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

[haravikk]

I hope something happens with this. Fair enough if some carriers can't sell the iPhone because it doesn't support their network properly (not because it's "locked"), or carriers that offer the iPhone with some features disabled MUST make it clear to the user up-front.

I'm sick of having a particular phone be only offered by one carrier, as it just makes me more inclined to stick with what I have than buy that new phone. With more carriers we'd hopefully see more competitive pricing, and maybe even Apple dropping some of the ludicrous mark-up on the iPhone.

 

[cameronjpu]

It scares me to think that there are people posting in this thread that thing what Apple and AT&T have is good thing.

No one is saying that it is a "good thing" for us. But companies having the ability to do business free of government second guessing their choices is definitely good for us. And as two private, non monopolistic companies, ATT and Apple should be free to shake hands and agree to whatever deal they want with each other. It hurts no one except those who willingly choose to deal with them, which pretty much by definition means that those people aren't hurt.

 

[Sakura Eclair]

The Contrcact length is at issue here

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.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

Actually I do feel that iPhone has put this issue in front of everyone and mostly due to the time of exclusitvity it has with AT&T.

While this practice of signing to exclusive contracts a new "hot" phone (remember the Razr?) these contracts have usually lasted between 6 months up to a year, but not longer than that. In the case of the iPhone it seems to run at least 3 years exclusively with AT&T.

If the original iPhone or the iPhone 3G be made available to other carriers (Metro PCS, Cricket, T-Mobile, etc), then this would not be an issue.

Even the Pre seems to be headed to Verizon next year, so Sprint's exclusivity might not be too long. Only the iPhone and the AT&T-Apple agreement will put to a heavier scrutiny IMHO.

 

[sam10685]

Bring the iPhone to T-mobile of America-- I'll buy it instantly. ...AT&T ******s.

 

[WickedRabbit]

Although this would be cool to see all handsets available to all carriers, don't expect much, if anything from this. Manufacturers would still have to support it and given that CDMA and GSM requires two devices to be built instead of one (CDMA devices, for example, are typically slightly thicker/heavier than their GSM counterparts, but you get better battery life on CDMA as opposed to GSM) all that will happen is that an "exclusive contract" would no longer exist and instead manufacturers will just take sides and choose who they want to make their devices for.

Seeing as how the world is on GSM and only Verizon/Sprint and literally a few other small countries around the world use CDMA, don't hold your breath on a lot of companies jumping to CDMA. Why do you think Verizon is making a push towards LTE? It's because they know that CDMA - while offering major advantages over GSM - is ultimately hurting their business because the majority of handset manufacturers would rather make one device that they can ship to the majority of the world instead of having to make an entirely seperate device to give to only a few select companies.

It's the same reason that not too many companies are supporting T-Mobile's 3G network because it runs off a unique 1700mhz frequency that no one else but T-Mobile uses (in other words, requires a unique device to be built just for T-Mobile).

This investigation won't get rid of exclusive agreements because then other industries would jump in on the bandwagon (videogames, etc.) and I'm sure the government doesn't want to start "dictating" all of the various industries.

For those that want a Verizon iPhone, Verizon's jump to LTE is more likely to push Apple in to doing a deal with Verizon. For those wondering, Verizon was originally the first choice Apple went with, but Verizon declined the agreement because Apple didn't want any Verizon branding or Verizon branded services on the iPhone (no Vcast, etc.) and that's how Verizon makes their money. They weren't willing to agree. As you can tell, AT&T was willing to agree to this deal and there is no AT&T branding or AT&T branded services on the iPhone, but they exist on every other phone.

 

[normang]

Never Ceases to Amaze Me

The complete and utter ignorance of people that believe that somehow the government is actually going to solve a problem in a way that actually works just never ceases to amaze me. The government should just stay out of it and let the market decide and work it out for itself.

How many times does the government have to step in and try and "fix" something that more times than I can count made it worse. far worse than if they left it alone. In actuality, name something that the government has actually fixed in recent history?

