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Senators To Examine Exclusive Handset Deals

kdawson posted more than 5 years ago | from the baby-steps-toward-openness dept.

Government 234

narramissic writes "Based on a request that a group of rural operators sent asking the FCC to examine the practice of handset exclusivity, four members of the Commerce Subcommittee on Communications, Technology and the Internet sent a letter to the FCC expressing their concern. Small operators, like U.S. Cellular argue (PDF) that 'exclusive handset contracts divide wireless customers into haves and have nots.' But nationwide operators, including Verizon, maintain (PDF) that 'in the absence of exclusivity agreements, wireless carriers would have less incentive to develop and promote innovative handsets.' The Commerce Committee expects to hold a hearing on the issue tomorrow."

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Binding Contracts. (0)

Anonymous Coward | more than 5 years ago | (#28356503)

" Small operators, like U.S. Cellular argue (PDF) that 'exclusive handset contracts divide wireless customers into haves and have nots.' But nationwide operators, including Verizon, maintain (PDF) that 'in the absence of exclusivity agreements, wireless carriers would have less incentive to develop and promote innovative handsets.'"

So I can use a U.S. Cellular phone under contract in any other compatiable network?

Re:Binding Contracts. (5, Informative)

hedwards (940851) | more than 5 years ago | (#28356725)

That's not at all what they're complaining about. They're complaining about the fact that they couldn't make iPhones and other sought after phones available to their customers. Basically they're stepping in for the consumer in this instance, which is common for smaller competitors to do, to try and get a piece of the action. Which is necessary for a competitive market. Not that an individual phone which is paid for largely or entirely by subsidy be allowed to break the contract with no consequence. Just allow for any company that wishes to offer the subsidy the opportunity to do so.

Re:Binding Contracts. (4, Interesting)

Brickwall (985910) | more than 5 years ago | (#28357083)

I used to work for a cellular carrier in Canada. When wireless data was introduced, there were quite significant technical differences between the devices. Trying to adapt our network to support all the devices was quite impossible - it would have cost way too much, sucked up engineering resources we needed elsewhere, and because of the testing needed to ensure there were no incompatibilities, delayed product introduction, giving our competitors an advantage.

It made a great deal of sense to select one or two devices, get them to agree to an exclusive contract, which would include us paying to promote their devices, and get the product to market. I don't see this situation being any different. It helped both us as a network provider, and them as a device provider. I don't see this as a conspiracy to restrict trade, just common business sense.

And, on an unrelated note, could anyone tell me why the HTML "li" code now works erratically? Is there another code that just gives me a simple new paragraph?

Re:Binding Contracts. (1)

Shadow of Eternity (795165) | more than 5 years ago | (#28357239)

You can set your formatting style to plain text and just hit enter.

Re:Binding Contracts. (1)

sabernet (751826) | more than 5 years ago | (#28357265)

"I used to work for a cellular carrier in Canada."
.
.
Congratulations on escaping from your evil overlords. If it wasn't for the "used to" part, I'd have suggested you'd be better typing that as Anonymous Coward ;)

Re:Binding Contracts. (5, Informative)

FeriteCore (25122) | more than 5 years ago | (#28357267)

I'd suggest trying <p> if you aren't creating a list.

Re:Binding Contracts. (4, Interesting)

yamfry (1533879) | more than 5 years ago | (#28357289)

Maybe the cellular carrier in Canada could have used some of its profits from charging some of the highest prices in the western world [thomaspurves.com] [article is a bit dated, but still accurate] for wireless services to hire adequate engineering resources to help their networks function with new technology and allow interoperability. Instead of investing in resources to improve network speed and capacity, they abuse monopoly power to amass profits and engage in rent-seeking behaviour. I'm not blaming you personally, of course. But saying that a wireless company with significant government-granted monopoly power, grants, and tax cuts is locking in devices because making things work is too hard is a little disingenuous.

Re:Binding Contracts. (5, Interesting)

Brickwall (985910) | more than 5 years ago | (#28357457)

I don't disagree about the high prices; I remember the VP Marketing tell me, in no uncertain terms, "Our basic policy is we never discount minutes".

But you underestimate the challenges we faced after introduction (this was about 20 years ago). The collective genius of marketing predicted the number of subscribers as "X"; when it turned out to be "3X", every other division of the company was scrambling. There weren't enough people in customer service to handle all the complaints, so we got a reputation for lousy service. There weren't enough cell sites so the engineers were working 60 hours to provision and tune them. The billing system was from Cincinnati Bell, and they didn't give us source code. I was the technical liason from Marketing to these other departments. When the upper crust of Marketing decided we needed to add a new billing plan, they would send me down with the admonition "They'll try to give you some excuse about not having source code; it's just their way of stalling". So even though we were getting lots of customers, our costs with all the overtime, rush fees, etc., were very high. We had to rebate a lot of calls because they dropped part way through. And the sales people were allowed to give out "non revenue" lines to clients (read "friends"); when they finally audited that, they were astonished to find that we had given out over 20,000 non-rev lines in Ontario alone - that was about 1 in 8, IIRC. In that environment, trying to adapt to new equipment was, shall we say, problematic. I recall one occasion when I was trying to find the status of the integration of voice mail/paging system, the engineer in charge saw me in the switch room and literally ran away.

Still, it was a tremendous education in how not to run a business. I left after 18 months much wiser.

Re:Binding Contracts. (0)

Anonymous Coward | more than 5 years ago | (#28357315)

And, on an unrelated note, could anyone tell me why the HTML "li" code now works erratically? Is there another code that just gives me a simple new paragraph?

How about the "p" tag?

Re:Binding Contracts. (2, Funny)

socsoc (1116769) | more than 5 years ago | (#28357427)

And, on an unrelated note, could anyone tell me why the HTML "li" code now works erratically? Is there another code that just gives me a simple new paragraph?

On a similarly unrelated note, can anyone tell me why throwing candles lit by matches at my Stouffer's frozen meal isn't warming it up? Is there a proper industry standard for doing something simple that I have completely missed out on?

Re:Binding Contracts. (1)

Brickwall (985910) | more than 5 years ago | (#28357481)

Very droll. The issue is I used to use "li" all the time, and it worked perfectly fine. Now, sometimes it gives you one line, sometimes none, and sometimes two. See my sig for my reaction.

Re:Binding Contracts. (3, Insightful)

Fallen Kell (165468) | more than 5 years ago | (#28357547)

And, on an unrelated note, could anyone tell me why the HTML "li" code now works erratically? Is there another code that just gives me a simple new paragraph?

"BR""BR" (replace "'s with angle brackets)

As for your statement about when data was added to the wireless networks. I can understand that happening in the beginning. In the beginning there were no data standards. There were just a bunch of different companies with different handsets which sent data all in different ways. But, now there are these things called standards. Like GSM, GPRS, HSDPA, CDMA, 2G, 3G, EDGE, 3.5G, 1xRTT, and EV-DO. And many phones support multiple standards or can be configured to support a specific standard. All that should matter now is what standard your cellular network supports and that is it. ANY phone that happens to support that standard should be allowed to be used. It doesn't matter if you are AT&T, Verizon, or Joe's Fancy Wireless... If they all happen to use 3G, then any phone that supports 3G should be allowed to be purchased and used on that carrier, because they are just that, a carrier. They are selling access to a network service. They are not and should not be the gatekeepers of what device is allowed on that network as long as it follows the communications standard (just like the internet providers, and cable TV networks, they can not say that only Comcast Cable users can purchase the 70" Sony XRB8 OLED LCD TV, and if you want to use that TV to watch DirectTV satellite, well FU).

