Pressure Mounts Over Wireless Deals
CongressDaily's David Hatch writes in TechCentral's latest Issue Of The Week that the iPhone and BlackBerry Storm are at the eye of a political storm in Washington. These and other ubiquitous smart phones have triggered debate over the future of exclusive deals that tether wireless handsets to select carriers. The iPhone is only available on AT&T's network, a problem for consumers outside its coverage area or dissatisfied with its service. The BlackBerry Storm has a similar relationship with Verizon, posing the same set of challenges.
Powerful lawmakers, regulators and watchdogs want to disconnect such deals for good to give consumers more options. "The best handsets are reserved for the largest carriers," complained Harold Feld, legal director for Public Knowledge, an advocacy group that wants to ban these arrangements. For smaller carriers serving rural and less-populated markets, "there's no way they can compete." Critics of the status quo point to Europe and Asia, where many cell phones can be operated on multiple networks and customers switching providers can retain their handsets by using removable SIM cards -- short for "Subscriber Identity Module."
Major wireless carriers that routinely offer handsets under exclusive terms insist the approach spurs innovation by letting them share the risk of introducing cutting-edge products along with manufacturers. "Exclusive handset arrangements have provided U.S. consumers the most advanced devices in the world at distinctly affordable rates," AT&T lobbyist Jim Cicconi argued this month in a letter to Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis. Read more here (subscription required).
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