This is just more bad news; and for those of you who are so short sighted to think that somehow government is going to make the iPhone appear on your carrier of choice, without making it more expensive, or more difficult has their head in the proverbial sand.

And for those of you that whine the loudest about the poor coverage in your area, chances are if you looked at a coverage map. you might have known this up front and elected to go a different way. Even if the map didn't accurately point this out for you, there are people on every service in existence that winds up living, working, or going some place that does not have cell coverage or good cell coverage, so get over it.

 

[dnguyen]

competition is good!!!

 

[gsfgf]

It scares me to think that there are people posting in this thread that thing what Apple and AT&T have is good thing.

It scares me to see how many people are willing to forgo the ability to freely make a contract, which is a basic element of free market capitalism, over a cell phone.

btw, to everyone talking about monopolies, one monopolizes a market, not a product. If you don't want to deal with ATT, you don't have too. There are plenty of providers out there. If ATT doesn't satisfy enough customers, they will feel it in their wallets and either change their ways or fail. Sure it sucks to pay to end a phone contract, but you signed the contract, so you have to follow it. That's how a contract works.

 

[corinhorn]

Who said anything about a free market? Isn't the term "free market" an oxymoron anyway?

No.

 

[iphones4evry1]

so when Nike partnered with Michael Jordan and made a line of shoes, the government should have stepped in and said "shame on you. now people who like reebok better, cant walk around in shoes with MJs name plastered on them!!! you (MJ) must enter into and agreement with ALL shoes makers to make a line of shoes or none at all."

Nike and MJ making shoes together doesnt keep other shoe manufacturers out of the market or from entering the market. if anything it forces other manufacturers to find NEW and BETTER ways to stay competitive, which DOES benefit the consumer.

I don't ever recall having to enter into a two year contract for a pair of shoes, paying a "monthly service fee," and being charged a "roaming fee." Have you?

I like the example someone had above: If McDonalds has an agreement with CocaCola and only sells CocaCola, I can get in my car, drive somewhere else and buy a Pepsi. If I walk into an Apple Store and buy and iPhone and they say "we only sell AT&T service," I can't just get in my car and drive elsewhere and buy service for my iPhone.

 

[SandynJosh]

Finally a sign that someone in the US government is thinking a bit. The exclusive carrier deals have absolutely nothing that would benefit the customer. Nothing.

Those who say there's something good about exclusivity should think for a moment.

This site has been full of people who are in favor of more competition to the iPhone from other manufacturers; claiming competition is a good thing.

Competition arises out of each company seeking a competitive advantage. That advantage is rooted in some kind of difference over the competition. If the government were to deny a company the right to maintain that difference then what's the point of free enterprise?

The government created the piecemeal situation of carriers we have today, so if you could have better coverage in your area through Verizon or Sprint, it's not AT&T's fault. What the government is trying to do, once more, is fix a problem it created in the 1970's through further meddling in the communications market.

If you took one look at the investment AT&T has made and is committed to making to have the fastest, largest network of towers in the USA, and at the same time complain how much it costs you to use that network, you'd be darn happy at how little it costs you to be part of it.

If the other carriers were to make the same investment to upgrade their speed and coverage then they might have a basis for feeling left out of the exclusivity because their system could handle the load and provide the speed. However, then you'd be paying more per month for the service as well.

Nothing comes out of thin air without an infrastructure, and those that use the infrastructure will pay for the greater speed and load they put on it.

While I use Verizon because AT&T is weak in my area, and I'd LOVE to have Verizon and an iPhone here, there is no reason to think they will be upgrading my area anytime soon to have the load capacity and speed that will be required to support what the iPhone will require.

In the overall picture of things, the iPhone/AT&T alliance makes the most sense for the next year or so. I suspect it will make less sense as the other carriers, who may be strong in certain markets where AT&T is weak, and who upgrade their infrastructure to support the iPhone.

The infrastructure has to be in place first, or the customers who buy a iPhone or other data-hungry phone, will be ill-served. It was apparent that even AT&T with it's superior infrastructure was sorely tested in some markets with the load the iPhone put on it's infrastructure when it first hit the market. While we'd all love to sport an iPhone today, that functions to it's maximum potential anywhere we are, such a thing is going to evolve along with the infrastructure, not because the Justice Department decrees it.