The cellular companies are a carrier and service provider who provides a wireless access for phone and data. They should be held to the same requirements as other providers of services in which the hardware that connects to the service is freely usable by anyone on any provider that has a network which supports the same standards that the hardware supports.

Re:Binding Contracts. (4, Informative)

dougsyo (84601) | more than 5 years ago | (#28356929)

US Cellular appears to be a CDMA network from my spot-checks, so they couldn't use a stock IPhone on their network if they wanted.

That's part of the battle right now - even US GSM phones from T-Mobile vs ATT aren't 3G-compatible, nor compatible with CDMA networks (Verizon, Sprint, US Cellular).

Doug

Re:Binding Contracts. (1, Informative)

Anonymous Coward | more than 5 years ago | (#28357299)

You are correct, USCC is running on CDMA rather than GSM. It doesn't mean that a version of the iPhone with a different radio couldn't be developed.

I happen to live in an area serviced by the big 4 carriers as well as USCC and thought long and hard about choosing a smart phone from USCC or an iPhone from AT&T. I ended up with an HTC Touch Pro simply because I was unwilling to suffer with AT&T's poor coverage in NE Wisconsin. AT&T has no reason to deliver 3G due to fact that it isn't cost effective to deploy it in the area I live in, simply due to lack of population. To be fair, USCC still only supports CDMA 1x in my part of Wisconsin, but they at least have some plan to deploy EVDO, which is significantly faster than CDMA 1x.

I have to agree with the RCA for the most part. I think that carriers should not have exclusivity with regard to mobile devices; at least not of multi-year proportions. Carriers should not differentiate themselves by what handsets they offer, but rather the quality and performance of the service they provide. If we were to rate carriers by the this standard, perhaps they would improve coverage areas as well as customer service related issues. I'm certain that a fair amount of readers would have some good stories to tell about poor coverage and poor customer service from their wireless carriers.

Re:Binding Contracts. (3, Insightful)

FictionPimp (712802) | more than 5 years ago | (#28357497)

So Apple can't choose which market to develop for? For example if they decided not to make a CDMA phone, would you rather the government force them to?

I think locking a phone out of contract should be illegal. But locking a phone to a carrier while in contract is fine with me. They are subsidizing my phone, so they should have rights to keep me using it on their service only until I "pay it off".

Don't get me wrong, I'd love to have an G1 with AT&T. But I think it's the phone manufactures right to make exclusive agreements with carriers as long as I can take the phone to any network compatible provider after my contract has been for-filled.

I do think the line "wireless carriers would have less incentive to develop and promote innovative handsets" is a bunch of bullshit though. I can't see AT&T putting a huge budget into developing phones. I would suspect LG, apple, etc are using their own R&D money then recouping it with exclusive contracts.

There are other ways to compete besides phones. You could stop charing for text messaging, stop the per minute billing, start providing features that all US carriers are currently hating on (tethering?). Hell you could of jumped on the open source bandwagon and backed something like open moko.

It seems to me they don't want to compete, they want to bitch and make the competition less competitive.

Re:Binding Contracts. (5, Insightful)

Qzukk (229616) | more than 5 years ago | (#28357079)

wireless carriers would have less incentive to develop and promote innovative handsets

I'll buy "promote" but when was the last time a wireless carrier ever "developed" a handset? And no, I don't count taking a good handset someone else made and crippling all of its features with a shitty firmware overwrite that turns the phone to crap.

Carriers != Manufacturers (5, Insightful)

Anonymous Coward | more than 5 years ago | (#28356523)

'in the absence of exclusivity agreements, wireless carriers would have less incentive to develop and promote innovative handsets.'

I wasn't aware that the carriers were in the business of manufacturing...

Re:Carriers != Manufacturers (4, Insightful)

toppavak (943659) | more than 5 years ago | (#28356575)

Maybe not directly, but carriers do dictate and direct a lot of handset development. Really its the "promote" part of that statement that matters- Verizon puts a lot of money into marketing the BBerry Storm, AT&T helps market the iPhone etc. The argument is that without exclusive handsets there's less motivation to do this. There is some truth to that argument, but a more open ecosystem when it comes to mobile phones in the United States can only be a good thing for consumers.

Re:Carriers != Manufacturers (0)

Anonymous Coward | more than 5 years ago | (#28356651)

The inequality still holds. Manufactures should be doing the promoting. Notice how Apple promotes the iPhone. RIM should start promoting its own products. Same for Nokia, SE, etc. etc.

Re:Carriers != Manufacturers (5, Insightful)

shawn(at)fsu (447153) | more than 5 years ago | (#28356663)

If the carrier doesn't market the phone then the manufacture will. These manufactures do just well in non US markets, in fact I doubt it would hurt the manufacture at all.

Re:Carriers != Manufacturers (5, Insightful)

davester666 (731373) | more than 5 years ago | (#28356683)

Well, if they couldn't strike these handset deals, the carriers might have to...focus on their damn networks...

Because right now the carriers seem to just be playing lip service to their networks.

Oh, you want an iPhone, but AT&T has a crappy network in your area. Right now, AT&T has a negligible incentive to upgrade their network in your area, but you have to take their network in your area to get the iPhone. If it weren't exclusive, AT&T might actually improve their network if they see a large group of people remaining on T-Mobile and using the iPhone instead of having a small group switch to AT&T anyways.

And just maybe MMS and Tethering might have been possible for the past year if AT&T wasn't able to dictate to Apple that they couldn't be used.

Re:Carriers != Manufacturers (1, Informative)

afidel (530433) | more than 5 years ago | (#28356877)

Uh, AT&T's network is substantially better than T-Mobiles in all but the most crowded of markets (AT&T is too successful for the amount of bandwidth they have in a few markets). They also use GSM which makes them better for international travelers than Verizon (though Verizon now offers Blackberry's with a GSM radio). I've found everyone elses network to be crap unless you are in a very rare circumstance (I have a friend that lives on the edge of AT&T and Verizon coverage zones but has good coverage through Alltel). Also you can buy unbundled iPhones from Apple, they are simply expensive ($499 for the 8GB 3G - $699 for the 32GB 3Gs.) but I'm not sure about the ability to unlock it as it says it's designed only for AT&T's network (untrue since it's a GSM device that's sold internationally on all sorts of networks).

Re:Carriers != Manufacturers (1)

Sparr0 (451780) | more than 5 years ago | (#28357067)

AT&T has no cells in the MARTA train tunnels in Atlanta. Every other carrier does. That alone is enough that I am switching services next time I want a new phone.

Re:Carriers != Manufacturers (3, Funny)

Anonymous Coward | more than 5 years ago | (#28356689)

AT&T helps market the iPhone

Yeah! Where would Apple be without the PR geniuses at AT&T helping them to market their latest toys?

