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

[pika2000]

Reading all the various comments here clearly show how far US consumers have been brainwashed by the major cellular providers.

1. Everybody keep whining about having to pay full price for an unlocked phone. I state this again, unlocked != no subsidy. I repeat my example again, Singapore. The iPhone over there is exclusive on Singtel, sold under contract with subsidy. Is it locked? Hell no. It's unlocked out of the box. There is no logic in provider locking cellphones, other than being anti-competitive. For those that are still defending locked phones, then explain this. Why are pay-as-you-go phones in the US still provider-locked? Pay as you go means no contract, no subsidy, you pay for the phone, yet it's still provider locked? Mind boggling. This is truly anti-competitive behavior, and should be illegal.

2. People are complaining about government have no clue. Free market does work. The cellphone market in the US is NOT a free market. In a true free market, anybody can sell/use any cellphones with any provider. Provider locking is anti-competitive. Want to see an example of free market? Go to Indonesia, and see how the cellular phones market over there. They have malls filled with independent shops selling cellphones. All of them unlocked, per the manufactures' spec. You pick your cellphone, pick your provider, off you go. Simple. Don't like the provider, find another one, use your same phone, SIMPLE! As a result, they have pretty much any high end phones from Nokia, HTC, Sony Ericsson, etc. Oh, by the way, Telkomsel, Apple's partner in Indonesia announced at WWDC, offers MMS and tethering at launch of iPhone 3.0 OS. AT&T? Explain that.

3. People are sensitive with price, thus the brainwashing of paying full price to get unlocked phones done by US providers are working. Go to Asian countries, and you'll see EVERYBODY have a cellphone, even the guy selling crap on the streets. How is that possible? Because unlocked phones result in a TRUE free market.
Example US: You bought an iPhone, then you want to switch phone after the end of the contract. What can you do with the iPhone? Giving it to a family member forces him/her to go with AT&T AND have another contract. Want to sell the iPhone? You have to jailbreak it, which Apple argued that it's illegal. WTF? Technically, you fulfilled your contract, yet the phone is still locked. Example Asia: A rich person has a high-end phone from last year. He/she decided to get the new iPhone. The "older" phone simply goes into a 2nd hand market, where a less rich person can buy older models for cheaper and use them on a network on their choosing, and so on. When the person with the iPhone decided to get a new phone, the cycle continues. No hassles. The network providers have nothing to do with anything. They do what they're supposed to do, simply provide the service. Free market works.

If the US cellphone market is a free market, then why are we so backwards in everything? Why are we still paying for incoming calls/SMS? Why can't AT&T provide a simple service like MMS, while other providers outside the US can? Mind boggling. It's even sadder that there are people defending the backwardness of US providers.

 

[chaosconan]

The better product?

And even playing field. No one should be cheating!

 

[MacCurry]

Its amazing how stupid people are here in the US. They just don't understand what this is all about.

THE REST OF THE CIVILIZED WORLD BUYS PHONES FROM RETAILERS AND SERVICES FROM TELECOM COMPANIES. IF YOU DON'T LIKE THE SERVICES FROM ONE COMPANY, YOU SWITCH TO ANOTHER AND YOUR PHONE STILL WORKS. ITS FREEDOM OF CHOICE!

Congress and the administration are doing this right.

 

[chrono1081]

Its amazing how stupid people are here in the US. They just don't understand what this is all about.

THE REST OF THE CIVILIZED WORLD BUYS PHONES FROM RETAILERS AND SERVICES FROM TELECOM COMPANIES. IF YOU DON'T LIKE THE SERVICES FROM ONE COMPANY, YOU SWITCH TO ANOTHER AND YOUR PHONE STILL WORKS. ITS FREEDOM OF CHOICE!

Congress and the administration are doing this right.

+485038450348590834


My Bosnian and Macedonian friends were amazed when I explained how cell phones worked in the states. And I was amazed how they can buy any phone they want.

 

[MizzouCowboy]

Rationalise it anyway you want, but once you describe your opponent's arguments as "whining" you aren't debating any more. You have ceased to come up with answers of your own and are now at the level of a playground squabble. Your nationalistic bluster is around that level too.

I wasn't specifically referring to you when I made my capitalist comment, but that attitude exists and is the dominant viewpoint in large companies.

You're "when you say whining" you aren't debating anymore is a very weak straw man. I have yet to see you put forth a reasonable argument. Put one forth and maybe we can talk.

And again, to call whining anything other than what it is, is intellectually dishonest. What would you call it? If I remember correctly, I asked you this question before.

