updated 03:10 pm EDT, Tue May 20, 2008
Rural Cellular Grills FCC
(Updated with official word) A coalition of extra-urban cellular service providers is today taking the Federal Communications Commission to task as early as today in an attempt to break incumbents' dominance of the cellphone industry, according to reports. The Rural Cellular Association is expected to petition the FCC to investigate the legality of carriers striking exclusive deals for the iPhone and other handsets that prevent any other carrier from offering a given phone over a certain period.
While meant to gain an edge over close competitors in the cellphone market, these deals also have the effect of stifling the ability of small carriers to offer similar lineups, the RCA argues. Rural providers in many cases are unable to secure deals for many desirable phones and thus either lose out to major competitors or else have poorer phone catalogs. The iPhone is cited as a specific example in the complaint; as most of Vermont and some countryside areas in 15 other states aren't served by AT&T, many residents have no official option whatsoever for the iPhone.
US cell providers have traditionally offered staunch opposition to any attempts to break exclusives, claiming that such deals are permitted in a free market and that they are necessary to spur growth in their subscriber bases. The five largest providers in the US have increasingly turned to exclusives in recent months. AT&T's iPhone deal has since been followed up by Verizon's agreement for the LG Voyager, Sprint's for the Samsung Instinct, and Alltel's for the LG Glimmer.
Congressional Democrats have repeatedly pressed carriers on such points and in recent months have introduced measures that will allegedly improve access to carriers by reducing or dropping cancellation fees and reduce the power of carriers to impose contracts.
Update: the RCA has officially filed its complaint and has made the petition available (PDF).