Re:Carriers != Manufacturers (0)

Anonymous Coward | more than 5 years ago | (#28356879)

Only in the USA. Here, in New Zealand, the inovative handsets are pushed by people like "Nokia", "Sony Ericisson" and suchlike - by the manufacturers, NOT by the network providers.

Down the road from where I work, for example, is Nokia Care. Nokia themselves have a presence here in NZ.

Samsung advertise on TV, as do Sony. The networks hardly push the phones, selling more the contracts and connections and what phones they do sell. The iPhone is marketed - as much as it needs to - by Apple New Zealand, not by Vodafone.

Re:Carriers != Manufacturers (0, Flamebait)

Anonymous Coward | more than 5 years ago | (#28357125)

Oh, yes... but wait... who cares?

Re:Carriers != Manufacturers (1)

Jane Q. Public (1010737) | more than 5 years ago | (#28356935)

There would be less motivation for the carriers to develop or promote innovative handsets, but a lot more motivation for others to do so, who won't in an atmosphere of exclusivity agreements.

It might not be as big a deal as certain other market forces, but exclusivity does tend to stifle innovation.

Re:Carriers != Manufacturers (4, Funny)

tsm_sf (545316) | more than 5 years ago | (#28356941)

Maybe not directly, but carriers do dictate and direct a lot of handset development.

"You know those phones they have in Japan? Make me a shitty version."

Re:Carriers != Manufacturers (1)

humphrm (18130) | more than 5 years ago | (#28357199)

Translation: They pay the companies that actually develop and promote innovative handsets a ton of money for exclusivity, and that money goes into further R&D.

Re:Carriers != Manufacturers (3, Interesting)

erroneus (253617) | more than 5 years ago | (#28357343)

Yeah, it's the promote part. Forget about the other words they said... you know, the ones that aren't true? As long as there is a bit of truth to cling to, let's focus on that.

The fact is, exclusive deals are very anti-competitive and is especially harmful to small carriers. Furthermore, the exclusivity of the iPhone to AT&T not only enables AT&T to gain an unfair advantage over the other carriers, more recently, it has been used to harm their existing customers. (These "start new plans with the new iPhone deal" is meant to bring in new customers, to hell with the loyal customers they already have -- they are on contract anyway.)

I don't have a prediction on how this may turn out, but I will say that if legislators or courts end up saying "no, you can't do that any more" then my guess is the next time this thing happens, the carrier will buy or accept a range of patents on the exclusive handset and then start suing other carriers who try to sell the same handset.

We have all been very annoyed at the way the carriers play games with handsets and have been doing so for decades. That behavior was halted when the POTS companies did it and I find it amazing that wireless carriers are permitted. It's time it all stops.

Re:Carriers != Manufacturers (2, Insightful)

Anonymous Coward | more than 5 years ago | (#28357421)

Really its the "promote" part of that statement that matters- Verizon puts a lot of money into marketing the BBerry Storm, AT&T helps market the iPhone etc.

The carriers do not pay a dime for "marketing" the handsets. It's all paid for by the vendors via MDF (marketing development funds).

The carriers are gate-keepers. Want your handset to be easily accessible to a captive market? Play ball with the carriers. Even Apple, with the brand behind them, has had to make concessions to AT&T. So has Palm with the Pre (no discussion of tethering on Sprint!!!)

Many consumers would choke on the retail price for a non-subsidized phone with even moderate capability. Just ask Nokia. If you can't get a carrier to position your phone with subsidies and the backing of customer support, you're going to face a very uphill battle for marketshare.

Yes, the carriers dicate and direct handset development, but unless the vendor has substantial momentum behind them to negotiate with, it will always be in the favor of the carrier. Not the consumer.

Re:Carriers != Manufacturers (4, Insightful)

Octorian (14086) | more than 5 years ago | (#28356603)

They sure seem to want to make all the customers think that they are. Heck, all their marketing seems to be about the "phones they offer" almost more so than the "service they provide".

People need to wake up and realize that their beloved phones come from Apple, RIM, HTC, Palm, Nokia, etc, and *not* from AT&T, T-Mobile, Verizon, or Sprint.

Of course in the US its a little more complicated in that every carrier seems to use a different radio technology, sometimes with overlap and sometimes without. (i.e. AT&T and T-Mobile are both GSM, but diverge for 3G) And of all the hot smartphones, it seems like only RIM actually cares about supporting all carriers and radio technologies (for the most part, as the Storm is an exception, sorta).

Re:Carriers != Manufacturers (2, Insightful)

digitalunity (19107) | more than 5 years ago | (#28356977)

Not sure if you caught my comments on a previously posted related topic, but handset manufacturers currently serve the interests of the carriers, NOT the end users.

This practice is merely exemplified by exclusivity contracts such as the iPhone or Palm Pre. The real issue here is that handset success is based largely on the whims of the carriers, not on functionality or usability. Exclusivity is a byproduct of the common subsidized handset for reduced contract rates system we have in the US. If this practice were ended, so too would be exclusivity deals.

If you'll notice, there are now just a few "classes" of handsets, all with very similar functionality based on the desires of the largest carriers. Tying handset purchases to carrier contracts needs to end!

Re:Carriers != Manufacturers (0)

Anonymous Coward | more than 5 years ago | (#28357451)

Exclusivity is a byproduct of the common subsidized handset for reduced contract rates system we have in the US.

reduced contract rates? WTF. The subsidized handsets increase the monthly contract rates and lower the upfront cost of the phone. That's why people were originally bitching about the 1st generation iPhones that cost $600. But do the carriers drop your rates after the initial contract is over and you're using a paid for cell phone? Hell no.

Re:Carriers != Manufacturers (3, Insightful)

Brickwall (985910) | more than 5 years ago | (#28357147)

Sorry, this again misses the point. You clearly don't understand that network modifications might need to be made, changes to billing systems, etc., all of which cost money. A CDMA network is as different from a TDSM one as a highway is from a railroad. So Union Pacific should demand that GM - well, maybe Toyota - build cars that can on railways as well? Or, since that example is backward from this case, let's turn it around - GM should demand that UP change their signals, sidings, billing, etc., so their "dual" cars could run on UP's tracks? Yeah, that makes a lot of sense.

Re:Carriers != Manufacturers (1)

ckaminski (82854) | more than 5 years ago | (#28357185)

WTF, we have an internet standard, a DSL standard, a DOCSIS standard. It's about time this nation decides on one network technology for Cellphones. since the rest of the world chose GSM and is loving it, I think we should heed their leadship, for once.

Re:Carriers != Manufacturers (4, Insightful)

andymadigan (792996) | more than 5 years ago | (#28357325)

Didn't you just break your own argument? I can't very well use my cable modem with my DSL connection, but they both get me on the internet. Likewise, my T-Mobile G1 won't work with Verizon any more than my CDMA Nokia would work with T-Mobile, but they both get me on the phone network.

That's how the cell phone companies see it. The only "features" on the phone for them are things that cost you money. E.g. $1/MB mobile web browsing, or text messaging.