 

[chaosconan]

Reading all the various comments here clearly show how far US consumers have been brainwashed by the major cellular providers.

1. Everybody keep whining about having to pay full price for an unlocked phone. I state this again, unlocked != no subsidy. I repeat my example again, Singapore. The iPhone over there is exclusive on Singtel, sold under contract with subsidy. Is it locked? Hell no. It's unlocked out of the box. There is no logic in provider locking cellphones, other than being anti-competitive. For those that are still defending locked phones, then explain this. Why are pay-as-you-go phones in the US still provider-locked? Pay as you go means no contract, no subsidy, you pay for the phone, yet it's still provider locked? Mind boggling. This is truly anti-competitive behavior, and should be illegal.

2. People are complaining about government have no clue. Free market does work. The cellphone market in the US is NOT a free market. In a true free market, anybody can sell/use any cellphones with any provider. Provider locking is anti-competitive. Want to see an example of free market? Go to Indonesia, and see how the cellular phones market over there. They have malls filled with independent shops selling cellphones. All of them unlocked, per the manufactures' spec. You pick your cellphone, pick your provider, off you go. Simple. Don't like the provider, find another one, use your same phone, SIMPLE! As a result, they have pretty much any high end phones from Nokia, HTC, Sony Ericsson, etc. Oh, by the way, Telkomsel, Apple's partner in Indonesia announced at WWDC, offers MMS and tethering at launch of iPhone 3.0 OS. AT&T? Explain that.

3. People are sensitive with price, thus the brainwashing of paying full price to get unlocked phones done by US providers are working. Go to Asian countries, and you'll see EVERYBODY have a cellphone, even the guy selling crap on the streets. How is that possible? Because unlocked phones result in a TRUE free market.
Example US: You bought an iPhone, then you want to switch phone after the end of the contract. What can you do with the iPhone? Giving it to a family member forces him/her to go with AT&T AND have another contract. Want to sell the iPhone? You have to jailbreak it, which Apple argued that it's illegal. WTF? Technically, you fulfilled your contract, yet the phone is still locked. Example Asia: A rich person has a high-end phone from last year. He/she decided to get the new iPhone. The "older" phone simply goes into a 2nd hand market, where a less rich person can buy older models for cheaper and use them on a network on their choosing, and so on. When the person with the iPhone decided to get a new phone, the cycle continues. No hassles. The network providers have nothing to do with anything. They do what they're supposed to do, simply provide the service. Free market works.

If the US cellphone market is a free market, then why are we so backwards in everything? Why are we still paying for incoming calls/SMS? Why can't AT&T provide a simple service like MMS, while other providers outside the US can? Mind boggling. It's even sadder that there are people defending the backwardness of US providers.

OMG, you are so RIGHT. I was in Singapore on a trip. I personally saw everything you've stated here. I couldn't believe it. Everyone had cell phone. Even little children playing around. I was like asking myself how can everyone have one. After investigating I noticed that they don't lock their phones. And the phones are so cheap. They can switch, replace, buy a new phone over and over and not be tied to anything. Some people kept spare phones just in case they're primary phone broke or something. If it ever broke they just took the chip and put it into their spare phone. Now thats cool. I remember a friend's phone broke and she asked to borrow her friends phone to make a call. lolz. that was so funny. She just switched the SIM and made a quit call and it worked beautifully. She then stopped by one of the stores and bought a new phone and put the SIM into the phone and started using it. She didn't have to call anyone or have to activate anything. Just put it in and start using it. Now that's true PLUG-AND-PLAY. Not like what we have PLUG-ACTIVATE-AND-PLAY.

 

[steamed.hams]

Its amazing how stupid people are here in the US. They just don't understand what this is all about.

THE REST OF THE CIVILIZED WORLD BUYS PHONES FROM RETAILERS AND SERVICES FROM TELECOM COMPANIES. IF YOU DON'T LIKE THE SERVICES FROM ONE COMPANY, YOU SWITCH TO ANOTHER AND YOUR PHONE STILL WORKS. ITS FREEDOM OF CHOICE!

Congress and the administration are doing this right.

TRUE!

 

[yum114]

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)

ok besides visual voice what else am I paying 200 dollar MORE for less talk time then I was paying at T-mobile? Id so much throw VV out the window if I could go back to a 100 dollar bill

 

[ddTaylor]

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.

