Heeding Kerry's call, FCC will investigate exclusive cell phone deals

Customers get assistance purchasing the Apple iPhone 3G S at the Apple store in San Francisco. The Federal Communications Commission has begun an investigation into exclusive mobile phone carrier deals like the one between Apple and AT&T.

In the same week Apple launched its latest iPhone, the 3G S, the Cupertino, Calif-company discovered it was being targeted by federal regulators.

Yesterday, the Federal Communications Commission announced it would launch a review of cellular phone exclusivity deals – like the lucrative and longstanding arrangement between Apple and AT&T. At a press conference in Washington, the acting chairman of the Federal Communications Commission, Michael Copps, said his staff would begin work immediately.

"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," Copps said yesterday, according to the Associated Press.

Spurred on by the Senate

Copps' announcement did not come out of nowhere. Earlier this week, Sen. John Kerry and three others on the Senate Committee on Commerce, Science and Transportation asked that the FCC look into mobile handset deals.

“We ask that you examine this issue carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace,” the senators wrote. Among the specific factors they suggested Copps address: “Whether exclusivity agreements are becoming increasingly prevalent between dominant wireless carriers and handset manufacturers.”

The request was penned by Kerry and Sens. Roger Wicker (R-Miss.), Byron Dorgan (D-N.D.), and Amy Klobuchar (D-Minn.). Today, Klobuchar issued a statement saying she was "pleased by Acting Chairman Copps' announcement, and look forward to the learning the results of the FCC's proceeding."


The news is being received even more ecstatically in some corners of the blogosphere. Writing today on PC World's website, David Coursey says he is "jumping-up-and-down-thrilled" at the prospect of an FCC investigation. "At the beginning of cellular, the FCC did consumers wrong by allowing specific handsets to be tightly coupled to carrier networks," Coursey writes. "That lead to handset exclusivity deals that have limited choice and led to customer lock-in. That wrong may yet be righted."

In an interview with Reuters, Ben Scott, policy director at watchdog group Free Press, agreed. "The path to innovation is paved by openness, and unlocking devices is a good start," he said.


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