U.S. Department of Justice Reviewing Wireless Carrier Exclusivity Agreements

[MacRumors]

The Wall Street Journal reports that the U.S. Department of Justice has opened a preliminary inquiry into potential anti-competitive practices by the country's largest wireless carriers. One of the major issues being investigated is the existence of handset exclusivity contracts such as that between AT&T and Apple for the iPhone.

Among the areas the Justice Department could explore is whether wireless carriers are hurting smaller competitors by locking up popular phones through exclusive agreements with handset makers, according to the people. In recent weeks lawmakers and regulators have raised questions about deals such as AT&T's exclusive right to provide service for Apple Inc.'s popular iPhone in the U.S.

AT&T and Verizon are expected to be the prime targets of the inquiry, as the two companies control a combined 60% of the U.S. wireless market and an additional 90 million landline subscribers.

The inquiry comes several weeks after several U.S. Senators issued a letter to the Federal Communications Commission urging the agency to investigate the exclusivity arrangements between handset manufacturers and wireless carriers.

Article Link: U.S. Department of Justice Reviewing Wireless Carrier Exclusivity Agreements

[kornyboy]

Wirelessly posted (iPhone: Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_0 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7A341 Safari/528.16)

Now this comes out. Phone companies and wireless providers have been doing this for years.

[DELLsFan]

It's about time!

[xIGmanIx]

i cant imagine anything bad coming from this other than the carriers hiking up their subscription prices as "retaliation" if they can't make certain devices carrier specific. As a consumer i prefer this, i just hope the hardware manufacturers support it as well.

[excaza]

Exclusive handsets have been a staple of wireless providers for pretty much as long as they've been around. Pretty sad that it takes the iPhone to finally cause concern with the practice.

Hopefully something good comes from it. Like Verizon getting the iPhone.

[Boneoh]

Good news for consumers

[xIGmanIx]

Originally Posted by excaza

Exclusive handsets have been a staple of wireless providers for pretty much as long as they've been around. Pretty sad that it takes the iPhone to finally cause concern with the practice.

Hopefully something good comes from it. Like Verizon getting the iPhone.

i don't know if the iPhone was the driving factor. I would like to be able to check out the Palm Pre but since my company uses AT&T, no dice

[Xavier]

Hopefully this loosens the controlling grip of the wireless companies. But I have this feeling that not much is going to change, at least not anytime soon.

[dagamer34]

Exclusivity contracts plus the fact that AT&T refuses to unlock an iPhone after your two year contract is up. As far as I know, they've never had such a stern refusal with any other phone. This has shady written all over it.

[esquire360]

I thought this would happen ... t is sucky for customers to not be able to choose

[NokX]

if i want my company to have an exclusive deal with another company that's my right. the government needs to stay out. what private citizens do are of no concern to the government as long as they're not infringing on the rights of others.

[wolfshades]

I fully expect the Justice Department to affect a ruling that would eliminate these types of exclusivity agreements on the grounds that they provide a sort of psuedo-monopoly.

[krye]

Good!

I hope they make this carrier-locking BS illegal soon so that we can break away from AT&T. They are the worst carrier EVER!

I am in NY and the service is a joke. I can't make calls from my own home! I have to go outside to make a phone call. It's ridiculous. If I could get my iPhone officially supported/blessed on Sprint or Verizon's network, I'd drop AT&T in a heartbeat.

[kornyboy]

Wirelessly posted (iPhone: Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_0 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7A341 Safari/528.16)

Originally Posted by Boneoh

Good news for consumers

It really could go either way. The prices for the phones could go up. Then again, competition between carriers could mean lower prices.

At any rate Apple will not be able to negotiate prices with every carrier.

[NokX]

Originally Posted by esquire360

I thought this would happen ... t is sucky for customers to not be able to choose

what do you mean "not be able to choose"?

i chose to leave US Cellular to go with AT&T to get the iPhone. i had a choice.

[terryzx]

People should be able to choose ANY phone that they want and use it on ANY carrier they like

[techfreak85]

haha good. i want my verizon iphone.
i wonder how soon it will be before any of this actually happens.

