Will the FCC Divorce AT&T from Apple?

[Michael Essany]

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.

[one1]

When you get greedy, one bad apple (PUN) spoils the whole damn bunch. Forever more.......... regulated.

[Melech518]

This is getting very interesting...

[xchemical]

Fuk the FCC like peter say in family guy it's side boob hour

[angiepangie]

Oh the drama!

[eremeya]

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.

[awesomeSlayer]

Hmm...Interesting and delicious

[Channan]

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?

[playboii]

Fuk the FCC like peter say in family guy it's side boob hour

lol "what is this....thats MY side boob!

[V.A.M.P]

The way I see is that I don't think is fair at all how at&t is playing the whole thing. is more like a monopoly run by At&t. I hope the FCC do Divorce AT&T from Apple.

[khiphone3g]

To be fair, phones should all be unlocked. You buy the phone so it is yours and it should be your right to do whatever da heck you want with it.

[gotjpeg]

To be fair, phones should all be unlocked. You buy the phone so it is yours and it should be your right to do whatever da heck you want with it.

alright so you want to pay the actual price of the phone and not the lowered price if you're on a contract?

[tudtran]

The way I see is that I don't think is fair at all how at&t is playing the whole thing. is more like a monopoly run by At&t. I hope the FCC do Divorce AT&T from Apple.

Good point. Since U.S. is allowed GSM and CDMA services. I think Apple should dealing with the other half.

[Cokeman]

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.

[inzandity]

"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

[Fallguy]

Is this all a moot point ? I thought AT&T's exclusive rights to the iphone were ending next year . I for one would love to switch carriers but I dont think the the FCC can or would do anything to stop AT&T .

[DayumQuitPlayin]

IMO I feel the FCC should do something. This exclusivity deal between AT&T and Apple has gone long enough. With all the lawsuits, customers complaining about the 3G shortages, dropped calls.. it's about time for Apple to start opening doors and give us more options. It has taken Apple and AT&T 2 years to finally get MMS on the iPhone? That's ridiculous.

I still have my 1st gen iPhone and AT&T still will not unlock it when I asked. 2G, 3G, 3GS.. we're on the 3rd generation iPhone and I cannot unlock my first one? That's just ridiculous. I paid the full retail price of that phone and I feel I should be able to do whatever I want with it since it is a product I've purchased.

Because of all this.. I absolutely HATE AT&T, just hate them. It's time for a change, seriously.

[cpotoso]

alright so you want to pay the actual price of the phone and not the lowered price if you're on a contract?

Not that way. The phone should be UNLOCKED, but if you break out of the contract you pay the termination fee (or wait until the end of the contract). The device itself should be yours to do as you please (as mine is).

[sk8er982]

To be fair, phones should all be unlocked. You buy the phone so it is yours and it should be your right to do whatever da heck you want with it.

I dont think you understand the subsidizing cell phone idea. The reason these companies lock their phones is to sell you it at a more attractive price.

Now not enabling the customer to unlock their phone after the company has made money back on the phone is completly OUTRAGEOUS! And then they have the nerve to try to make jailbreaking illegal?? F U A(T T)P P L E!

[Happy Noodle Boy]

To whoever asked about when the contract with AT&T ends, it's 5 years from when the first iPhone was released. So we're about halfway there.