This argument from U.S. Cellular is a non-starter, or at least I hope it is. What we really need is to unbundle the phone from the service entirely. Make the plans cheaper because the company isn't paying for the phone, and end these ridiculous contracts. Sure, you'll have to pay more up front, and the phone manufacturers will have to compete on price in a very large market.

Re:Carriers != Manufacturers (3, Interesting)

Brickwall (985910) | more than 5 years ago | (#28357565)

I don't disagree with you in general, but when companies started offering a bonus to sales agents for each new customer signed up - a not uncommon sales incentive, some agents quickly found that offering some of that rebate to the customer increased their gross sales dramatically. I remember a sales guy I worked with at a telecom firm after I left the cellular company complaining "You guys raped and pillaged us on handset prices". I thought this was a bit rich coming from a guy who charged $70,000 for a 4-channel voice mail system (and no, that's not a typo!), but it was indicative of consumer attitudes. Once they found some people offering lower prices on handsets, they were convinced that we were overcharging, and a few cents extra a minute on their contract seemed to be inconsequential. Never underestimate the inability of the general public to perform basic arithmetic! If Total Cost of Ownership had been a common process, Apple should have owned the business market after it introduced the Mac (shorter training, fewer crashes, etc.). But people looked at Macs, saw a $3500 price, looked at a PC-AT, saw a $2500 price, and the rest, as Bill Gates might say, is history.

Re:Carriers != Manufacturers (1)

socsoc (1116769) | more than 5 years ago | (#28357245)

Trains and cars? Minimal changes need to be made to the cellular systems to support new models (that are similar to existing models) and monitor usage. This isn't 1993.

You are talking more about forcing a CDMA network into allowing my 802.11a adapter on, because hell, they both provide data. I get your analogy now. As soon as UP starts allowing GM cars on their tracks and not Toyota, then you would make sense.

It's less of a forcing GM onto UP, but if they'll allow GM on UP rails only if GM won't also sell to Southern Pacific, then that's why SP would call foul (any sort of rail spacing aside, I'm not a train enthusiast).

Re:Carriers != Manufacturers (1)

wonkavader (605434) | more than 5 years ago | (#28357393)

"I wasn't aware that the carriers were in the business of manufacturing..."

Oh, yes they ARE. Or rather, they dictate what features will be available in the handsets they sell. in particular, they dictate what the handsets WON'T do. They keep their customers from having the ability to load ringtones, download information, upload music, etc. Anything the providers think they can charge for, they keep the handsets from being able to do via any connectivity outside of communication with the carrier.

Carriers routinely tell manufacturers to cripple their offerings. The manufacturers do it, because if they didn't they'd have to look elsewhere for distribution.

"Innovative", as in having features disabled? (5, Insightful)

Anonymous Coward | more than 5 years ago | (#28356527)

Um... yeah.. carriers would never disable features on cellphones, now would they?

Re:"Innovative", as in having features disabled? (1)

Octorian (14086) | more than 5 years ago | (#28356617)

Thank goodness I don't use Verizon, and will continue to avoid them like the plague.

I actually want my Wi-Fi and GPS (usable by 3rd party software), damnit!

Re:"Innovative", as in having features disabled? (1)

afidel (530433) | more than 5 years ago | (#28356945)

Buy a Blackberry then, we see no hampering of functionality on the Verizon Blackberries we own for people with poor AT&T reception. They are subsidized just like other phones too, they just have a little higher starting price than some of the non-smartphones (though the 8830 world is $50 online with 2 year contract).

Re:"Innovative", as in having features disabled? (1)

PitaBred (632671) | more than 5 years ago | (#28357085)

You may not now, but two years ago when I bought my 8800 Verizon had the GPS locked so you had to use their service, and their data plans prevented you from tethering, at least until you paid almost 50% more than competing carriers.

Re:"Innovative", as in having features disabled? (1)

d3ac0n (715594) | more than 5 years ago | (#28357087)

we see no hampering of functionality on the Verizon Blackberries we own

Then you aren't looking very closely. Verizon cripples BOTH the wifi capabilities AND the GPS capabilities of the phone so that they ONLY work with Verizon apps.

Go ahead, try and use Google Maps with a Verizon blackberry. Oh, Google maps works, but the location info is gleaned from the closest cell tower. NOT the GPS. So it can be as much as a MILE off.

AT&T does not do this, and I don't think Sprint does either (although I'm not certain on that one)

Verizon cripples everything they touch.

Backwards Argument? (5, Insightful)

MidnightBrewer (97195) | more than 5 years ago | (#28356559)

It seems to me that in the absence of exclusivity agreements the carriers would have greater incentive to introduce new features because they wouldn't be allowed to dictate terms to handset manufacturers in order to maintain their current level of mediocre offerings.

Re:Backwards Argument? (5, Insightful)

sodul (833177) | more than 5 years ago | (#28356783)

I used to work for a big name smart phone manufacturer. The versions for Sprint/Verizon were crippled at the carrier's request, i.e.: disabling internet sharing to your laptop. The unlocked (GSM) versions of the phones had all the features, not because they were more expensive, just because there was nobody requiring to remove the features.

One of the problems with Sprint and Verizon is that the radio has to be specifically designed for them which mean you can only use a phone that they sell directly. With GSM providers (AT&T, T-Mobile, and most of the world) you just need to put the SIM card in and it works (granted the local frequencies are supported by the phone).

Normally the manufacturer has no interest to cripple it's own product, but when the carrier control what devices will work on their network you don't have any choice but to comply. It is pretty much the same situation as when you had to use the land phone from the One phone company and were not allowed to plug you own.

Re:Backwards Argument? (1)

complete loony (663508) | more than 5 years ago | (#28357047)

One of the problems with Sprint and Verizon is that the radio has to be specifically designed for them which mean you can only use a phone that they sell directly

And the manufacturers are enabling this behaviour. If Sprint and Verizon didn't have your help we wouldn't be in this mess. Sometimes you have to say "NO".

Re:Backwards Argument? (3, Interesting)

sodul (833177) | more than 5 years ago | (#28357167)

Sometimes you have to say "NO".

Oh sure, and it would work for a company in a strong position, like Apple. If the company is hurting like Motorola, or Palm then you really cannot afford to not be sold by them. There is much more manufacturer competition than carrier competition and the big 4 carriers use that. Apple has reversed the roles a bit by having a true *must have* device. Sprint and Verizon got bitten by their own strategy and see a mass exodus to AT&T (I think customer support is not neutral on this).

Look at the last Treo model that was sold without carrier support. Sure you can use it with AT&T and TMobile but you have to pay the full price for it. I'm not even sure they've recouped development cost on this one.

As a customer I would much rather get lower monthly bill and no 2 year lock-in than getting a subsidized phone. This is pretty much paying a high interest perpetual loan on a device that is not that expensive anyway.

Re:Backwards Argument? (1)

complete loony (663508) | more than 5 years ago | (#28357337)

It is possible to add features to a product that everyone purchasing it gets. What I suppose I meant was that manufacturers could be selling fully capable phones to Sprint and Verizon that also have the changes they need to access their network. And they could be selling the exact same phones to everyone else at the same time.

In an imaginary world where all manufacturers respected the spirit of the standards this kind of chicanery wouldn't be happening.