I agree to a point but in America there are anti-competitive practices that sometimes follow an action such as this. The thing that hurts ATT and even Apple to some extent is the refusal to unlock the phone once the gig is up for ATT and the subscriber opts for another carrier - the same as I did when my iPhone contract expired and I paid to cancel my iPhone 3G contract as a result of lousy quality and slow DATA speeds. I went with Sprint for a better price and comparable - sometimes better call and DATA quality. I save a lot of money over ATT and the Palm PRE is a fine phone - while no iPhone - it offers things the 3GS cannot yet lacks in things the 3GS excels in. The best part of having two phones comparable in technology (3GS and PRE) yet rely on the OS is the bst possible problem for many things can be enhanced via software and changes made.

While I could not STAND ATT - no cell company is great by a long shot - although i I have heard outstanding reports regarding BOOST which is part of Sprint and NEXTEL and given the price it would make for an extremely fantastic plan provided they had decent MMS and SMS phones with good DATA speeds. Th PTT feature means nothing to me but to many it does...the coverage is good but not great from what I hear but the price is second to none and that is the selling point - one that has netted BOOST many hundreds of thousands of new customers last year alone.

I digress from the original post but if more companies offered better pricing and decent phones then government intervention would not be required.

D

 

[cthielen]

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.

You should really read the Tragedy of the Commons thesis. I understand the libertarian "stay out of my business" virtue, but the world is far more complex than that, e.g. read the thesis.

 

[winterspan]

Although I like the idea of abolishing these exclusivity agreements, this would mean *absolutely nothing* for the fragment cellphone technology environment in the United States. AT&T and T-mobile are the only major carriers with GSM/UMTS networks, and T-mobile's (fledgling) 3G network runs on the odd-ball 1700Mhz frequency which most phones, including the iPhone, DO NOT SUPPORT. So even escaping AT&T, you would be stuck with Tmobile and an EDGE-only iPhone "3GS".

In Europe, however, this would be a great gift!

 

[samab]

OMG, you are so RIGHT. I was in Singapore on a trip. I personally saw everything you've stated here. I couldn't believe it.

Don't believe everything on Singapore --- the actual situation is a lot worst.

(1) Singapore based their "no simlock" rule on OLD European regulations (back in the late 80's) --- that even Europe doesn't follow any more.
(2) What's the use of totally unlock mobile phones --- when Singapore has truely mobile telephone number portability only last year. Before last year, it was some kind of weird call forwarding disguise as portability.
(3) This is the truely IDIOTIC part of the Singapore system: they don't allow carriers to give you a free simlocked cell phone (as in everywhere else in the world) when you sign up for their mobile contracts, but they allow carriers to give you a free tv when you sign you sign up for their mobile contracts (see paragraph 7 in the pdf file that I linked). As a consumer, now I have to figure out the real price of a tv (or a microwave oven, or a mp3 player) as opposed to the MSRP stated by the "free gift" in order to do comparison shopping among mobile phone carriers.
(4) Idiotic ETF to get out of mobile contracts (up to $800 as stated in paragraph 10 of the pdf file).

http://www.ida.gov.sg/doc/Policies ...on_Level2/20080622135627/ETCPublicConsult.pdf

 

[aristotle]

The better product?

Well, for a "service" provider the motive would be to provide the better service by providing something that would differentiate themselves from the competition. Taking away the ability to have exclusives robs a service oriented company from being able to differentiate themselves from competitors on something other than price.

I fear that too much government interference would result in a monoculture of services like what you would see in a communist country. Would like like People's Telephone and Telegraph or People's Telephone and Telegraph 2? It would spell an end to innovation in the service space. Why bother trying something new if you have no way to retain a customer base?

 

[aristotle]

And even playing field. No one should be cheating!

Which means that there is no incentive to innovate or work hard. This is similar to what happens when a workplace becomes unionized. Workers are no longer penalized for poor performance and no longer rewarded for exceptional performance.

 

[sgnx]

about damn time

what's more ridiculous is that ATT "reserves" the right to force adding a data plan if they spot any iPhone operating without one...

 

[macintoshtoffy]

Its amazing how stupid people are here in the US. They just don't understand what this is all about.

THE REST OF THE CIVILIZED WORLD BUYS PHONES FROM RETAILERS AND SERVICES FROM TELECOM COMPANIES. IF YOU DON'T LIKE THE SERVICES FROM ONE COMPANY, YOU SWITCH TO ANOTHER AND YOUR PHONE STILL WORKS. ITS FREEDOM OF CHOICE!

Congress and the administration are doing this right.

