Sprint’s latest “cost-cutting” decision to roam on rural networks in Kansas and Oklahoma gave conservative critics of the Federal Communications Commission a sense of vindication. The FCC’s 2011 data roaming rule, critics argued at the time, would drive down investment and slow wireless network development.
The data roaming rule requires cell phone carriers to allow competitors the ability to offer customers roaming coverage for their cell service, essentially allowing smaller carriers to piggy-back on the backs of carriers who invested in the construction of network infrastructure.
RedState — in the wake of the Democratic Party’s losses in the 2010 midterm elections – warned that the FCC had missed the “jobs and economy memo sent out by voters,” and pondered: “How is it efficient to have government forced access that allows free riders not to invest and develop scarce spectrum resources that could be used to provide more wireless services?”
Republican senators also criticized the rule.
A 2011 letter signed by Republican Sens. Jim DeMint, Pat Toomey and John Ensign outlined a number of objections, claiming that FCC’s proposed rule, which was issued one day later, “threatens to undermine investment, job growth and innovation.”
The rule was approved in April 2011 by the commission in a party-line vote.
At a time when carriers, device makers and tech policy makers grow increasingly concerned about the ability of their networks to serve consumer demand for data-dependent devices like iPhones, Android smartphones and tablets, conservatives warned that reduced incentive for carriers to build up their network infrastructure would not only hurt companies, but hurt consumers in the long run.
Neil Stevens, founder of Stevens Media Services, LLC and a contributing editor at RedState, told The Daily Caller that Sprint’s decision was not a case of “market failure,” but rather, “regulatory failure,” resulting in consumers losing in a government game of picking winners and losers.
“For all of the Obama administration’s high-minded rhetoric of universal access, the government is picking winners and losers,” said Stevens. “In the case of the new data roaming regulations, we now find that Sprint won and rural data users lost.”
In an email to TheDC Wednesday, Bret Swanson, president of Entropy Economics, LLC, called the FCC’s data roaming mandate “potentially dangerous.”
“It could encourage companies to stop building their own networks and instead piggyback onto other networks at government set prices,” said Swanson. “If my competitor can use my network at below market rates, that might discourage me from building more capacity. So not only might the original company reduce investment but others as well.”
“With 37 million iPhones and 15 million iPads sold last quarter, we need more spectrum, more cell towers, more capacity,” Swanson added. “This isn’t the way to get it.”
Sprint is the third largest telecommunications network in the U.S., with headquarters currently based in Overland Park, Kansas.