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  • Will the FCC Divorce AT&T from Apple?

    Image via iPhoneBuzz.com

    AT&T can't have it both ways.

    On Friday, AT&T sent a letter to the FCC accusing Google of violating the U.S. Federal Communications Commission's net neutrality rules. But AT&T doesn't see its one-way relationship with Apple's iPhone as a violation of the same.

    FCC Chairman Julius Genachowski, however, is dropping hints that he does.

    From the SFC this weekend:
    In his "network neutrality" speech this week, Genachowski did not talk explicitly about exclusive deals between handset makers and carriers. But what he did say could lay the foundation for unprecedented and, for a group of market-oriented scholars, unneeded FCC regulation of wireless vendor contracts.
    The obvious implications of such rules would likely impact future "exclusive arrangements" in the mobile world. But many are speculating that this could be the straw that breaks the camel's back. And by "camel's back," I mean the cozy partnership between Apple and AT&T for the iPhone.

    The comprehensive article from the SFC raises a host of questions about the plausibility of regulatory policy restricting exclusive contracts. Andrew Jay Schwartzman, president of Media Access Project, responded to the FCC chief's speech by telling Bloomberg News that "The iPhone can't be exclusive under a true net neutrality regime."

    On the other hand, Ryan Radia, an information policy analyst with the Competitive Enterprise Institute (CEI), is quoted in the SFC piece saying that exclusivity can't be ruled out, especially if the agreement "doesn't carry provisions that would conflict with whatever the final network neutrality rules might be."

    "[Deals may be legal] so long as the deals do not prevent a consumer from accessing the content of their choice," he says. But, if Apple and AT&T allowed access to only a subset of applications or services, such a practice would likely be illegal.
    Although it is entirely too early to speculate if yet-to-be formulated rules and regulations will ultimately make deals like that between Apple and AT&T a thing of the past, it's far more likely that the open access requirement of a growing number of networks (like Verizon's LTE 4G network) will do more to open this highly competitive market than any rules and regs ultimately can... or should in a free market.
    This article was originally published in forum thread: Will the FCC Divorce AT&T from Apple? started by Michael Essany View original post
    Comments 34 Comments
    1. angiepangie's Avatar
      angiepangie -
      The Sidekick can be unlocked by the carrier if you pay them to. The iPhone can not.
    1. lord ryttingham's Avatar
      lord ryttingham -
      Quote Originally Posted by inzandity View Post
      "So the FCC won't let me be
      or let me be me, so let me see
      They try to shut me down on AT&T...."

      so anyways... No I definitely don't agree with the FCC getting involved, because there are plenty of devices that are specific to carriers... Look at the palm pre for instance
      Except that the Palm Pre will not always be exclusive. Verizon is getting the Pre as well. Correct me if I'm wrong, but I believe Sprint's exclusive Pre contract is significantly shorter than AT&T's with the iPhone. Isn't it six months or a year or something?
    1. Happy Noodle Boy's Avatar
      Happy Noodle Boy -
      Quote Originally Posted by lord ryttingham View Post
      Except that the Palm Pre will not always be exclusive. Verizon is getting the Pre as well. Correct me if I'm wrong, but I believe Sprint's exclusive Pre contract is significantly shorter than AT&T's with the iPhone. Isn't it six months or a year or something?
      If news are to be believed, there's going to be a GSM version of the Pre coming out in a couple of months on the NA market so either ATT or T-Mobile might be getting it soon.

      EDIT: The GSM version of the Pre already exists and has been showcased around Europe.
    1. Doppler's Avatar
      Doppler -
      Quote Originally Posted by lord ryttingham View Post
      Except that the Palm Pre will not always be exclusive. Verizon is getting the Pre as well. Correct me if I'm wrong, but I believe Sprint's exclusive Pre contract is significantly shorter than AT&T's with the iPhone. Isn't it six months or a year or something?
      The Pre will not be on Verizon. Verizon did the same thing as they did with the iPhone. Palm and Apple wanted more control of their devices, and Verizon won't give it to them.

      Say bye bye to subsidization in most cases if this goes through. This is be the end of exclusivity on all carriers, and a lot of carriers will think "Why should we subsidize a phone? People will pay the ETF and leave..." "Might as well let them buy them outright in the beginning..."
    1. GIRLLLLLLLLLLLLLLLLL's Avatar
      GIRLLLLLLLLLLLLLLLLL -
      They made a GSM Pre???????? Impossible, especially since Apple can't make a CDMA iPhone! You know, experts have weighed in heavily on that and a CDMA iPhone is impossible, Palm must be crazy to attempt such madness.