Re:Backwards Argument? (4, Insightful)

Anonymous Coward | more than 5 years ago | (#28357443)

And the manufacturers are enabling this behaviour.

Bullshit. Nokia said "No", and look what happened to them! The carriers said, "Fine, no thanks, we'll get our phones from someone else." And now Nokia has just a fraction of the US market because of it. Nokia realized that it was a mistake, and now even it is playing by the carriers' rules.

Re:Backwards Argument? (1)

FunkyMarcus (182120) | more than 5 years ago | (#28357625)

One of the problems with Sprint and Verizon is that the radio has to be specifically designed for them

What about the radio needs to be carrier-specific? An EV-DO radio is an EV-DO radio.

The big US carriers are guilty of crippling, but it's got nothing to do with the air interface or the hardware. In the CDMA world, the same exact hardware is, more often than not, sold outside the US without crippled software. In fact, sometimes they're even sold as such inside the US, by smaller carriers that can't afford to heavily customize (cripple) the software.

Re:Backwards Argument? (1)

Hey_bob (6104) | more than 5 years ago | (#28356913)

I know I'm a bit with the Naive and silly.. I'd like to see all the carriers eventually switch using a common wireless standard/freq/whatever. So that any phone could be used on any carrier. *however* I still say let AT&T have their iPhone "exclusive" deal.. whatever. If you want a cheaper iPhone.. go get an AT&T contract. If someone on Verizon wants an iPhone.. They'll need to pony up whatever zillions of dollars the retail version will then cost. Plus maybe *everyone* can have good coverage.. not just Verizon here, T-mobile there etc..

Then it's a matter of luring people in with the better plan, or discount on the shiny new toy. Still room for making the better product.

Or.. apparently I want to move to Europe or something?

Just a shakedown scheme.... (4, Interesting)

Anonymous Coward | more than 5 years ago | (#28356561)

The Senators in question are probably trolling for campaign contributions.

Here's a game.. (3, Insightful)

synthesizerpatel (1210598) | more than 5 years ago | (#28356563)

Name one innovative handset developed by carriers such as Sprint, AT&T, et all.

Nokia, RIM, Apple and (previously) Motorola have developed all the 'innovative handsets'.

What'd sprint give us?

Rebranded, OEM, disposable turds

Re:Here's a game.. (1)

drinkypoo (153816) | more than 5 years ago | (#28356611)

Name one innovative handset developed by carriers such as Sprint, AT&T, et all.

And by "promote" they mean "force handset manufacturers to agree to our terms lest we go to extensive measures to prevent their hardware which is designed to the standard which our hardware supports from working correctly." (Except, oddly enough, AT&T.)

Re:Here's a game.. (1)

b96miata (620163) | more than 5 years ago | (#28356669)

Except AT&T? Right, that'd be why the slingplayer mobile for iPhone is the only one that can't utilize the cellular network.

What a crock (5, Informative)

BadAnalogyGuy (945258) | more than 5 years ago | (#28356567)

On a technical level American carriers care only that the phones pass GCF. If they want to bring innovation into this, they are going to have to argue that somehow the business model itself is innovative, but I don't think that is what they are saying.

What is important in exclusivity is that users don't have a choice of carriers if they want to buy a specific phone. If you want the iPhone, you're stuck with AT&T, for example. But that doesn't bring any innovation to the phones themselves.

Unlocking the phones isn't any better, though, technologically speaking. With a choice of carriers, you end up with a lot of choice, but the phones on the market are still the same old dreck. The reason for this is because the innovation must happen at the phone maker level. To support this, operating system vendors need to also be innovative. And to make sure that innovative operating systems can run, advanced chips are necessary.

But none of that involves the carriers. Carriers are merely the pipes: A necessary component, but a wholly replaceable part. From a technical innovation standpoint, these guys are the road system. Cars are what we consider innovative, roads are only considered when they suck. And frankly, American cellular carriers suck.

Re:What a crock (2, Interesting)

R3d M3rcury (871886) | more than 5 years ago | (#28356741)

[...] innovation must happen at the phone maker level. To support this, operating system vendors need to also be innovative. And to make sure that innovative operating systems can run, advanced chips are necessary.

But none of that involves the carriers. Carriers are merely the pipes: A necessary component, but a wholly replaceable part.

Not entirely true.

Consider the iPhone, as an example. What did AT&T bring to the table, besides their network? Visual Voicemail. My friend has an unlocked iPhone on T-Mobile and he's switching to AT&T and getting the iPhone 3G S (his employer will pay for it). And the the most exciting thing for him is that he finally has Visual Voicemail.

I'll agree that so far, I haven't seen anything really great. Sprint's turn-by-turn directions, maybe. Verizon's V CAST looks ridiculous. But to say that the carriers are "just pipes" isn't 100% true.

Re:What a crock (1)

BadAnalogyGuy (945258) | more than 5 years ago | (#28356849)

It's true that some carriers may offer advanced bearer services, and that some phones may have features that work better or only on certain networks. If the carriers want to argue that angle, they may get some traction on this innovation claim.

I can see it going something like this:
1) We want to offer subscribers advanced bearer services
2) This is a chicken/egg problem - we can't offer it unless UE manufacturers build it, and vice versa
3) The only way to break through this is to work together to deploy these phones/services simultaneously
4) Since we are sharing development costs, we want to guarantee to recoup those costs
5) The way to recoup costs is to have exclusivity agreements

This isn't a bad argument, except that it shows just how deep in bed UE manus are with the carriers. Subsidized development, subsidized phones, exclusivity agreements. If you look at it, the whole thing is a huge oligopoly designed to keep little guys out of the market.

Re:What a crock (3, Insightful)

maglor_83 (856254) | more than 5 years ago | (#28356989)

And this is exactly what should be happening. The carrier can develop technologies such as these to differentiate themselves from their competition, instead of relying on phone manufacturers. There is no reason they couldn't have done this without the iPhone. Phone manufacturers would much rather add features such as these to their phones, instead of the current situation of having to remove features because the networks demand it.

Re:What a crock (1)

hedwards (940851) | more than 5 years ago | (#28356775)

Largely yes, they do suck, but a large part of that has to do with the difficulty of changing networks. Nearly all the people I call are with AT&T, were I to switch carriers, I'd suddenly have to care about how many minutes I'm getting. And as hard as it is for me to believe, the reception seems to be worse than when Cingular was holding my account.

Phones are similar, if you're locked into a portion of the market making a more specialized phone is much less likely to turn a profit. Whereas it might do fine in the market at large, you're artificially stuck making it available network by network.

Well... (0)

Anonymous Coward | more than 5 years ago | (#28356569)

If the nationwide operators like the idea of exclusivity agreements, then those agreements are probably a Bad Idea.

Carriers R not devolopers (0)

Anonymous Coward | more than 5 years ago | (#28356571)

I thought only Apple and Palm developed innovative handsets?

Re:Carriers R not devolopers (1)

icebike (68054) | more than 5 years ago | (#28356631)

Exactly.

The carriers are always caught flat footed and demanding handset manufacturers disable features in their phones because the carriers don't know how to follow the standards.

I'm not aware of a single carrier that EVER came up with a handset design, innovative, or otherwise, unless you consider demanding lobotomies before letting them on the network.

