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

[macintoshtoffy]

Finish reading my post.

Because you added content after I replied to it - how is that fair to complain about me no reading a post when the original post left out everything from the bold part down.

I assumed when you said, 'unlocked, subsidised' that it would be unlocked with no strings attached. What is wrong with something like this:

http://www.vodafone.co.nz/iphone/16gb-white.jsp

Subsidised on a contract, but if you want to buy it out right to put it on prepaid, you can do that too. Is that something like what you're getting at?

 

[Lokheed]

Why does no one seem to be more upset about 2 year contracts???

What they should be investigating is these two-year contracts that are the norm here in the States. Those to me are contrary to the whole 'free-market', supply-and-demand ideal. If I sign a 2 yr contract today with any one of these carriers, for, say, $40 a month for 500 minutes/mo, and a year from now that same company changes their prices to where $40 gives you 1000 minutes/mo, I have to sign on for 2 more years at that point to get this new rate! how is that fair? How is that not hurting the consumer? If I were able to change carriers freely, I'm sure the price of plans would fall. And then all consumers would benefit.

I know you'll say the 2 yr contract is to pay for the 'free' phone you get when you sign up, but 1) I should have the option of bringing my own phone or paying full price, and not signing the 2 yr contract, and 2) like someone else mentioned, when your phone is paid for after 2 yrs, your monthly rate does not go down.


And why are we still paying when we receive phone calls????? The person calling me is paying, why should I pay as well???

Then you wouldn't mind paying the $699 it costs for a new phone huh? Those contracts keep companies from losing money and they can return in kind with giving you a $800 phone for $50. It's a necessity. You can't have customers walking away after two months because they want to be on another network. Even if you get the phone back, it means nothing because used electronics don't have value.

Here in Canada, the norm is now 3 years. As for bringing your own phone, the best thing to do is take the cheap/free phone they give you and sell it. BB Curves go for around $300+ here. And carriers are giving them away for $50 (or free).

As for the last point, there is no reason... and it hasn't always been the case, especially in Europe where people actually don't take that crap...

 

[Tallest Skil]

I assumed when you said, 'unlocked, subsidised' that it would be unlocked with no strings attached. What is wrong with something like this:

http://www.vodafone.co.nz/iphone/16gb-white.jsp

Subsidised on a contract, but if you want to buy it out right to put it on prepaid, you can do that too. Is that something like what you're getting at?

Yep, that's exactly what I'm saying. It's the carrier selling the phone unsubsidized, in this case, but I meant also that the manufacturers of the respective phones could sell them directly at an unsubsidized price.

 

[coleridge78]

Then you wouldn't mind paying the $699 it costs for a new phone huh? Those contracts keep companies from losing money and they can return in kind with giving you a $800 phone for $50. It's a necessity. You can't have customers walking away after two months because they want to be on another network. Even if you get the phone back, it means nothing because used electronics don't have value.

I don't think this is realistic. A lot of phones (the ones that me and 70% of the people I know use) cost under $100 unsubsidized. A lot more are under $150 unsubbed. I'd pay that in a second to go without a two year contract. For both those and more expensive phones, in a free market there would tend to be subsidized and unsubsidized choices in order to maximize the number of people willing to spend money with you rather than a competitor.

If a company thinks that they needed to lock customers into contracts to keep them, that's just fine. In a free market. Of course in a free market that company would be a joke (unless they had some truly compelling service).

But cell phone service is an oligopoly, not a free market, and as long as the can-count-on-one-hand players have the same contracts rather than competing, there is a legitimate public interest in enforcing choice. To do otherwise surrenders an essential market (telephone service) to an unaccountable planning committee (the executives of each member of the oligopoly).

 

[alphaod]

Stay away government!

 

[polythene pam]

What I'm saying is: there should be an option. Choice is fair.
Exactly what the Vodafone plan posted above is -- fair.

Plus, there are plenty of phones that don't cost $700 --or even half that. Not everyone needs a smart phone.

 

[wordoflife]

I personally don't see why the government has to get in this conversation. Its up to Apple regarding what they do.

The Pre is on Sprint
The Sidekick is on Tmobile
The iPhone is on AT&T


What's the big deal? I don't see any.

__________________________________________

I personally love the iPhone the way it is- on AT&T. I believe it is only going to get better. You can't expect everything picture perfect at first, can you? When LTE comes out on AT&T I think the service will get much, much better. If you think the iPhone is going to run oh so perfectly on a different network at first, I totally disagree with you.

But thats just my opinion, so don't quote me on this.

 

[Eric8199]

Didn't read all the comments so this may have already been said. Eliminating exclusivity agreements is BAD for the consumer and the product. Here's why: currently the iPhone is what all the other carriers want. They can't have it because it is tied to At&t, therefore they must find other companies to build "iPhone killers" to compete. If the iPhone was available on every carrier, there'd be no reason to do that. The carriers would all just get the iPhone and there'd be no new innovation. Could happen with any phone. The only ones spurring the competition would be the cell phone makers. Smaller companies would be run out of business and only the big ones would remain.

