FCC to Examine Exclusive Cell Phone Deals

September 1, 2010

Sprint is considering whether to allow rival T-Mobile invest in Clearwire. Sprint Nextel Corp. has bet its future on offering speedy data services to mobile devices over a new high-speed, "4G" network and has joined with upstart Clearwire Corp. to build it.

August 30, 2010

An unknow number of Samsung Galaxy S handsets could be reset back to their factory settings just by connecting them to a computer, the manufacturer has warned.

August 26, 2010

The price of wireless phone services declined each year from '99 to '08, despite reduced competition as the $150 billion industry consolidated, says the Government Accountability Office.

August 23, 2010

Groups representing broadcasters, musicians and record companies say they may ask Congress to require that new mobile phones include equipment to receive FM.

FCC to Examine Exclusive Cell Phone Deals

According to a report by the Associated Press, the Federal Communications Commission will investigate whether exclusive cell phone deals, such as the one that locks the iPhone to AT&T, are good for consumers.

The acting chairman of the Federal Communications Commission, Michael Copps, has instructed the commission's staff to review exclusivity arrangements.
"In the fast-changing wireless handset market ... we must ensure that consumers are able to reap the benefits that a robust and innovative competitive marketplace can bestow," Copps said Thursday at an industry conference in Washington.

Earlier this week, Sen. John Kerry, a Massachusetts Democrat, and several of his Commerce Committee colleagues penned a letter to Copps asking him to investigate exclusive cell phone deals like the one between AT&T and Apple for the iPhone.

Carriers generally negotiate exclusive deals that last six months to a year, after which other carriers can also sell the phone model to their customers. By launching with only one carrier, the manufacturer gets a higher price or extra promotional spending on the phone.
Apple Inc.'s iPhone is a much-noted exception. Dallas-based AT&T Inc. has been the sole U.S. carrier since Cupertino, Calif.-based Apple launched the first model two years ago, frustrating consumers who want to use it on another carrier.

Handset exclusivity was one of the subjects of a Senate Committee on Commerce, Science and Transportation hearing this week.

Consumer rights group such as Washington-based Free Press, applauded the scrutiny, telling Reuters that “the path to innovation is paved by openness, and unlocking devices is a good start.”
Verizon Wireless offered a few months ago to shorten its exclusive periods for new cell phones from LG and Samsung to six months, from as long as a year, to give small rural carriers a better chance to sell up-to-date phones. But the rural carriers rejected the offer as insufficient, AP reproted.

(June 19, 2009)