Yes, I'm talking about you Verizon, and you too ATT.

T-Mobile Sucks But I'm stuck on a contract (0, Offtopic)

bit trollent (824666) | more than 5 years ago | (#28356573)

T-Mobile Sucks But I'm stuck on a contract. Investigate that.

They never mentioned that they would have dead zones all over the place. At work, at bars, friends houses - everywhere. T-Mobile has little dead zones all over the place.

If they aren't going to provide the service they promised i.e. a working cell phone, then I shouldn't be bound to their contract.

But here I am, stuck in 1985 on a cell phone contract that would penalize me $200 for leaving the worst cell phone service I've used in 10 years.

Re:T-Mobile Sucks But I'm stuck on a contract (4, Informative)

Achromatic1978 (916097) | more than 5 years ago | (#28356661)

You're not. If your home or work is in a listed low coverage area, they'll let you out of your contract with no ETF, no arguments - all I got was a "We hope you'll consider us again when we've got better coverage in your area" (and I happily would... the -only- problem I have ever had with Tmo was coverage.

Re:T-Mobile Sucks But I'm stuck on a contract (2, Informative)

kelnos (564113) | more than 5 years ago | (#28356781)

IIRC they give you 30 days from your contract start date to change your mind.

"Would have incentive to..." (5, Insightful)

laughingcoyote (762272) | more than 5 years ago | (#28356577)

"Without longer than a century copyright, I would have no incentive to develop anything useful." "Without being able to patent walking using both feet, I wouldn't have incentive to make anything useful." "Without being able to grant myself a monopoly on something, I would have no incentive to create anything useful." "Without the Shoot Anyone Using Anything But My Stuff Act, I would have no incentive to develop anything useful."

I am getting quite tired of seeing that, and we should really quit listening. If you don't want to, then by all means, don't, and feel free to fade away. In the meantime, those who still have plenty of incentive to do so (by finding creative ways to make money off of it, out of simply enjoying it, out of their own need for a tool to do something or a wish to create something for their own enjoyment, what have you), will do so.

I'm getting less and less tolerant of this temper tantrum. And that's really all it is-"I don't WANNA share!!!!! I thought of it FIRST!!!!" If the dinosaurs mean it, then by all means, their time has come and we should let them go. Good riddance to them, something better suited to modern times will take their place. On the other hand, they do tend to like paying themselves those large bonuses, so I would wager they'll start getting really creative in the absence of these artificial restrictions enabling them to be lazy and rest on their laurels.

Re:"Would have incentive to..." (1)

ckaminski (82854) | more than 5 years ago | (#28357227)

Obama needs to crank up the trust-busting engine and undo the damage the Bush administration has allowed to happen with the mega-mergers. It wasn't just Bush (some happened under Clinton) but the amnesty granted to Microsoft after the anti-trust debacle was the start (IMHO), the Verizon/BellAtlantic/BellSouth megamergers... they need to be undone.

And I've been a die-hard Verizon Wireless customer for 12 years (trialling the Sprint/Pre service, which sucks in my area).

Re:"Would have incentive to..." (0, Troll)

Anonymous Coward | more than 5 years ago | (#28357589)

In my view, you are the childish idiot here.

I am getting rather tired of the repeated cries for "Sharing! LOVE! Freedom! SHARE! COPYLEFT! GREED!", which is a mixture of ignorance and RMS' pseudo-communist hatred against proprietary software. Maybe you would rather be the one to shut the hell up instead?

Face it - those who cry and stamp their feet like crybabies against copyright have NEVER been able to propose any alternative model for how to do things - at least, with any kind of modelling for how industry, the creative and the technological sector would pan out. Are we talking complete global IP-burning? Are we talking free sharing of all media? In that case any and all designers would be out of jobs - why would someone pay twice as much for a product funded experimentally at high cost and using a horde of designers, just to get the product THIS WEEK, rather than simply wait a month and get it from China? If there is no free IP, what would hinder simply the development of private security forces and an explosion in industrial espionage, as companies seek to replicate IP protection through secrecy routines? You would see the rapid death of 90% of companies relying on experimental development, and anything "new" would be produced by someone whose hardware lockdown routines makes the PS3 look like a glass jar.

The idiocy of YOUR crowd is evident from the fact that if things don't happen the way you propose, and creative industries all die because of browser plugins that allow the instant transparent peer-to-peer downloading of any media name clicked on, you would simply say, "Tough luck! Sorry about that! My bad!". There's no going back, so do you really want people to put their livelihoods at stake for YOUR rants and fantasies?

If you're able to ridicule others by paraphrasing them, and saying how tired you are - then you should really learn to hear STFU to your face as well. Good riddance to yourself, get lost, idiot.

"Develop and promote"? (4, Insightful)

jayhawk88 (160512) | more than 5 years ago | (#28356583)

Since when does Verizon or any other carrier have anything to do with the development of a phone? They just take whatever you can get from HTC/Motorola/Samsung, throw a logo on it, change the name to something stupid, and pick 5 random features to cripple for no apparent reason. As for promotion, while I guess that charging customers 200% more for the phone than it's actually worth unless they sign a 2 year contract (if you let them but it unlocked at all) is technically "promotion", I don't think that is really in the spirit of the true definition.

What a bunch of tools.

Re:"Develop and promote"? (4, Informative)

spire3661 (1038968) | more than 5 years ago | (#28356677)

This is like saying Microsoft has no say in hardware development. Its simply not true. Netbook development is pretty severely curtailed by Microsoft's netbook licensing arrangement. You arent going to build a device that has features your biggest customer frowns upon/outright bans.

Re:"Develop and promote"? (1)

jayhawk88 (160512) | more than 5 years ago | (#28356739)

You arent going to build a device that has features your biggest customer frowns upon/outright bans.

Yet this is exactly what carriers do with phones, especially smartphones. Verizon, for example, disables built-in GPS on almost all the handsets they offer, to force you to pay for their custom GPS app. And plenty of carriers have/continue to disable stuff like Bluetooth tethering.

AT&T Does the same thing (1)

langelgjm (860756) | more than 5 years ago | (#28356813)

Yeah, AT&T has done the same thing. I got an SE Z750 from AT not only did the AT&T branded OS look like shit for the 5 minutes I used it (some crappy orange AT&T color scheme), but AT&T's firmware disables the included GPS. In this case I think it's because they want to sell higher-end phones to people who want GPS (I payed $10 for this phone after a $60 rebate). Anyway, a quit trip to DaVinci team and less than $15, and I had restored an unbranded firmware that enabled GPS functionality.

It's really sad that not only do carriers take decent phones and make them worse, but then you end up having to pay to get back features that the phone originally had. Kind of like when you could pay Dell not to install all their crapware on new computers (is that still around?).

Re:AT&T Does the same thing (2, Insightful)

dbcad7 (771464) | more than 5 years ago | (#28356875)

It's especially bad when you consider that the GPS signal is not even provided by the carrier.. It's not like your costing them money by using it. They want you to think that by using their custom GPS software with a monthly fee you are using GPS signals sent by them.. (although AGPS is a signal from them I suppose) .. In reality their navigation services should only be a one time charge for the software.. Worse ripoff than text message charges !

