US Government Looking Into AT&T iPhone Exclusivity

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The US Senate's Committee on Commerce, Science and Transportation is studying deals like AT&T's exclusivity for the iPhone, and how that balances business freedoms, technology innovation, consumer competition, and the effects on smaller, rural carriers.

In response to AT&T retail sales and services president, Paul Roth's assertion that exclusivity provides more innovation, lower cost, and more choice, PC World quotes Senator John Kerry's response:

"I accept the benefits you articulated but I'm having a difficult time trying to envision why an innovator, given the size of the market and the number of outlets, is not going to innovate to produce a product that is equally competitive [to an exclusive phone] ... because it wants to appeal across different providers,"

This exchange followed on the heels of the committee sending a joint letter to the FCC, which according to InformationWeek asked for a determination as to whether "exclusivity agreements are restricting consumer choice".

We know a lot of you want your iPhone on Verizon already, but should Apple and AT&T be allowed to come to whatever agreements each sees fit, or is there a roll for government to limit that for the good of consumers who's interests may diverge at times from corporations?

[Thanks to Icebike for the repeated heads up]

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, The TV Show, Vector, ZEN & TECH, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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There are 127 comments. Add yours.

iphonemilk says:

I'm so sick of our US government getting involved in Private Business.
so many americans have no clue of what's going on.
This bullying needs to stop.
So ATT has an Exclusive deal with Apple for the iphone, OH WELL BOOO HOO. that was a BUSINESS DEAL that was made. The government should NOT be getting involved with this.

Andre says:

If they want to determine whether exclusivity agreements are restricting consumer choice, why don't they ask the consumers? They're the ones who know the answer.

BRE BRE says:

OMG WONT THE GOVERNMENT WORRY BOUT SUMTHIN ELSE!!! GEESH IT ISNT THAT SERIOUS!!!
IT'S LIKE LIKE AT&T AND APPLE ARE SALEing DRUGS!!!
LOL...
THE GOVERNMENT HAS WAY TO MUCH TIME ON THERE HANDS LOL

Mike says:

This is amazing.
This won't create competition?
If the iPhone is available ONLY on AT&T, wouldn't that create an enormous incentive for other phone manufacturers to create better, less expensive phones on other networks? AT&T is the service provider and the iPhone is one of many devices that AT&T offers. There would be hints of Antitrust violations if you could only get AT&T's service if you bought an iPhone, and not the other way around.
Unfortunately, many (if not most) of our congress-people are egomaniacs who think that the country will benefit if they get involved with everything. I agree with one of the comments above in that far too many Americans have no clue what is going on.
Back off. Fix the economy. Bring the soldiers back.

Frank says:

Hear we go again. Doesn't the Congress have more things to worry about: economy, jobs, housing market etc... The US Govt needs to keep out of the private sector. I think this should serve as a real wake-up call to all citizens. If the Congress somehow finds a way to break-up the Apple & AT&T partnership are we really a nation of capitalism anymore? (cough, cough Socialism...) Also Verizon testified on Capital Hill as well on this issue & they backed AT&T. It's all the small tiny carriers complaining about the exclusive AT&T deal. Even though AT&T does not always have their act together (cough MMS), Congress needs to butt out!!!

iphonemilk says:

Assistant during a Meeting with Sprint and Verizon- Gentlement Apparently Apple signed the deal with ATT only, it's Exclusive.
Sprint- Wait a second... you mean we have to compete?!?1
Verizon- Well that's not fair at all!! NOT FAIR!

Fraydog says:

While I think that AT&T could certainly do a better job, I think the government has much bigger and more important priorities to deal with.

Dyvim says:

"The US Govt needs to keep out of the private sector"- yeah 'cuz that worked so well with Wall Street and the banking/mortgage industry... And don't get me started on how the private sector should be left to regulate their own carbon emissions and pollution levels.

mystic says:

It's utterly unbelievable that politicians believe that this has anything to do with them.

Debbie says:

The government has better things to worry about other than if a cell phone company has an exclusive deal. Apple & ATT are not shutting out the market. Yes, there is a demand for the iPhone, but that just means that the other companies needs to compete and make something equally appealing.

orich says:

If congress hadn't interfered in the mortgage business in the first place by forcing mortgage companies to lend to unqualified borrowers, the mortgage and banking industry would have been fine. If you want the economy to be repaired, yes, let it repair itself. It's called market correction. The government should stay out of the private sector. We now have socialized the auto market and are headed twords socialized medicine. Lets not have the government deciding who should get what phone.

RanMan says:

What a surprise, Our government spent 5 hours debating the biggest tax increase on the American people in history, and they have probably spent more time on this already. Can you say credibility issue?

sting7k says:

Waste of the Feds's time.

cherryhead25 says:

Don't forget about all the time the gov't invested investigating steriods in baseball! Tax dollars WELL spent!
Thank's Nanny State!

