FCC to look at exclusive cell phone deals

Jun 19, 2009 By PETER SVENSSON , AP Technology Writer

(AP) -- Regulators 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.

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 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.

Barbara Esbin, senior fellow at the Progress & Freedom Foundation, a think tank that generally opposes government intervention, told the committee that exclusive arrangements help manufacturers bring new devices to market quickly and gives the carriers incentives to promote and subsidize them.

Competing U.S. carriers have found touch-screen phones from other manufacturers to compete with the iPhone, but none has come close to equaling that phone's cachet. The third model, the 3G S, went on sale Friday.

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.

The rural carriers rejected the offer as insufficient.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Why the SIM card has had its day

add to favorites email to friend print save as pdf

Related Stories

Verizon offers to cut exclusive time for phones

May 08, 2009

(AP) -- Verizon Wireless has offered to shorten the period in which it demands exclusive rights to new cell phones from LG and Samsung in an effort to give small rural carriers a better chance to sell up-to-date phones.

FCC: Landline number move should take 1 day, not 4

May 13, 2009

(AP) -- The Federal Communications Commission voted Wednesday to force landline phone companies to act faster when their subscribers want to move their phone number to a rival service.

Analysis: Why America Needs a Google Phone

Mar 23, 2007

In terms of compatibility with your existing businesses, Google building a phone would be like Chrysler starting an ISP. But rumors about Google building a phone reveal plenty about the frustrations and desires ...

Recommended for you

Why the SIM card has had its day

Mar 05, 2015

The small microchips known as "subscriber identity modules" or SIM cards that are required for mobile phones to log on to a phone network will soon be 25 years old. While mobile phones and network technology ...

The UK doesn't yet need net neutrality regulations

Mar 04, 2015

The net neutrality debate in the US has ended, at least for now, with the Federal Communications Commission ruling for stricter regulation of telecoms and internet service providers (ISPs) in order to maintain ...

Italy adopts plans to shift into Internet fast lane

Mar 04, 2015

Italy's government adopted a six-billion-euro plan Tuesday to modernise its Internet network and improve access to broadband in hopes of shedding its reputation as one of Europe's online laggards.

Phone firms and the quest for the 5G Holy Grail

Mar 03, 2015

Lightning-quick downloads, driverless cars and remote surgery: telecom firms are racing to develop a new generation of "5G" mobile networks that could start to change the world in five years.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.