Look at the countries in the top 5 most 'free' countries according to the Heritage Foundation:

http://www.heritage.org/Index/

1 Hong Kong 90.0 +0.3
2 Singapore 87.1 -0.2
3 Australia 82.6 +0.4
4 Ireland 82.2 -0.3
5 New Zealand 82.0 +1.2

Interesting that the top five have mobile networks that aren't a massive joke. I remember hearing the kinds of things you guys have to put up with; from the lack of a decent EFTPOS and banking network for transactions, the mobile network that covers only part of the country and then has the gaul to demand that both the caller and receiver have to pay for the call (what happens if the call is from a marketing company? what about an SMS from a marketing company? why should I have to pay for that crap?) - talk about a giant joke that keeps getting worse with each decade. Its like watching New Zealand from 30 years ago when shops used to shut at 5:00pm and closed on the weekends - talk about a regressive country both socially and economically the US is becoming.

 

[SleepyHead157]

This isn't going to change my much. Worst case scenario for companies like Verizon and AT&T are they have to give up exclusive right but they'll find a way to make that money in return, they always do.

With that said, I would love to see the iPhone on other carriers, provide some competition. Or at least AT&T should let me unlock the iphone after my contract is up. They did with their previous phones and they should with the iPhone too.

 

[pika2000]

Don't believe everything on Singapore --- the actual situation is a lot worst.

Worse? Compared to the US?
1. All cellphones, even prepaid ones sold by a US carrier are provider locked. None of the carriers provide a clear information how to unlock the phone. In case of the iPhone, AT&T will not unlock it regardless of the situation, even if your contract is done. Even worse, they still force you into a contract even if you bring your own phone.
2. Number portability sounds great, if it works. Even in the US, it doesn't always work smoothly, and you can have services delayed for extended period of time while having to deal with customer service blackhole. Some countries approach this in an easier manner, by having cellphones its own area code. In the end, with upcoming services like Google Voice, and more people being in contact via social networking, switching phone numbers are not as critical as it used to.
3. No free phone. Oh well (knowing UK people can get the iPhone for free). In the US, most free phones are ancient basic phones anyway. At least in Singapore, all the phones are not locked. Besides, there's always second hand market if you're looking for cheaper deals. I rather have an unlocked phone than a "free" phone that are provider locked, negating the "free" cost.
4. Nothing new. Obviously, this is how they balance the subsidy you get with subsidized phones. At least it's fair, since the phone itself is not locked. The contract is just that. Once your contract is up, you're good to go anywhere WITH the phone that you paid for, unlike in the US where providers get double/triple dipping, forcing customers under contract & still locked the phone even if contract is done.

Not saying Singapore is perfect. It's just an example, but definitely a better market than what we have in the US.

 

[marine610610]

Reading all the various comments here clearly show how far US consumers have been brainwashed by the major cellular providers.

Brainwashed? The real brainwashing is thinking the government could do this effectively.

The only anti competitive thing going on here is Apple/ATT not letting you use your iPhone on T-Mobile when, and only when, you have finished your contract or bought it unsubsidized. It is NOT anti competitive to have an exclusive provider, thats just buisness. Apple is just as much about their bottom line as ATT. I HATE ATT, but thats life until their contract is up.

I have worked for the federal government in one capacity or another for 11 years, you DO NOT want them to "fix" anything. Whenever the US gov gets there grubby hands on something they almost always make it worse.

 

[Ping Guo]

Its amazing how stupid people are here in the US. They just don't understand what this is all about.

THE REST OF THE CIVILIZED WORLD BUYS PHONES FROM RETAILERS AND SERVICES FROM TELECOM COMPANIES. IF YOU DON'T LIKE THE SERVICES FROM ONE COMPANY, YOU SWITCH TO ANOTHER AND YOUR PHONE STILL WORKS. ITS FREEDOM OF CHOICE!

Congress and the administration are doing this right.

Thank you!! At least some people get it. (Usually those living outside the US.) It amazes me how American consumers not only deny they're getting screwed, but actually defend and try to justify a system that would be a joke in most of the developed world, a system that gives the consumer less choice and higher prices, but is somehow OK in the States!

As some others pointed out, "free markets" and "freedom of choice" are not synonymous. With no government intervention, you get Robber Barons, anti-competitive practices, and monopolies. The relationship between the consumer and the company providing a service must be regulated, otherwise, the company will squeeze the customer dry and prevent him from exercising his freedom to choose. Which, as it turns out, is what the US telcos do...

The first step is accept that you're getting screwed.

I had a couple contracts with Verizon when I was in my early 20s... awful phones, crappy service, tons of hidden fees and downright shady billing "mistakes". Subsequently I travelled a lot and lived in Europe, West Africa, and China, always buying the newest unlocked phones and taking them with me when I moved, never had a problem. In the US, you don't really own your phone, rather, your provider owns you!