This wouldn't be good for the industry at all, and I think the government should leave it alone, like about 99% of the crap they touch. FYI, this is coming from someone who would almost kill for an iPhone on Verizon.

 

[coleridge78]

Stay away government!

Stay away unelected, unaccountable oligopolies!

 

[flar]

Another thing to consider is that cellular providers don't operate in isolation. They are consuming a resource (airwave spectrum) that has to be carefully allocated on our behalf (by the FCC).

In some sense, there is less room for a new provider to come in and shake up the business status quo in this industry because all of the decent frequency spectrums are already spoken for. (There are smaller providers in some markets, but they typically work by purchasing roaming rights on the networks of one of the major suppliers and thus operate somewhat at the whim of the major suppliers.)

And it also means that they operate by virtue of having licensed spectrum from the FCC so they operate more as a tenant of a public resource than a completely independent entity. The investigation is by the DOJ, though, rather than the FCC. The FCC would probably only get involved if they were using the spectrum for other than its original purpose.

 

[macintoshtoffy]

Yep, that's exactly what I'm saying. It's the carrier selling the phone unsubsidized, in this case, but I meant also that the manufacturers of the respective phones could sell them directly at an unsubsidized price.

Cool, New Zealand and Australia have had it for quite some time. I remember when I bought a prepaid from Optus in Australia you could pay $50 and unlock the phone instead of waiting a year (after a year you could get it unlocked free of charge). I'm surprised, after having seen the prices in the US, how much you guys get ripped off. Heck, New Zealand only has two carriers, Telecom and Vodafone (well, two independent networks) - we seem to get a better deal than you guys.

 

[chaosconan]

Is it still possible to buy a phone without a contract? Last time I shopped for a phone, that was a 6 months ago, they would not sell me the phone that i fell in love with without a stupid contact.

Why cant they just give us the option to buy it without the contract. I don't have a problem with contracts. But at least give us the option to buy it without the contact. And if I don't like your service I can switch to another carrier using the same phone

 

[The Monkey]

Their weird Psuedo-Libertarian Fascist-Communist ideology is like freshman physics. Sounds great in theory, but in the real world there exist things like "friction" and "drag" and "market distorting oligopolies".

Heh. Very well said. Although I think elevating those arguments to freshman level is a bit too high a compliment. Unless of course you mean high school...

What they should be investigating is these two-year contracts that are the norm here in the States.

At this point, we have no information that would indicate that DOJ is not looking at those contracts. In fact, unless I have missed something in the last couple of hours, we have no information at all about what DOJ is looking at specifically.

 

[flar]

I personally love the iPhone the way it is- on AT&T. I believe it is only going to get better. You can't expect everything picture perfect at first, can you? When LTE comes out on AT&T I think the service will get much, much better. If you think the iPhone is going to run oh so perfectly on a different network at first, I totally disagree with you.

But thats just my opinion, so don't quote me on this.

Domestically it may work fine. You may not even have had to deal with AT&T Customer Service so you may not have an ulcer forming.

And you may not have been to another country where you have to pay huge fees to use your precious iPhone while your friend with a T-Mobile phone walks into a local corner grocery and buys a bunch of minutes at a great price on a non-contract local sim and puts it in and gets to use their phone for a fraction of what you need to make local calls (and swap back and forth as they feel the need to use their original phone number or a cheaper local number at their whim).

So, yes, maybe it works well for you...

 

[MizzouCowboy]

July 4th is over you can stop waving that flag. There are plenty of innovations from abroad.

I can see you have reached the stage of the debate when you have no further arguments, and resort to accusations of the opposition whining. Well, no-one whines more than a capitalist when there's a credit crunch. Watch how all those big companies run to mummy government when the "free market" isn't going their way.

Now you're making a big assumption that I am in favor of corporate welfare. I'm not. I was ranting all day long at the GM/Chrysler bailout, should have let them fail. There should be no taxpayer dollars spent to rescue bad business decisions.

And I'm sorry that my "flag waving" is bothering you. Don't like it? Tough. And you don't like my description as "whining"? Well then, what would you call it? A temper tantrum? A rational dialogue?

I call a spade a spade...whining plain and simple.

 

[coleridge78]

Is it still possible to buy a phone without a contract? Last time I shopped for a phone, that was a 6 months ago, they would not sell me the phone that i fell in love with without a stupid contact.