Re:"Develop and promote"? (2, Informative)

ksheff (2406) | more than 5 years ago | (#28357581)

The prepaid vendors are even worse. Even the one that promises "No Evil". Evil must be being able to get your damn contacts off the friggin phone or IF the phone can take pictures, they can't be downloaded directly to a computer. The phone's manufacture offers software to do all of the above? That's evil too, so the phone is lobotomized so these evil tools won't work with the phone. Being able to move a SIM card from one phone to another that you bought from them is evil too.

Re:"Develop and promote"? (1)

kelnos (564113) | more than 5 years ago | (#28356791)

That's part of the problem. The carriers shouldn't be the phone manufacturers' customers. The people who end up using the phones should be.

Re:"Develop and promote"? (0, Flamebait)

Austerity Empowers (669817) | more than 5 years ago | (#28356883)

If random people got the ability to use the phone of their choice, and treat their wireless company as a bandwidth provider, a lot of value would be destroyed.

Re:"Develop and promote"? (1)

spire3661 (1038968) | more than 5 years ago | (#28356961)

We should be pushing for legislation in this direction. That value is completely artificial. You cant have a service that is almost on par with a utility and not expect people to pressure you with legislation when you are artificially inflating the market and creating artificial value through technology suppression.

Re:"Develop and promote"? (0)

Anonymous Coward | more than 5 years ago | (#28357165)

True, look how well windows mobile has taken off.

Re:"Develop and promote"? (0)

Anonymous Coward | more than 5 years ago | (#28357485)

Since when does Verizon or any other carrier have anything to do with the development of a phone?

Are you kidding? Have you not looked at a Verizon phone? Compared one manufacturer of a Verizon phone to another? Verizon specifies practically every goddamn thing, right down to the placement of pixels on the screen in "their" UI (although this doesn't generally include smartphone UI's). The sad thing is that the manufacturer has to try and innovate within this rigid hell-hole. Verizon is one of the worst offenders in the group of carriers when it comes to messing with the development of phones, as their long history indicates.

About feaking time... (5, Informative)

ickleberry (864871) | more than 5 years ago | (#28356647)

.. someone stood up to this nonsensical practice. For nearly 20 years we've had GSM openness in Europe and this sort of exclusive nonsense is making its way across the water in the form of the iPhone. For a while I have been thinking this is an attempt by the mobile phone operators to usher in a new wave of proprietary phones.

Heavy integration with online services, firmware branding and exclusive deals are nothing but bad news for us. I havn't bought a SIM-locked phone since 2001 and I hope to never have to buy one again. The openness of GSM is a great thing but people take it for granted here.

A lot of people buy locked phones because they are cheaper, but they shouldn't be cheaper. This was acceptable 10 years ago when not everybody had a phone but now there are too many phones. Producing more phones only generates more e-waste. There should be more countries like Belgium around where this shit with subsidising phones doesn't fly. At least then my collection of unlocked Nokias will be worth more than 20 cents

Exclusive handset deals are nothing more than a way of making people put up with a more expensive / lower quality network they wouldn't normally put up with.

Mods Can Slob On My Knob (-1, Troll)

Anonymous Coward | more than 5 years ago | (#28356675)

All you fucking shit for brains moderators can slob on my knob.

You are worthless.

"innovative handsets?" (3, Insightful)

immel (699491) | more than 5 years ago | (#28356729)

From TFA:

the introduction of the iPhone has spurred many iPhone substitutes such as the HTC Touch, Blackberry Storm, Google G1, and several Samsung and LG models.
-AT&T

In other words, exclusivity deals breed ripoffs. Yeah, that's one form of competition, but it doesn't really seem like "innovation" to me when the release of one product that everyone wants causes every manufacturer to try to make an exact copy with a different exclusivity deal. If everyone carried the iPhone, these companies would be trying to differentiate themselves by coming up with the next big thing, not making copies of the last big thing.

wireless carriers would have less incentive to develop and promote innovative handsets.

I'm not from this industry, but I don't believe wireless providers develop handsets. Handset manufacturers (e.g. LG, Samsung, Motorola, etc.) do.

FROST+ PIST (-1, Redundant)

Anonymous Coward | more than 5 years ago | (#28356749)

abouT bylaws

Shouldnt be just exclusive handset deals (4, Insightful)

jonwil (467024) | more than 5 years ago | (#28356785)

It should be deals (including the way spectrum auctions are carried out and regulated) that result in carriers *cough*Verizon*cough* getting a monopoly (or near monopoly) in certain areas just because they are the only carrier with coverage. (like the deals various carriers have made to get exclusives in subway systems, high-rises and other places where extra equipment is needed to give sufficient coverage)

Get ready for Jitterbug handsets (3, Informative)

rwwyatt (963545) | more than 5 years ago | (#28356859)

There is competition amongst the operators to develop the best handsets.. Without the iphone, would we have seen the Storm, Omnia or others?

Each device has it's good and bad points. The fact is that Cellular companies are only in charge of part of their network at best, and the and the handset shouldn't really be the determining factor of choosing an Provider At&T readily admits their network wasn't optimal for the number of users with the Iphone and they are now trying to remedy that so each user has a better experience. Only time will give a better indication

Exclusive handsets aren't necessarily a bad thing. It is just one factor that should be measured..

There really isn't enough spectrum to have true competition. The cost of the RF spectrum and cell site acquisition are the major factors for an operator.

Re:Get ready for Jitterbug handsets (1)

mjwx (966435) | more than 5 years ago | (#28357319)

Without the iphone, would we have seen the Storm, Omnia or others?

Yes,

The same with Android. You forget that most of these products were in development long before anyone at apple even uttered the word iphone. Most of the new Nokia/Samsung designs are based on what has been available in Japan and Korea for years now. In mobile communications the west is so far behind the east it isn't funny.

Interesting tag (4, Interesting)

earlymon (1116185) | more than 5 years ago | (#28356865)

The suddenoutbreakofcommonsense is very interesting, but I'm not sure which way:

1. The handset sweetheart deals are creating haves and have nots and should stop.

2. Without the handset manufacturers having to bend over backwards to please the carriers, there might have been fewer, lower-cost, higher-quality handsets available.

When the handset makers can tell the carriers to take it or leave it, and when those handsets have features dictated by the consumers instead of the carriers (abysmal here in the US), and market competition irrespective of long-term contracts hits the handset pricing, then not only would that tag truly apply, but so would whatabreathoffreshairfinally.

who designs cell phones? (0)

Anonymous Coward | more than 5 years ago | (#28356903)

Wireless carriers do NOT design cell phones...
They shop the vendors, request certain features, bells, whistles, colors, etc... Cell phone manufacturers design cellphones to meet the criteria. Some with, some without the OEM manufacturers logos on them/in them.

Carriers produce handsets? (2)

Dracos (107777) | more than 5 years ago | (#28357031)

Then what do Motorola, LG, Samsung, RIM, Apple, Palm, Sony/Ericcson, Nokia, and all the other companies who aren't carriers but whose logos still appear on the handsets/batteries/chargers, contribute to the cell phone market?