 

[windywoo]

No one is saying that it is a "good thing" for us. But companies having the ability to do business free of government second guessing their choices is definitely good for us. And as two private, non monopolistic companies, ATT and Apple should be free to shake hands and agree to whatever deal they want with each other. It hurts no one except those who willingly choose to deal with them, which pretty much by definition means that those people aren't hurt.

It hurts all those who want an iPhone but don't want to be tied to one provider. Do you really think that Apple and AT&T do it for the benefit of the customer? Tying a phone to one provider is like letting a car run on only one type of road.

 

[nkawtg72]

Yes, it could easily, since the only real competition Microsoft face in the OS market is Apple who refuse to sell their OS separately, and Linux which the average user replaces with Windows if they get it on their netbook.

On topic, I find it frankly idiotic that Apple have been allowed to get away with tying their iPhone to one provider only. In America you seem to have backwards phone companies, barely beyond two tin cans and string, but in Europe we have 3G all over, and yet the iPhone is tied to one operator only in most countries. The only reason for a company to tie the iPhone to one operator only is so they can charge more for the privilege, e.g. paying extra for tethering. This is exploitative and insulting to customers. The options are, pay ungodly sums or no iPhone. Thats not really a choice is it, that's more like laughing in your face.

id be careful about saying how much better europe is at doing things. that is debatable, and not a suitable topic for this forum, so ill leave it at that.

that said though. apple has the right to sell their product for whatever price, and through whoever they want to. just because i cant afford one, or dont like shopping or doing business with the company they choose to sell it through, doesnt make it wrong.

id like to own a McLaren F1. it costs over 1 million $$$. should the government step in and say its not fair to price it that high, or like a lot of cars out there, not sell it in North America?!

it's called Capitalism and a Free Market economy for a reason. Neither of which is a product of Communsim, which in a case like this would have interfered and dictated who could make what, how much it had to sell for, where it could get bought, and who should be allowed to buy it.

 

[corinhorn]

I don't ever recall having to enter into a two year contract for a pair of shoes, paying a "monthly service fee," and being charged a "roaming fee."

The poster was talking about exclusive business deals, not questionable wireless practices.

 

[AidenShaw]

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.

It's ridiculous that you have an Iphone, in my opinion.

At least for me, "works at home" would be such an important feature that I would not buy any phone without it!

 

[NoExpectations]

what they should be looking into are the contracts the carriers are requiring consumers to sign in order to get service. when the consumers aren't happy with the service provided, they DON'T have a choice to leave and go elsewhere without pay huge fees.

Then don't sign a contract....and pay list price for your cell phone.

 

[solarguy17]

This whole "TWO year contract" thing didn't start until about three years ago. Before that, it was only a 12 month contract, and before that there were no contracts. I know because I had my first cell phone back in 1996. My monthly fee was $29.99 and the tax was only about $1.00 per month.

where did you sell cell phone at??? Lambodia?!?!?

In 2001 I sold vz for RS and we always had 1 &2 yr options. We alwaystried to convince ppl to go with the. 1 yr btu the 2 yr with no activiation fee was always an option. In fact I think Cingular or att had 3 yr contracts!!!

And the cheapest plan was only local (your county and maybe the donut counties) with no LD with 200 day, 2000 n&w for $30.

But it was alwAys contracted.

 

[steamed.hams]

I really hope that this investigation leads to more power in the consumers' hands.

 

[iphones4evry1]

And for those of you that whine the loudest about the poor coverage in your area, chances are if you looked at a coverage map. you might have known this up front and elected to go a different way. Even if the map didn't accurately point this out for you, there are people on every service in existence that winds up living, working, or going some place that does not have cell coverage or good cell coverage, so get over it.

How long have you been employed by AT&T? Do they teach you to say that?
If people want an iPhone, they have no other choice. If they live in an area where AT&T has poor coverage and can't get an iPhone on another network, and have to buy from a different service provider, then this hurts Apple's sales and is harmful to Apple.

