We all know about roaming fees. They're terrible. For anyone who has never dealt with roaming, here's a brief rundown.
When you're in an area that is not covered by your mobile phone carrier you can generally "roam" onto another carrier's network. Roaming is made possible because of agreements that carriers have with each other to connect calls for each others' customers. Sometimes one carrier pays the other a fee for this. Sometimes they reach no fee agreements. Sort of a "We'll let your customers roam over here if you let our customers roam over there" deal.
Currently Sprint (who is a struggling number 3 in the Big 4*) is trying to expand into new areas controlled by AT&T. The reason that the issue is going all the way to the FCC is that Sprint wants to do so for free.
Here are some of the details from the AP's Dibya Sarkar, courtesy of Yahoo! Finance
AT&T and rival Sprint Nextel are in a bitter dispute over fees to use one another's voice networks. The nation's largest phone company doesn't want Sprint expanding a no-fee deal to nearly half the country. So it's taken the fight from the states to the Federal Communications Commission.
If AT&T doesn't get its way, Sprint can go fee-free into 22 states and potentially cost its rival millions in annual revenue.
When AT&T was trying to get its merger with BellSouth approved they had to accept certain conditions from the FCC. One such condition would allow Sprint to carry over roaming agreements reached in one state to another. It is this provision that Sprint is trying to use in order to increase its roaming coverage (which it doesn't charge customers for, by the way) for free.
AT&T, by being the "Big Dog" of American mobile phone carriers, is catching heat from an unlikely cadre of Sprint allies.
"Our worst suspicions about AT&T have come true," said Sprint spokesman John Taylor. "They just said whatever they needed to say in order to win approval of their merger with BellSouth."
A lot of other major players seem to agree. Metro PCS, Charter Communications and cable super-heavyweight Comcast all seem to be worried that AT&T is trying to back out of its agreement with the FCC.
Even Verizon is backing up Sprint. Verizon is in a tough spot, though. On the one hand, they don't want to make it easier for AT&T to get out of roaming agreements. Verizon makes those agreements too, you know. From that angle, it makes perfect sense for Verizon (number 2 in the Big 4) to support Sprint.
The conspiracy theorist in me thinks differently. There were rumors floating around that Sprint's merger with Nextel was to avoid a Verizon buyout of Sprint. The rumor was bolstered by Verizon trying to buy itself back from Vodafone (Verizon Wireless is a joint venture between Verizon Communications and Vodafone Group). If Verizon sat back and let AT&T fight or even went as far as to support AT&T things would get more expensive for Sprint. That, in turn, could weaken Sprint's already rock-bottom stock (last traded at $5.71/share as opposed to Verizon's $35.04/share) enough for Verizon to try a buy. Verizon would then be the only major, national CDMA carrier and would also leap into an incredibly dominant 1st place in the Big 4, which I guess would become the Big 3. Based on subscriber numbers, a merged Sprint/Verizon would need to lose about 50 million subscribers for AT&T to get back into 1st. That would essentially mean that all but 3.8 million of Sprint's customers would have to go elsewhere post-merger. Admittedly, customers more concerned with price may try and go to another carrier (Verizon isn't known for being cheap), but the customers who are sticklers for quality probably wouldn't mind being taken under the umbrella of the self-proclaimed most reliable network in the country.
If Sprint's "Simply Everything" plan doesn't help to retain and create customers and they don't make some serious changes to their customer support (perennially rated as the worst customer support in the country) a Verizon buyout could make the jump from possibility to reality.
*"The Big 4" refers to the 4 largest mobile phone carriers in the U.S. -
AT&T, Verizon, Sprint, and T-Mobile
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