[optophobia]

Originally Posted by kornyboy

Wirelessly posted (iPhone: Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_0 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7A341 Safari/528.16)



It really could go either way. The prices for the phones could go up. Then again, competition between carriers could mean lower prices.

At any rate Apple will not be able to negotiate prices with every carrier.

agreed. Not necessarily a good thing.

[NokX]

Originally Posted by terryzx

People should be able to choose ANY phone that they want and use it on ANY carrier they like

then buy phones from companies that do that and get the message out. running to the government for every one of life's "problems" isn't the way to do it.

let's go after mcdonald's next because i REALLY want a mountain dew when i go there, but they only serve coke products.

[funnyent]

As much as AT&T has failed, this could be a big hurt for Apple. It's kind of like trying to put Vista on different types of computers, now Apple will have to make different models of the iPhone. This is because AT&T and Verizon and Sprint all run of different networks. Well, now the iPhones would all need different chips.

[solarguy17]

You guys just don't get it. Just becuase they won't be able to do carrierlocks anymore doesn't mean they have to make the phone work on sprint and/verizon. Since ATT and verizon use differettech all apple has to do is make the phone only tdma combatible (which it s now) and then that lockks it to only AT&T and tmbile. They still won't put on verizon becuase the govnment can't force them to make a product.

Although with Obama as our president the whole industry will be socialized and it won't matter any way.

[idkew]

GOOD!

I was with T-Mobile for a decade before I switched a few eeeks ago to AT&T for the 3GS.

The switch has been full of headaches.
• Took a week to activate my wife's iPhone. Had to call 3 times before someone would help. Waited on hold for 1 hour and 15 minutes to get it activated. While on hold, I called again and the person who answered told me to send her iPhone in since it was defective and go through a complicated process to get my money back. When I hung up with him, the other person took me off hold and fixed it, partially.
• When her iPhone was activated, they never activated the data plan, had to call again for that.
• AT&T charged me for service before the 3GS was even shipped from Apple. Initially they refused to refund the token amount ($6). They eventually gave me $20 even though all I asked for was $6.

I never had one problem with T-Mobile in 10 years.

[coday182]

Yeah well it seems like a good deal, but think twice. This whole &$(#@ 'in country is going to turn into a communist nation under the new leadership in Washington, however it's happening even faster than I thought it would. Taking the money from the people who have worked for it, and deserve it, and distributing it to others who haven't put in the time or effort. Like the way Apple is very strict about quality-control, and uses exclusivity with AT&T as a means to make sure the iPhone isn't ruined by a bunch of wireless companies doing anything to make a profit.

It's like you are making lemonade. You only sell it to a certain distributor because they keep it nice and cold and fresh, and you have a reputation for the best lemonade which is what made your business. Then after you've been doing it for some time, the government comes out of nowhere and says you have to give it to all the distributors who want it no matter what.

Of course, nobody will do anything about it I imagine because we can't see the forest for the trees. All we hear is "you might be able to get an iPhone with whatever service provider you have now." But we don't think about things like how AT&T has a special voicemail server, among other things, designed for the iPhone. If you buy one with sprint or verizon, will you be getting an iPhone with features that your network won't be able to support? Or will Apple just have to throw away the option to choose which voicemail you want to listen to, and we'll be back to doing it the same way we have fo the last 10 years.

(sorry not the best example, but it's off thetop of my head)

[andiwm2003]

i wish they would look into the fact that the iPhones can not be unlocked after the two year contract is up.

At that point I have fully paid back my subsidized iphone and it should be unlocked. but even my not subsidized G2 phone is not usable as phone.

I switched to a different phone and ATT essentially blocked the phone function on MY PRIVATE IPHONE by deactivating the Sim card. And apple blocks me from using any other Sim card.

I can't even take my current ATT Sim card and use it in my old ATT iPhone.

[tekcor]

The article doesn't say that Apple would be required to manufacture different iPhones, only that AT&T wouldn't be the only one to support them. Verizon wouldn't necessarily get the iPhone because it can't work on Verizon's network. That's Verizon's issue, not Apple's. The government can't force Apple to produce a CDMA iPhone.

So in the U.S. it's really only T-Mobile who would gain access to the iPhone. If Verizon wants to bring their network up to modern technology to gain access to the iPhone market, that's their business.