Rural Wireless Operators Ask FCC To Probe Exclusive Cellphone Deals
For years now, it’s been standard practice for US wireless carriers to dangle a hot mobile phone they’ve got exclusively to try to poach a rival’s subscribers or to attract new ones. AT&T’s deal with Apple (NSDQ: AAPL) to be the sole carrier of the iPhone has paid off for the number one network; despite what many first thought of as a cripplingly expensive revenue share deal, AT&T (NYSE: T) has only had praise for the device.
But small wireless carriers catering to rural areas are not too happy with the arrangement, and today, their 80-member strong trade body, the Rural Cellular Association, is filing a petition with the Federal Communications Commission to ask the regulator to investigate the practice. As the WSJ reports, the complaint reopens the tricky issue of “open networks” and allowing consumers unfettered choice of the mobile handset or device they want to use.
Rural carriers believe the deals are anti-competitive and anti-consumer. They contend that they shut rural operators out from offering their customers the latest and hottest handsets for months, if not years, and deprive subscribers of the cellphones of their choice. Residents of 16 states can’t use the iPhone, for example, because AT&T only offers roaming coverage in them.
Will the Republican-controlled FCC pick up on the complaint who’ve sided with large carriers in the past, and especially right before the election? The WSJ says its unlikely, and rural operators may have better luck if the Democrats manage to win in November, as several Democrats—Senators Amy Klobuchar of Minnesota and Jay Rockefeller of West Virginia—have previously questioned the practice.
The CTIA, meanwhile, doesn’t care if you live in the sticks and can’t get the phone you want. They’ve gone on record to say there’s no need to ban these exclusive deals as consumers in the US already have a “wide choice” of cell phone models, especially compared to Europe.
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