Senate to hold hearings on exclusive phone deals

  • Posted: 16 June 2009 12:30 PM

    Cannot these idiots find something better to do at a time when the body to which they belong is culpable in spending a trillion dollars we don’t have.

    From today’s WSJ

    By BEN CHARNY

    Four U.S. senators are urging the Federal Communications Commission to investigate whether cell phone operators that sell phones on an exclusive basis are unfairly restricting consumer choice.

    The senators are asking the FCC to consider, among other things, whether there’s too many of these arrangements between dominant U.S. carriers and handset makers, and if they limit a U.S. customers’ ability to use their phones for certain features.

    The four senators calling for the inquiry?John Kerry, D-Mass., Roger Wicker, R-Miss., Byron Dorgan, D-N.D., and Amy Klobuchar, D-Minn.?didn’t identify what deals they were alluding to.

    AT&T Inc. has an arrangement to exclusively offer the Apple Inc. iPhone in the U.S. Meanwhile, Sprint Nextel Corp. sells the Palm Inc. Pre on an exclusive basis as well. An Apple representative had no comment.

    [...]

    But maybe while the cameras are rolling maybe Senator Kerry could explain just what feature one cannot use one’s iPhone for that it could be used for before the exclusive deal with AT&T.

         
  • Avatar

    Posted: 16 June 2009 12:42 PM #1

    capablanca - 16 June 2009 03:30 PM

    Cannot these idiots find something better to do at a time when the body to which they belong is culpable in spending a trillion dollars we don’t have.

    From today’s WSJ

    By BEN CHARNY

    Four U.S. senators are urging the Federal Communications Commission to investigate whether cell phone operators that sell phones on an exclusive basis are unfairly restricting consumer choice.

    The senators are asking the FCC to consider, among other things, whether there’s too many of these arrangements between dominant U.S. carriers and handset makers, and if they limit a U.S. customers’ ability to use their phones for certain features.

    The four senators calling for the inquiry?John Kerry, D-Mass., Roger Wicker, R-Miss., Byron Dorgan, D-N.D., and Amy Klobuchar, D-Minn.?didn’t identify what deals they were alluding to.

    AT&T Inc. has an arrangement to exclusively offer the Apple Inc. iPhone in the U.S. Meanwhile, Sprint Nextel Corp. sells the Palm Inc. Pre on an exclusive basis as well. An Apple representative had no comment.

    [...]

    But maybe while the cameras are rolling maybe Senator Kerry could explain just what feature one cannot use one’s iPhone for that it could be used for before the exclusive deal with AT&T.

    I might agree with them if VZ and ATT didn’t use different cell standards.  rolleyes

    But even then, exclusive deals allows for cell company differentiation in a very competitive market.

    Signature

    “Once we roared like lions for liberty; now we bleat like sheep for security! The solution for America’s problem is not in terms of big government, but it is in big men over whom nobody stands in control but God.”  ?Norman Vincent Peale

         
  • Posted: 16 June 2009 01:24 PM #2

    The exclusive deal between AT&T and Apple was paramount when Apple was receiving a percentage of the monthly service revenue and 3G coverage was nearly non-existent outside of major metropolitan areas.

    The revenue sharing arrangement was based on the model of enterprises receiving discounts on services from large volume cell contracts. Rather than a reduction in monthly contract costs, Apple received via of a sharing of revenue for customers it brought to AT&T via of the iPhone. That revenue sharing arrangement expired on new contracts with the release of the 3G iPhone and and the new subsidy arrangement. As far as I know, only revenue sharing that remains is on original iPhone contracts for phones purchased by consumers at full retail cost.

    3G coverage is now far more expansive than when the iPhone was first made available for purchase. The exclusive deal was also needed to make carrier investment in certain iPhone features such as visual voice mail more attractive. The need for exclusive deals (other than to protect margins and avoid carrier price wars) is no longer paramount IMHO. Witness, too, the delays in AT&T adding some of the new iPhone features to its services.

    Beyond that, hearings mean nothing more than hearings. Even if it becomes the will of the Senate to end such relationships, it would require action of both houses of Congress and at least the tacit approval of the president. There’s a long way to go from hearings to successful legislation and the president’s signature.

    By the time an issue like this works its way through Congress, Apple’s exclusive relationship with AT&T may already be at an end.

         
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    Posted: 17 June 2009 10:31 AM #3

    This is called extortion. These politicians couldn’t care less about cell phone features made available by the carriers, but they do care about the money, contributions and favors that they can extort from business. This is something that has been played out hundreds of times before and the politician always wins.


    :apple:

         
  • Posted: 17 June 2009 02:17 PM #4

    MacCube - 17 June 2009 01:31 PM

    This is called extortion. These politicians couldn’t care less about cell phone features made available by the carriers, but they do care about the money, contributions and favors that they can extort from business. This is something that has been played out hundreds of times before and the politician always wins.

    Congressional action or not, we won’t see another 5-year exclusive deal. If I were AT&T, I’d be promoting the new iPhones as aggressively as possible to lock customers into new two-year deals, cross-marketing other products and services and preparing to compete on price for services when the exclusive arrangement inevitably comes to an end.

    In other words, due to carrier desires for the iPhone, the hearings may be a moot point. AT&T now needs Apple much more than Apple needs an exclusive arrangement with AT&T.