[Corp. Watch] Senators question cellphone providers' legal monopolies

[Corporation Watch]

Will the Feds Force Apple to Break Up With AT&T?

  Senators ask FCC to look into exclusivity arrangements
  between cellphone carriers and handset manufacturers

Ian Paul


(PC World, June 16) -- Are you fed up with exclusivity arrangements  
between cell phone carriers and handset makers? If so, you may have  
allies on Capitol Hill.
	Four U.S. Senators from the Senate Committee on Commerce, Science and  
Transportation have sent a letter to Michael J. Copps, the acting  
chairman of the Federal Communications Commission, urging the FCC to  
examine the issue of exclusivity arrangements between handset carriers  
and manufacturers.

	The letter, which is signed by Sens. John Kerry (D-Mass.), Roger  
Wicker (R-Miss.), Byron Dorgan (D-N.D.), and Amy Klobuchar (D-Minn.),  
expresses concern that handset exclusivity arrangements may be anti- 
competitive and reducing consumer choice in the marketplace.

	The letter identifies five major issues the senators want the FCC to  
examine:

  • The increasing prevalence of exclusivity arrangements between  
cellphone manufacturers and service providers

  • How exclusivity agreements may be restricting consumer choice,  
particularly for consumers living in rural areas

  • How exclusivity agreements may place limitations on a consumer's  
ability to take full advantage of handset technologies, such as the  
ability to send multimedia messages (MMS) or the ability to "tether" a  
device to a computer for Internet use

  • How exclusivity agreements may be inhibiting the ability of  
smaller, regional carriers to compete

  • How exclusivity agreements may play a role in encouraging or  
discouraging innovation within the handset marketplace
	The senators' letter follows a petition filed last month by the Rural  
Cellular Association, asking the FCC to study how exclusivity  
arrangements affect consumers. On Wednesday, the Commerce Committee  
will hold its own hearing on these issues to determine if legislative  
action is necessary.

	It's interesting to note that some concerns spelled out by the  
senators sound like they're a direct reaction to recent complaints  
over AT&T's status as the exclusive U.S. provider for Apple's iPhone.

	When last week Apple announced launch details for iPhone OS 3.0, AT&T  
was the target of scorn over delays to supporting the iPhone's new MMS  
and tethering capabilities. In the past, AT&T has also been accused of  
having spotty 3G coverage in rural areas.

	Since the iPhone's introduction in 2007, several handset makers have  
tried to emulate the popularity of Apple's device by offering  
exclusivity deals of their own. Two recent examples include the Palm  
Pre, currently on Sprint's Now Network, and T-Mobile's G1, the first  
Android-powered handset.