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services." § 202(a).

Although Title II’s definition of "common carrier" is circular, see id. § 153(11) (defining "common carrier" as "any person engaged as a common carrier for hire"), Title III clarifies which mobile services should be treated as a common carriage and which should not. Section 332(c)(1)(A) directs the Commission to treat anyone providing "commercial mobile service," insofar as it is providing that service, as a common carrier, excepting such classes as the Commission may prescribe. In turn, § 332(d)(1) defines "commercial mobile service" as "any mobile service ... that is provided for profit and makes interconnected service available (A) to the public or (B) to such classes of eligible users as to be effectively available to a substantial portion of the public, as specified by regulation by the commission," and § 332(d)(2) defines "interconnected services" as a "service that is interconnected with the public switched network (as such terms are defined by regulation by the commission) or service for which a request for interconnection is pending." Any mobile service that is not a commercial mobile service or its functional equivalent is designated a "private mobile service." Id. § 332(d)(3). Insofar as a person is providing private mobile service, it may not be treated as a common carrier. Id. § 332(c)(2). Thus, if a service is not interconnected with the public switched network, it is a private mobile service and therefore not subject to common carriage obligations.

To recap, the resulting regulatory regime divides the world of roaming—for our purposes, at least—into CMRS and CMDS. CMRS includes interconnected voice or data services, as well as text and push-to-talk.¹ Providers of CMRS services are subject to common carrier obligations and are not allowed to discriminate in the terms t...