Why cant they just give us the option to buy it without the contract. I don't have a problem with contracts. But at least give us the option to buy it without the contact. And if I don't like your service I can switch to another carrier using the same phone

Because there are four real players involved, only two that are truly omnipresent nationally--and those two, coincidentally, are the halves of a former single company. So all of them offer the same contracts and no other choice. It's implicit collusion because they all understand that locking in a captive audience is cheaper than truly competing. It happens in every oligopoly in the history of mankind--it is, in fact, a necessary ingredient to the formation of an oligopoly--which is why they need to be regulated. Particularly when they use a scarce public resource (spectrum) at the good grace of the public themselves.

The contracts got worse with the advent of number portability, because now there was even more expense involved with having a customer switch to another provider. Some people, of course, will perversely argue that this means number portability is bad--placing the blame on one market distortion that was fixed, rather than the ones that remain.

 

[flar]

Didn't read all the comments so this may have already been said. Eliminating exclusivity agreements is BAD for the consumer and the product. Here's why: currently the iPhone is what all the other carriers want. They can't have it because it is tied to At&t, therefore they must find other companies to build "iPhone killers" to compete. If the iPhone was available on every carrier, there'd be no reason to do that. The carriers would all just get the iPhone and there'd be no new innovation. Could happen with any phone. The only ones spurring the competition would be the cell phone makers. Smaller companies would be run out of business and only the big ones would remain.

This wouldn't be good for the industry at all, and I think the government should leave it alone, like about 99% of the crap they touch. FYI, this is coming from someone who would almost kill for an iPhone on Verizon.

So, do you think the other manufacturers would have just all decided to pack it in if Apple hadn't left them the scraps from the other carriers?

And do you think that nobody buys any smart phone from AT&T other than an iPhone?

It would be hard to imagine why the iPhone was dethroned as the number one selling smartphone by a Blackberry last quarter (and a Blackberry that pre-dated the iPhone by several months) if the iPhone was the be-all and end-all of phones to everyone.

If anything, iPhone availability on every carrier would make it more likely that someone else would come up with an iPhone-killer.

 

[The Monkey]

Businesses work together in their own interest, this is news? Why do we need to regulate this? This is stupid.

Yeah, all those antitrust laws are a bunch of hooey.

 

[jodelli]

Domestically it may work fine. You may not even have had to deal with AT&T Customer Service so you may not have an ulcer forming.

And you may not have been to another country where you have to pay huge fees to use your precious iPhone while your friend with a T-Mobile phone walks into a local corner grocery and buys a bunch of minutes at a great price on a non-contract local sim and puts it in and gets to use their phone for a fraction of what you need to make local calls (and swap back and forth as they feel the need to use their original phone number or a cheaper local number at their whim).

So, yes, maybe it works well for you...

Yep, s'true, Im' still not going to sign with Rogers even though the deal is better now than at the start of the iPhone offering.

I actually wouldn't mind the AT&T deal.

 

[wordoflife]

People who don't like AT&T don't have to buy an iPhone- No one is forcing them.


Just a thought to keep in mind.

 

[The Monkey]

No problem. I've grown more to the libertarian side of life as I get older. I may be an anarchist by the time I die...lol

Heh, they say that's what happens. I'm still a lefty, but I find myself holding my head in my hands plenty due to the actions on my side of the aisle.

Out of curiosity, does an MBA curriculum spend much time on competition/unfair trade practices?

 

[MizzouCowboy]

Heh, they say that's what happens. I'm still a lefty, but I find myself holding my head in my hands plenty due to the actions on my side of the aisle.

Out of curiosity, does an MBA curriculum spend much time on competition/unfair trade practices?

We spent some time on it in several classes...three international business classes and spent a little time on it in business law. Focused one of my papers on outsourcing. The paper dealt mainly with unions and how outsourcing is not the monster it's made out to be these days. It's simply something that the politicians drag out to beat on in an election year.

And, since I used to fly the Republican banner, their side is not all that great anymore. It seems anymore it's hard to tell the two parties apart. Both are trying to see how fast and how much they can spend of future generation's money.

 

[elgrecomac]

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)

Haven't had a good laugh like that in years.....the RED SCARE!!! I did't think Foxnews dweebs hung out here....

 

[elgrecomac]

Didn't read all the comments so this may have already been said. Eliminating exclusivity agreements is BAD for the consumer and the product. Here's why: currently the iPhone is what all the other carriers want. They can't have it because it is tied to At&t, therefore they must find other companies to build "iPhone killers" to compete. If the iPhone was available on every carrier, there'd be no reason to do that. The carriers would all just get the iPhone and there'd be no new innovation. Could happen with any phone. The only ones spurring the competition would be the cell phone makers. Smaller companies would be run out of business and only the big ones would remain.

This wouldn't be good for the industry at all, and I think the government should leave it alone, like about 99% of the crap they touch. FYI, this is coming from someone who would almost kill for an iPhone on Verizon.

Not sure about this argument. RIM was the Microsoft of the smartphone and had multiple carriers and the earth didn't end, did it?

 

[The Monkey]

Both are trying to see how fast and how much they can spend of future generation's money.

At least they found something they're both good at.