Wednesday, May 21, 2008

Exclusive cell phone deals called into question

On Tuesday, the Rural Cellular Association, a group of more than 80 small and rural wireless providers, filed a petition with the Federal Communications Commission to investigate and adopt rules that would prohibit exclusivity arrangements between wireless carriers and cell phone manufacturers. In its petition the group said that these arrangements were unfair and stifled customer choice. The group also believes these deals decrease competition and violate the 1996 Telecommunications Act.

The most prominent example of such a deal is the Apple iPhone. AT&T has the exclusive right to sell the iPhone, which was introduced first in the U.S. market in June. Neither Apple nor AT&T has publicly said how long the exclusivity arrangement will last, but it's been reported to be at least five years. Verizon Wireless also has an exclusive deal to sell the LG Voyager, another popular smartphone.

The RCA says that some people living in rural areas can't subscribe to service from a big carrier like AT&T or Verizon and are therefore locked out of getting these cool phones.

"It is important that all Americans have equal access to the latest technology, including wireless devices, regardless of where they live or which carrier provides the service," David Nace, counsel to RCA, said in a statement.

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