Phone retailers and telecoms should be distinct and separate.

 

[chaosconan]

Which means that there is no incentive to innovate or work hard. This is similar to what happens when a workplace becomes unionized. Workers are no longer penalized for poor performance and no longer rewarded for exceptional performance.

Oh no. What I meant by no cheating is that government or state should not be helping out one company over the other by lobbing tactics. Contracts given out through request for proposal (RFP) process for a supplier or provider should be fair and not tainted. And no common practices like subsidization of one over the the other.

 

[pika2000]

Brainwashed? The real brainwashing is thinking the government could do this effectively.

The only anti competitive thing going on here is Apple/ATT not letting you use your iPhone on T-Mobile when, and only when, you have finished your contract or bought it unsubsidized. It is NOT anti competitive to have an exclusive provider, thats just buisness. Apple is just as much about their bottom line as ATT. I HATE ATT, but thats life until their contract is up.

I think you're confusing your replies with the others, or you just don't read what I posted. I stated that I don't have issues with exclusivity, contracts, and such. What I declare as anti-competitive is provider locking. That should be illegal. Heck, US cell providers are selling no-contract phones at full price that are still provider-locked! Mind boggling.
Would you buy a computer that is locked to Comcast? Would you buy a landline phone that can only be used with QWEST? Why cellphone should be any different?

 

[pika2000]

In the US, ... your provider owns you!

LOL.

 

[fabianjj]

OMG, you are so RIGHT. I was in Singapore on a trip. I personally saw everything you've stated here. I couldn't believe it. Everyone had cell phone. Even little children playing around. I was like asking myself how can everyone have one. After investigating I noticed that they don't lock their phones. And the phones are so cheap. They can switch, replace, buy a new phone over and over and not be tied to anything. Some people kept spare phones just in case they're primary phone broke or something. If it ever broke they just took the chip and put it into their spare phone. Now thats cool. I remember a friend's phone broke and she asked to borrow her friends phone to make a call. lolz. that was so funny. She just switched the SIM and made a quit call and it worked beautifully. She then stopped by one of the stores and bought a new phone and put the SIM into the phone and started using it. She didn't have to call anyone or have to activate anything. Just put it in and start using it. Now that's true PLUG-AND-PLAY. Not like what we have PLUG-ACTIVATE-AND-PLAY.

Well this is just scary, that Americans think that this is cool. In the rest of the world the lack thereof would be outrageous.

 

[entropys]

There seems to be a lot of confusion on this forum, so I thought I would add some more

The reason there is an extended exclusive deal between apple and AT&T. AT&T had apple over a barrel. Apple had no history in the phone market, and verizon had already said no as they wanted to load the phone up with their content crap. So Apple had no-one else they could deal with. So AT&T had them by the short and curlies. I am sure Apple will want out as soon as possible, based on what has happened in other countries.

Countries that do not have an exclusive deal
In other countries, such as Australia, to use an example I am familiar with, you can buy an unlocked iphone from the Apple online store, from a retail apple store, or from the four (soon to be five on the 17th) carriers that also carry plans for the phone. So the scenario is:
a) buy an unlocked phone, pay as you go or a set monthly account from whoever you want
b) buy a locked, subsidized phone from a carrier for twelve or 24 months.
c) buy a locked phone outright in a twelve or 24 month contract that is less than the monthly contract in b.
Both scenarios b and c can be unlocked for suitable, eye gouging fee.
But it is not all beer and skittles. Only one carrier offers visual voice mail. And Aussies had to wait a whole extra year to get hold of an iphone.

Now, some of you yanks might fantasize that the government will wave its regulatory wand and you will get the wonderful system that we have in Australia (which actually isn't wonderful coverage wise, but that is another story). But it will not be. In Australia, all carriers are GSM. In the USA, all four carriers have subtle differences that mean that you will not get the full features of an iphone and the iphone might not even work on that network. BTW the four carriers originally ended up that way as a result of government interference, but I guess most of the posters here were nothing more than a twinkle in daddy's eye or still in their nappies back then.

The result though is that breaking up exclusive deals might not give you the savings you are looking for. A phone optimized for one network will not work as well on another network. So the carriers still get to maintain higher prices through defacto exclusivity. This will only resolve once broader coverage for all carriers is available, using similar technology.

One other thing. Those bragging about the superior EU networks forget that the americans developed their system first, and thus have legacy issues that the EU never had to deal with. That and Euroweenies all live on top of each other. Real countries like the USA and Australia have to deal with distance, low densities (while the USA has high density overall, it is all concentrated in a few cities, the density in most places is low).