Free Market? (4, Insightful)

Bob9113 (14996) | more than 5 years ago | (#28357055)

But nationwide operators, including Verizon, maintain (PDF) that 'in the absence of exclusivity agreements, wireless carriers would have less incentive to develop and promote innovative handsets.'

Why are wireless carriers involved in the development and promotion of innovative handsets? Isn't the free market supposed to motivate handset developers to develop and promote innovative handsets?

Or do the wireless carriers not believe in the free market? I, for one, think the free market is a pretty good thing. You know, when it genuinely lets the purse-holder freely decide.

Aren't these the same corporations who cry "free market" every time the government tries to regulate them?

Perhaps, and I don't want to sound like a conspiracy theorist here, but just maybe; the wireless carriers actually are not objective supporters of the free market? Maybe what they want is not the free market, but laissez-faire capitalism. But then must we not ask, without a free market, how can laissez faire capitalism seek efficiency?

Re:Free Market? (4, Insightful)

magamiako1 (1026318) | more than 5 years ago | (#28357191)

Bob:

On a technical note, this is all something being done mostly under the "free market". That is, it's completely up to the handset providers and the carriers to decide, freely, for themselves, if they want to have exclusivity deals. And it's completely up to the end users if they want to purchase them or not within the constraints of these deals.

Beyond that, you get into very hairy situations.

The key point though, is "Free Market" does not necessarily mean "Fair Market".

I am in no way a supporter of a "free market" and I believe in heavy regulation and oversight from 3rd parties to ensure that we have a fair market for consumers. I'm just simply pointing out that you can't have "free market" and "fair market"--it just doesn't work.

Some people would argue that a free market is a fair market in that anyone who wants to enter the market can do so by coming up with a better product or service and offering that. But unfortunately, under a completely free market that wouldn't happen--since the larger providers would enter agreements to force you out of the market.

So at the end of the day, a free market system is not the best--and a regulated, fair market, ran by 3rd parties unrelated to the corporate interests of those involved is the best type of market.

Of course....whether or not we have that today is a completely different debate. I'm simply pointing out the flaws in a "free market" system.

Re:Free Market? (3, Interesting)

Bob9113 (14996) | more than 5 years ago | (#28357663)

I am in no way a supporter of a "free market" and I believe in heavy regulation and oversight from 3rd parties to ensure that we have a fair market for consumers. I'm just simply pointing out that you can't have "free market" and "fair market"--it just doesn't work.

I suspect that we agree, but that I am using the term in a different way.

By "free market", I intend what Adam Smith intended: That the only decider of how dollars are spent, on a per-transaction basis, is the person who opens his or her purse. The silent hand.

Is the purse-holder the only decider here? No, the contract participants are making part of the decision. That is antithetical to the principles of a "free market".

What I am trying to do is to wrest back the term "free market" from the "laissez-faire" corporatists. "Free market" necessarily implies that the silent hand is unfettered. And as you note, that requires our government to punish anti-competitive behavior from time to time. But the interference need not be falsely accused of being a step toward socialism. Let us stand on principle, call it what it is, seize the high ground: We call upon the government to defend the free market from those who would inhibit the free action of the silent hand.

Also, consider this: Is the government not already interfering in this case? Whose courts, banks, jails, and guns give those contracts their force? Why it is the government. Of course, even in the absence of the government enforcement of those contracts, collusion would exist. But should we not first seize the high ground by calling this what it is? It is collusion, restraint-of-trade, anti-trust violation, &c. Do not let them hide behind the noble term "free market" or "contract." Contracts are obligations to perform services for consideration -- not restraints of trade that destroy the foundational silent hand of the free market.

Do not give an inch. Do not let those who depend on government interference to destroy the free market accuse you of favoring government interference that destroys the free market. We are those who believe in free competition, the free market, and the noble objectives of Adam Smith. They are the ones who wish to suckle at the government teat at the expense of market efficiency.

And if you have a minute more, allow me to share some Adam Smith quotes:

"The monopolists, by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commo-dities much above the natural price."

"The price of monopoly is upon every occasion the highest which can be got."

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

"To widen the market and to narrow the competition is always the interest of the dealers ... The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted, till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

All those quotes come from The Wealth of Nations.

It is not the free market which is flawed, it is those who bear false witness about it, who destroy it. They are not us. We are the noble ones, you and I.

letter to whom? (4, Funny)

damn_registrars (1103043) | more than 5 years ago | (#28357137)

Why on earth would any reasonable person expect a letter to the FCC to accomplish anything? I've tried to contact the FCC before and they just respond with the same canned response every time, telling me they cannot do anything. Might as well send a letter to Santa.

Exclusivity ONLY for limited time. (0)

Anonymous Coward | more than 5 years ago | (#28357181)

Why can't we just get an exclusivity for LIMITED amount of time, say 3 or 6 months?

There is so many new phones on the market that a 6 months old headset is already old and out of fashion (unless it's the iFruit one), and then there is absolutely NO POINT of having it exclusive for one network only.

I know that the idea of exclusivity is basically to grab customers from other networks, as almost everyone has a mobile phone nowadays (and some people have more than one handset).

typical... (4, Insightful)

whipple-spree (1293834) | more than 5 years ago | (#28357273)

It seems, when given the option, that most big business will try to strangle the hand that feeds them. Cheap and reliable communication has been a keystone of American business, both domestic and foreign and here we are trying to catch up because business is too damn greedy/short-sighted for their own good. Their argument has nothing to do with innovation. It has everything to do with making money by not rolling out a more expansive, more reliable network. Who suffers? America does and it's not like they can just pick up their network and plop it down somewhere else.

Follow the Money trail (4, Interesting)

freedom_india (780002) | more than 5 years ago | (#28357283)

Instead of debating it in Senate (which exists solely for debates), why put it to Commerce Committee and why now?
The answer can b e got here. [benton.org] It says a former tech exec has joi ned the committee.
Which means he is trying to pre-empt any legislation by the Congress by putting it for consideration in the committee.
Which effectively kills any legislation and also protects the interests of telecoms.
Sneaky, disgusting and probably illegal.
But then the senate has a record of disgust. So nothing new here.

Verizon is funny. (4, Insightful)

cyn1c77 (928549) | more than 5 years ago | (#28357471)

But nationwide operators, including Verizon, maintain (PDF) that 'in the absence of exclusivity agreements, wireless carriers would have less incentive to develop and promote innovative handsets.'

You've got to hand it to Verizon for trying to confuse the congressmen with idiot logic. Are wireless carriers really developing innovative handsets? (or handsets at all)

I am trying to think of more than 3 revolutionary handset lines besides the iPhones, the Blackberries and Nokias. I guess we can throw in Motorola for their early efforts and Sony Ericsson for cute design too. But where are the carriers?

I think Verizon is really pissing their pants because they are thinking "in the absence of exclusivity agreements, wireless carriers will have a harder time locking down good phones with carrier-specific crappy software."

In theory, non-exclusive phones would also reduce the number of overall phones brought to market and increase the quality since the developers would be competing against a larger market.

Really, with non-exclusive handsets, both consumers and cell phone companies win. Large carriers will be the only ones losing... they will have to choose between market share, profit, and handset control. Of course, who are we kidding, nothing is going to change because they probably own half of the senate.

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