      /ok
      This is better for everyone and that's Apple included, Volume will trump lower profits made per handset if that even is the case. It might not be good for AT&T if people end their contracts early but the people that stay will enjoy a network that isn't overrun by iPhones
    1. eg6motion's Avatar
      eg6motion -
      Quote Originally Posted by DayumQuitPlayin View Post

      Because of all this.. I absolutely HATE AT&T, just hate them. It's time for a change, seriously.
      go whine to apple, they are the ones who control the locking and unlocking, not ATT. no wonder they keep telling you they can't...
    1. rwin84's Avatar
      rwin84 -
      This is just getting old....
    1. aekhamsouk's Avatar
      aekhamsouk -
      Quote Originally Posted by Cokeman View Post
      Every phone AT&T sells can be unlocked, just by calling AT&T. Excluding the iPhone. This should be illegal. The iPhone is no different. It is a subsidized phone just like the rest. If any thing AT&T & Apple should be required to unlock the iPhone.
      I agree to a 2yr contract, pay my fees, the phone is mine to do with as I please. At any time, whether I end the contract early or not, I should be able to use that device any way I see fit. The contract is for me to keep service with them. No where does it say I have to use the phone I bought for the term of the contract.
      The US carriers are screwing the consumers & we keep letting them.
      couldn't have said it better!
    1. riku98523's Avatar
      riku98523 -
      Quote Originally Posted by €hR!$ View Post
      I don't see how the FCC can force Apple to sell the iPhone on other carriers. By selling the iPhone on AT&T alone, Apple makes a higher profit on each phone. If they were to sell on another carrier, neither carrier would pay as high of a subsidy, and Apple would make less. Unless the FCC is willing to pay the difference, that's not fair.

      And even if Apple would make the same profit, how can you force a company to sell their devices to someone else? If you own a store, you have the right not to deny customers. Why can't Apple deny other carriers?
      That's the point of competition to give the consumer a lower price. When AT&T was the only phone company they could jack the price up as high as they wanted and because AT&T was the exclusive phone company no one could say ****. That is why we have these laws and that is why AT&T was broken into multiple companies many years ago. Apple doesn't have the right to monopolize off a exclusive deal with AT&T (which in turn has AT&T monopolize the iPhone industry which makes sense because all AT&T has done since it has started was try and gain back the original power it held)
    1. ibby03's Avatar
      ibby03 -
      All i'm hearing is a bunch of whining, at... was the only company smart enough to sign with Apple for this exclusive phone at the time, V Dub declined it and the other carriers didn't have the backing needed for the launch of the phone. If the phone sucked and wasn't as popular nobody would be complaining. "So Microsoft and the Xbox have exclusive rights to Gears of War and I think that's unfair, FCC you must do something!!" <-- Isn't that the same thing?!? It's just how it works... If everyone wants their phones sold non subsidized then don't complain when the phones are sold at $300-$1000... And the carriers raise the price of service, yeah good luck affording anything like that with this current economy, FCC MYOB...
    1. ress's Avatar
      ress -
      thx for share masta
    1. hollow0's Avatar
      hollow0 -
      Quote Originally Posted by eremeya View Post
      The FCC shouldn't regulate the exclusive deals between Handset makers and the carriers but maybe should institute a mandatory unlock of the exclusive handset after a set period of time, at the end of the subscribers contract, etc.
      i completely agree with that!!! Or even if the subscriber terminates the contract prior to the end date.

      Quote Originally Posted by ibby03 View Post
      All i'm hearing is a bunch of whining, at... was the only company smart enough to sign with Apple for this exclusive phone at the time, V Dub declined it and the other carriers didn't have the backing needed for the launch of the phone. If the phone sucked and wasn't as popular nobody would be complaining. "So Microsoft and the Xbox have exclusive rights to Gears of War and I think that's unfair, FCC you must do something!!" <-- Isn't that the same thing?!? It's just how it works... If everyone wants their phones sold non subsidized then don't complain when the phones are sold at $300-$1000... And the carriers raise the price of service, yeah good luck affording anything like that with this current economy, FCC MYOB...
      Amen!
    1. CZroe's Avatar
      CZroe -
      FWIW, even when supporting net neutrality, AT&T has always said that they want exemption of net neutrality rules for wireless carriers. IOW, it means less traffic shaping for AT&T U-verse/DSL Internet service and more traffic shaping (in the name of QoS) for AT&T Wireless.
    1. mdc929's Avatar
      mdc929 -
      Quote Originally Posted by Melech518 View Post
      This is getting very interesting...
      no doubt