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Regulators seek reviews of exclusive handset deals

updated 10:00 pm EDT, Mon June 15, 2009

FCC reviews phone deals

A number of senators have asked the FCC to investigate the market effects of exclusive deals between handset makers and carriers, according to Reuters. The letter, sent to FCC chairman Michael Copps, expressed concerns over potential negative effects on competition in market for cellular goods and services.

The signing senators include democrats John Kerry, chairman of the Senate Commerce Subcommittee on Communications, Technology and the Internet; Byron Dorgan and Amy Klobuchar, along with republican Roger Wicker.

"We ask that you examine this issue carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace," the letter reads. Other potential negative implications of prevalent exclusive agreements include market manipulation or a reduction in innovation.

Apple's agreement with AT&T serves as an example of the business practices that the FCC is being asked to investigate. Both companies have been criticized for restricting domestic sales, although Apple does sell the iPhone through multiple carriers in a number of other countries.

Several lawsuits have accused Apple and AT&T of anticompetitive business practices. One of the first filings claimed that "as a result of Apple's unlawful and anti-competitive conduct, consumers continue to pay artificially inflated prices for the iPhone and AT&T's cell phone service." Several other suits contain similar arguments aimed at the use of software locks to prevent customers from switching to different carriers. Attempts to have the suits dismissed have achieved varying results.

Although concerns for the exclusive relationships are not new, the letter appears to indicate regulators could be closer to taking action. The senators plan to meet on Wednesday to further discuss the matter and assess the need for corrective legislation.

 
Previous Comments

Alright

06/16, 09:04am reply

Now that the government is involved, this will finally get fixed!!

Until apple and AT&T donate large amounts to certain campaign funds, that is. Then it will get dropped because of how it aids consumers.

LouZer

Fresh-Faced Recruit

Joined: Nov 2000

+1

European Model

06/16, 10:19am reply

Why can't we have our phones the way the Europeans have them.

2 Steps:
A. Select the phone of your choice from ANY manufacturer.
B. Sign up for a service contract with the provider of your choice.

Simple, no?

JeffHarris

Fresh-Faced Recruit

Joined: Oct 1999

+1

This is not Europe its US

06/16, 10:25am reply

Because this is not Europe this is USA and we are a capitalistic country where all we care about is money. I wish we have unlocked iPhone that away I can go to whoever I want. Plus they be better competitive pricing.

LEStudios

Fresh-Faced Recruit

Joined: Jul 2008

-1

European Model

06/16, 12:21pm reply

While I would definitely prefer the european model of cell phone sales. The sad truth is that in the US you really have only 2 real choices AT&T and Verizon, and they use different radio technology:( So the main difference between USA and europe is that 1 phone won't work on every service, which does suck IMHO.

And I say 2 "real" choices, b/c Sprint and T-Mo just don't cut it in their coverage of the country as a whole.

snork

Fresh-Faced Recruit

Joined: Feb 2008

0

Re: European market

06/16, 01:58pm reply

Because everyone in the US would be whining over the cost of the iPhone unlocked.

And, LEStudios, keep in mind that it was Apple's decision to lock the iPhone to ATT. They could easily have made CDMA and GSM phones, sold them sans contract, and let you get the type you needed/wanted. But they realized that they needed/wanted high market penetration, and to do that they needed to cut the price, and, as such, they needed someone to subsidize them upfront. (Plus, they wanted to make sure everyone got the data plan, none of this 'just the phone plan' nonsense you get with any other phone).

So, blame Apple first for not 'thinking different'. They're the ones who decided to s**** you to ATT.

testudo

Fresh-Faced Recruit

Joined: Aug 2001

-1

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