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FCC To Probe Exclusive Mobile Deals
On Tuesday, we discussed news that four US Senators would be looking into the exclusivity deals between carriers and cell phone makers. Apparently, they didn't like what they heard. Reader Ian Lamont writes with an update:
"The Federal Communications Commission is planning on launching an investigation into exclusive handset deals between mobile carriers and handset makers. In a speech on Thursday, acting FCC Chairman Michael Copps said the 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.' It's not hard to imagine who might be targeted — at a separate Senate Committee on Commerce hearing on Thursday, much of the discussion centered on AT&T's exclusive deal to carry the iPhone. AT&T claimed 'consumers benefit from exclusive deals in three ways: innovation, lower cost and more choice,' but carriers and senators from states with large rural populations disagreed, saying that their customers had no choice when it came to the iPhone — it's not available because AT&Ts network doesn't reach these areas. One panelist also brought up the Carterfone precedent (PDF), which concerned an 'electrical acoustic coupling device' that a man named Tom Carter developed in the 1950s to let field workers make phone calls using a radio transceiver connected to AT&T's phone network. AT&T, which was then a monopoly, claimed no foreign devices could be connected to its network, but lost when it challenged the Carterfone in court. The result spurred innovation such as the fax machine."
The carterfone and that whole line of reasoning has nothing to do with the iphone on competitor networks. I'm not sure what point is trying to be made, like as if the iPhone being able to work on Verizon would lead to some amazing innovation we're missing out on because of an exclusivity deal? I don't think I follow that one. I just don't get it, sorry. It's apples and oranges
In response, Roth argued that exclusive deals enable innovation because the operator and manufacturer share the risk. He suggested that operators will ask manufacturers for certain features on phones but manufacturers will often only do so if the operator agrees to buy a certain number of phones, he said.
Corporate trusts are not supposed to decide what features go into products. That is one of the reasons that anti-trust regulation exists. Picking features and rewarding risk takers is the exclusive domain of the silent hand of the market. If you want to share the risk and get some exposure, then buy corporate bonds or non-voting shares from the handset manufacturer that pleases you. It is not a cartel or lateral monopoly's prerogative to manipulate decisions about product features.
The reason it is not the prerogative of trusts, cartels, or monopolies is because they are worse at it than the free market. Demonstrably so:
Did you notice, for example, that it took a computer company -- that had never had anything to do with cellular -- entering the market to finally get a smartphone that didn't suck into the US market?
Did you notice that the second acceptable smartphone came from a search engine company that had also never done cellular before?
Did you notice that that second smartphone got relegated to a third tier provider because the big boys were too busy sucking each others dicks to be bothered with an innovative product?
Did you notice that prior to the iPhone, America had just about the crappiest phones in the entire first world? Tiny little Taiwan was about a decade ahead of where we would be today were it not for Apple -- a complete outsider to your supposedly "innovative" little idiocracy.
You guys have been using your cartel to sit on your lazy, incompetent asses. Just like the auto manufacturers, except that Southeast Asian companies have a much harder time getting variances for cell towers than you, you fat, lazy fucks, so they haven't managed to kick your ass all up and down like they did to the auto makers.
I understand that you want to dictate features and restrain trade, but as it turns out, the free market(*) is a more efficient solution. So shove your transparent cartel rationalization up your ass and get out of my face.
Well, that's what the Senators should have said, anyway.
* Not laissez-faire, not anarchy: Adam Smith's free market, including regulation of anti-competitive behavior. Go re-read The Wealth of Nations if you doubt me.
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Suggested mod: +5, Sad but true.
What needs to happen is some senators need to get cancer, and have their insurance company deny coverage based on them mis-reporting their weight 15 years prior. We'll see some shit change real damn fast when that finally happens.
Just another "DOJ fascist authoritarian totalitarian bootlicker" -- Zeio
If there's one thing the insurance companies would never be stupid enough to do, and that's screw with someone from Congress.
The world's burning. Moped Jesus spotted on I50. Details at 11.
1. Be able to buy your phone from anybody who sells them.
:)
More stores selling more phones has to lead to lower prices
2. Then choose your carrier.
Kill the link between phone brand & model and the company that provides your service. And for God's sake kill those 2-year contract extensions!
Maybe these Senators are on the right path -
there's a first time for everything.
Maybe exclusive deals should be like drug patents - must expire after some time. Make it 3 years or so.
This has nothing to do with spectrum, and is not the FCC's jurisdiction. The FTC should be investigating this - and in 2006.
(Unrelated - why does my Karma bonus not work any longer? My Karma is Excellent)
They don't pay for insurance coverage... it's just free medical care with highly prioritized and preferential treatment. That's one of the big problems with healthcare -- legislators never see the problem because they never experience it and those who have quickly forget it once they enter that arena.
Senators do get some pretty nasty health problems if you will recall.
I save at least $50 on T-mobile using an iPhone and unlocking it (my wife has one also, so it's a shared plan). ATT has taken advantage of the iPhone to tack on the $30 data plan per phone, which is quite a bit more expensive than most other plans with similar service.
I haven't fully decided if the iPhone penetration has reached a point where the government should be regulating them, but for ATT to argue that their deal really helps make things cheaper is bullshit.
Which is why Congress has a (publicly funded) medical plan, the likes of which the insurance industry will fight to keep away from the rest of us.
We need a law that says: Members of Congress gets the worst plan/deal/discount available.
Have gnu, will travel.
your Government gets a socialized medicine scheme and nobody else does?