 

[AbSoluTc]

I can't believe some of the analogies I am hearing in this thread. Lol. Does anyone realize that once phones are NO LONGER exclusive to the carrier - the price goes UP! Who do you think subsidizes the cost? Lol. The GOVERNMENT? What a joke. There is nothing wrong with one carrier having one phone and not another. Nothing wrong with exclusive agreements. Nada.

If you want the iPhone - you go with AT&T. If you don't like AT&T, you don't get an iPhone. It's that simple. All the damn whiners the past few years is getting absurd. Not to mention the GOVERNMENT needs to stay the HELL OUT OF THE PRIVATE/PUBLIC sector and focus on getting rid of the trillions of dollars of debt they just made and you know - regular duties. I guess people think the government dipping their fingers in all the pies is a good thing? Don't think so. We are on a fast track to becoming a socialist society. If you can't see that your freaking blind.

LEAVE WELL ENOUGH ALONE damnit! If you don't like AT&T stop bitching and whining and go with one of the other 3 carriers.

 

[dgcaste]

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.

carriers are already charging the most they can get away with. it's not a matter of hiking up prices. if they could have done this in the past and made more money, they would have. however, if they all raised prices at the same time, that could be collusion, which is illegal, and THEN they'd be in some deep poo

 

[corinhorn]

If people want an iPhone, they have no other choice.

Sure they do, they can choose not to get one. Wanting something does not mean you are entitled to it.

 

[rdowns]

I can't believe some of the analogies I am hearing in this thread. Lol. Does anyone realize that once phones are NO LONGER exclusive to the carrier - the price goes UP! Who do you think subsidizes the cost? Lol. The GOVERNMENT? What a joke. There is nothing wrong with one carrier having one phone and not another. Nothing wrong with exclusive agreements. Nada.

If you want the iPhone - you go with AT&T. If you don't like AT&T, you don't get an iPhone. It's that simple. All the damn whiners the past few years is getting absurd. Not to mention the GOVERNMENT needs to stay the HELL OUT OF THE PRIVATE/PUBLIC sector and focus on getting rid of the trillions of dollars of debt they just made and you know - regular duties. I guess people think the government dipping their fingers in all the pies is a good thing? Don't think so.

Pretty much agree with you up to here. The govt. has no business in this issue.

We are on a fast track to becoming a socialist society. If you can't see that your freaking blind.

LEAVE WELL ENOUGH ALONE damnit! If you don't like AT&T stop bitching and whining and go with one of the other 3 carriers.

Totally lost me here. These socialist country arguments are just ridiculous.

 

[dgcaste]

I can't believe some of the analogies I am hearing in this thread. Lol. Does anyone realize that once phones are NO LONGER exclusive to the carrier - the price goes UP! Who do you think subsidizes the cost? Lol. The GOVERNMENT? What a joke. There is nothing wrong with one carrier having one phone and not another. Nothing wrong with exclusive agreements. Nada.

If you want the iPhone - you go with AT&T. If you don't like AT&T, you don't get an iPhone. It's that simple. All the damn whiners the past few years is getting absurd. Not to mention the GOVERNMENT needs to stay the HELL OUT OF THE PRIVATE/PUBLIC sector and focus on getting rid of the trillions of dollars of debt they just made and you know - regular duties. I guess people think the government dipping their fingers in all the pies is a good thing? Don't think so. We are on a fast track to becoming a socialist society. If you can't see that your freaking blind.

LEAVE WELL ENOUGH ALONE damnit! If you don't like AT&T stop bitching and whining and go with one of the other 3 carriers.

Please don't make a fool out of yourself, speaking about things you don't understand. Stopping private companies from monopolizing individual markets is good for consumers as well as other companies that are trying to compete, but can't, because of unfair competition.

fair competition and fair markets will drive down the cost of cellular services. if you don't want this, then you're the one that's blind.

go be a concern troll on some AOL forum please.

 

[Glial]

I guess that whole "getting government involved in business is a bad thing" hasn't sunk in quite yet.