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19 Jun 2009
The US Federal Communications Commission (FCC) has begun an investigation into exclusive mobile phone carrier deals.
FCC chairman Michael Copps said that the organisation will seek to determine whether consumers are benefitting from the exclusive deals between telcos and device manufacturers.
Such deals often result in a single device being linked with a phone service, requiring users to switch carriers or alter their service contracts in order to purchase popular handsets.
"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," said Copps.
"The FCC as the expert agency should determine whether some of these arrangements adversely restrict consumer choice or harm the development of innovative devices, and it should take appropriate action if it finds harm."
Copps's statement comes shortly after members of the US Senate called telcos to the floor to explain the exclusive deals.
Critics charge that the deals violate consumers' rights to use devices as they see fit, while proponents say that the deals keep service providers competitive with one another, and provide incentives to upgrade and maintain networks.
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Do you agree?
Anti-competitive
There is one reason and one reason only for these "exclusivity" contracts. They force consumers to migrate networks based on the device they want to use, not the merits of the company or network. Carriers state that they subsidize the phone's for x years and this is why they need their 2 year contracts when you get a new phone, but why then does the price of the service not change after the 2 years? Exclusivity contracts should not exist, any device capable of using a given network should be able to (I phone should be able to work on t-mobile as easily att or any other GSM network for example). The carriers should NOT be allowed to sell devices, only the service. The device manufacturers or third-party companies should sell the devices, if you need a payment plan, fine. If the carriers must sell devices, they should be required to not have exclusivity arrangements and should be required by law to state the cost and the amount of the subsidy and remove the "subsidy" cost from your bill after the phone is paid off.
Posted by: Octothorpe 03 Aug 2009
For people who believe in the "Free Market"
The 'free' market that many keep ranting about is a complete joke. Talk to any economist (in academia, NOT someone who is getting paid for their opinion), and they will tell you that regulation is necessary for the economy to function properly. Think of it this way: It needs checks and balances...because the one thing we know about people, is that they are selfish. Do you realize how many people have made large sums of money, by betting on people's debt; as in the foreclosure of homes? By letting people go into foreclosure vs. finding a way for a homeowner to stay in his/her home, loan servicers could write off the debt in their taxes AND sell the debt to an investor for a profit. [try the documentry: "Maxed Out" (2006)]. This is your 'Free Market' run amok. People should not be allowed to make money by WANTING a family to lose their home(s).
Posted by: Brett 03 Aug 2009
really?
What happened to the free market? The government has gotten out of control, making regulations every time someone whines. There's no reason Apple and AT&T shouldn't be able to have an exclusive deal. If the other companies want something like the iPhone, they can make one. Hence all the knockoffs... So what's the big deal?
Posted by: Jack 20 Jun 2009
Freedom
I think that the service contracts are silly. I will pay extra for a phone or get a lower end phone without a contract requirement so I can FIRE a phone company when they make a "mistake"
Posted by: Kowcog 19 Jun 2009