Congress Vs AT&T : Exclusivity=Monopoly?

[gary_gnu]

It sounds reasonable enough on the surface to say that a cellular carrier should be able to make a deal with a phone manufacturer for exclusive distribution rights. AT&T used to have one of those for several decades with a company called Western Electric. And while folks complained about the service from time to time, they didn't complain much about the phone...back before they had touchscreens. But what if you're a rural communications company, and you can't exactly make such exclusive deals. Is it unfair that you're not entitled to make a deal for something as hot as the iPhone? Think it doesn't matter much? Ask the state of Vermont, where you can't buy an iPhone...because AT&T doesn't cover Vermont except for roaming. Imagine, the nation's second largest carrier doesn't sign up customers in an entire state represented by Patrick Leahy. That might not be a good thing.

Afternoon of June 15, 2009 • Our representatives in Washington have taken an interest in what's up with our mobile phones, with two investigations currently announced or underway. In the first one, four senators -- Byron Dorgan (D - N.D.), John Kerry (D - Mass.), Amy Klobuchar (D - Minn.) and Roger Wicker (R - Miss.) -- have formally asked the FCC to look into whether handset exclusivity deals such as AT&T's for the iPhone or Sprint's for the Pre are limiting consumers' ability to use their phones fully.

The senators' action is in response to a letter filed with the FCC by the Rural Cellular Association last month (PDF available here), petitioning for a review of the concept of exclusivity arrangements, arguing that they may be against the public interest.

"For many consumers, the end result of these exclusive arrangements is being channeled to purchase wireless service from a carrier that has monopolistic control over the desired handset and having to pay a premium price for the handset because the market is void of any competition for the particular handset," the RCA wrote. "For other consumers ??"- particularly rural ones ??"- these exclusivity arrangements prevent them from purchasing many of today's most popular handsets because they reside in areas not served by the one carrier offering the desired handset. For example, almost one year after launch, residents of Vermont still cannot use an iPhone without violating the terms of AT&T's standard service contract. Why? AT&T provides only roaming service in Vermont and does not allow its subscribers to spend more than 40% of their airtime roaming. The iPhone is also unavailable to most rural residents of Alaska, Arizona, Colorado, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, South Dakota, Utah and Wyoming."

Aha!!! Take that, AT&T!

More here:
Up Front: Congress asks about AT&T iPhone exclusivity | Tech Policy & Law News - Betanews

And video here:
Congress Tackles iPhone Exclusivity Deals on Yahoo!7 Video

[cjvitek]

IMO, exclusivity does not equal monopoly.

A monopoly is about limiting choice for the consumer. A consumer still has the choice to move to a different carrier to get a different phone.

This is, of course, not an expert opinion.

Chris

[chobbs1]

the letter was sent in may? and were only just hearing about it? well if that is a sign of things to come then it will be many years before this particular issue is settled.

I honestly do not want the IPhone on every carrier. other carriers will only screw the phone up. I have a feeling that AT&T will allow users to have a contract even if they are living in Alaska or Vermont and use off carrier towers. they'll just get charged more. AT&T will not let the IPhone go without a fight.

Congress is a slow moving beast. again I think it will be years before we see anything come of this.

[Jevangil]

Also, you have to remember that AT&T offers the iPhone as a data intensive device. Imagine them selling the device in an area where there is only roaming and having the users rack up hundreds of Gigabytes of data transfer on a roaming network. The bills would be astronomical.

In this case, I would have to say that AT&T is doing the right thing in protecting the consumers in this area from putting themselves in the poor house while checking emails and downloading fart apps on their iPhones.

[icebike]

Originally Posted by chobbs1

I honestly do not want the IPhone on every carrier. other carriers will only screw the phone up.

Nope. Apple at this point in time has more clout than any carrier. They've even went ahead and added tethering right in ATT's face. Talk about a *****slap!

Do not fear change Chobbs. Its a big world out there and the iPhone can't hide behind Ma Bell's skirt forever.

What has ATT done to deserve your loyalty?

[gary_gnu]

Originally Posted by Jevangil

Also, you have to remember that AT&T offers the iPhone as a data intensive device. Imagine them selling the device in an area where there is only roaming and having the users rack up hundreds of Gigabytes of data transfer on a roaming network. The bills would be astronomical.

In this case, I would have to say that AT&T is doing the right thing in protecting the consumers in this area from putting themselves in the poor house while checking emails and downloading fart apps on their iPhones.

Protecting the customers by charging the bejesus out of them when they're still in the US? When I was on T-Mobile not only did I never lose connection - it automatically roamed onto any carrier the phone could find - but I also was never charged for that. Hell, even when I was outside the US CONUS and was only in US Territories.

If they had protecting the customers at heart, they could activate roaming and then not charge people more for it.

If they had protecting the customers at heart, they wouldn't charge 20¢ per text message if you're not on a plan. 20¢? It's a couple of characters of text, for crying out loud! It takes more data transfer to connect a call and say the "H" in "Hello!"

[infenit101]

The more networks its on the better. Competition is good. It will drive prices down.

[infenit101]

Originally Posted by Jevangil

Also, you have to remember that AT&T offers the iPhone as a data intensive device. Imagine them selling the device in an area where there is only roaming and having the users rack up hundreds of Gigabytes of data transfer on a roaming network. The bills would be astronomical.

In this case, I would have to say that AT&T is doing the right thing in protecting the consumers in this area from putting themselves in the poor house while checking emails and downloading fart apps on their iPhones.

The Iphone is no more data intensive then media net phones.

[chobbs1]

If you read the article it clearly states that users that use their phone on off carrier towers more than 40% of the time are terminated as this is when it gets to be too expensive to AT&T. My point is that perhaps AT&T will start allowing this and charge extra to offset the cost. That would be a way to get around the issue without having to let every Joe shmoe carrier carry a certain phone.

I like AT&T but I also understand that it's a business and not alway on my side. In the case of the iPhone though, they have kept their mits off of the phone and allowed apple to have total control of it. They are charging us up the wazoo for this privealege. But I, for one do not want any carrier bloatware on my iPhone. Other carriers will screw the phone up.

[chobbs1]

@garygnu this has actually been a topic that Has grabbed my attention! I am very interested to watch how this plays out.

Originally, knee jerk reaction, I thought "can't the govt keep their focus on something more important?". Don't fuss with something that is working so well. In other words. Leave the damn phone alone!

I have since realized that, the issue is bigger than the iPhone. It is a choice issue that could drive smaller carriers out of business.

While I still think that opening up the iPhone to all carriers is a mistake. I understand that perhaps this is something that may have to happen.

Icebike has started a thread with the exact same topic and would love for these two threads to merge toake this an easier topic to follow.