The US Senate is looking into the exclusive deals many handset makers have
signed with service providers.
The Senate Committee on Commerce, Science and Transportation has asked
executives from several major handset makers and telecoms firms to testify about
the deals, which lock certain devices into a single provider.
The Committee is looking into whether consumers are being unfairly forced to
sign into certain devices, and whether the deals are hampering service upgrades
in rural and sparsely populated markets.
"I think the Commerce Committee should consider how the wireless industry is
functioning, and whether current practices are in the best interest of
competition and the consumer," said Senator John Kerry.
"At the heart of this issue is this question: is it better or worse for
competition, for innovation, and for the American consumer if the carrier
controls the decision over what devices can and cannot operate on their network?
"
The hearing could lead Congress to take action against locking devices to a
single carrier, a practice which critics claim violates consumer rights and
harms innovation.
The practice is less widespread in Europe, but telcos have recently signed
exclusive deals for products such as the Apple iPhone, prompting several
countries to take action and force the
sale
of unlocked devices.
Operators, however, say that the exclusive deals actually help competition
and drive carriers to improve their networks.
"They increase a carrier's incentives to make purchase commitments, and to
invest in promotions, network improvements and special training of sales staff,
" argued Paul Roth, president of retail sales and services for AT&T.
"They lower manufacturer entry barriers and serve as a key tool to maintain
brand value. And, as an important form of competition, they encourage other
carriers and manufacturers to do better, by improving their own handset
portfolios, or the prices, features and other characteristics of their existing
offerings."
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