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.

By Electronista Staff