FormFire Glassworks says:

If I'm not mistaken, Apple went to Verizon first, and they wanted to cripple the phone like they do with so many of their other phones to force people to use their other services, and Apple said no. Whose fault is that?
Not much different than Garmin, who wanted to make their own phone and declined to partner with Apple. Good news for TomTom.
Long-term decision-making, anyone?

Vic says:

@Mike
You're looking at this wrong. Exclusivity does restrict innovation because it's manufacturers, not carriers, who create these devices. For example, with Verizon, LG and RIM are sitting in a comfortable spot in that carrier because they don't have the competition from Apple (directly). Verizon customers will pretty much have the choice of there products (whether they want a smartphone or a non-smartphone). Now, if Apple iPhone was available with Verizon, it would put more pressure on LG and RIM because now they have to compete directly with the iPhone within Verizon, not just from AT&T.

Daniel says:

AT&T being the only iPhone carrier is not good for the public and not good for competition. The government should stay off of business decisions, EXCEPT when those decisions create market inefficiencies!
Can any of you tell me why you benefit from any phone being exclusive?
I'm sick of hearing people "free market" and "stay off of private business" bullshit. Capitalism and the free market are not perfect, and any checks and balances are welcome as long as they're not introducing inefficiencies, just preventing them. Monopolies such as Microsoft and oligopolies such as telecoms need to be regulated if you don't want to be paying 20 cents for a 160 byte text message.

Daniel says:

@Vic you're absolutely right. This is the telecoms feeding crap down gullible people's throats, seeing if they bite. Apple did not invent the iPhone with the intent of making it exclusive, it invented it to fill a huge gap in consumer needs. Exclusivity happened to be the sweet deal AT&T wanted. If Sprint was the one with the iPhone, I'm fairly certain that AT&T would be crying for government to get rid of the exclusivity deal.
This example reminds me of when Microsoft was crying about IBM's market power on the mainframe, after they claimed the mainframe was dead, and after they cried because of anti-trust regulation.

GabeU says:

Govt defintely needs to stay out.
Why only pick on Iphone?
Every carrier has exclusivity deals on certain phone models,so if they want to truly "open competition" then just Force All carriers to sell Unlocked phones.
Then these politicians will see how happy they make consumers when everyone has to pay hundreds more for a phone.

Amit says:

I have had first gen iphone for 2 yrs now
and even after expiry of 2 yr contract
apple and ATT refusing to provide unlock code
forcing me to unlock the iphone on my own
it should be left to customer what network
they need to have
ATT network is pretty awful and lots of times
3g network goes to edge
US govt should ask Apple to probide unlock code
for people paying full cost or after expiry of contract

Daniel says:

@GabeU because current phones under exclusivity rules are disposable pieces of junk that don't stimulate competition. they could go after blackberry, but that's available in all networks. so if the Pre takes off, that could possibly be the next target.
"Govt definitely needs to stay out". Who are you, Rush Limbaugh? Put some meat on those bones.

justin says:

@Dyvim:
Really? The government wasn't involved in the mortgage meltdown? Heard of the CRA, Fannie Mae, Freddie Mac?
Government meddling was the main cause of most of this.
And no I won't get you started on CO2, because I'm sure you've got some great insight on that....

Blake 2 says:

What a joke! If I want a BB Storm, then I'll get on Verizon. If I want a Pre, I'll jump ship to Sprint. And if I want an Iphone, I'll get on with At&t. What's the problem with this. The iPhone would not be the same if it was on Verizon because of their bloatware, which is why Apple ultimately said no. I wouldn't mind if the Iphone ended up with other carriers, I just don't want my tax dollars deciding it.

Entertainment72 says:

Goodness gracious.. STHU Kerry! Washington SCREWS up EVERYTHING they touch.. I'm SICK of it already.. stay the F away already!

Al says:

It's nice to see that there are a lot of free market conservatives on here. Where were you guys in November, we needed you.

cyberbob says:

@Daniel. The government does need to stay out of private industry. This is an iPhone we are talking about. Cellular service and devices are "frills", not basic utilities such as gas, water and power. The fact of the matter is that there are plenty of alternatives on other carriers. Many phones do email, texting, web browsing etc. By saying the iPhone hurting competition, you'd have to say that ever other device with the same features as the iPhone are just junk. I am an avid iPhone/Apple fan, but don't consider every other item junk.
Your argument would only hold water if the iPhone were the ONLY device capable of making phone call or sending text and emails and only available on AT&T. If not for the iPhone being exclusive on AT&T, it's doubtful that Palm would have bothered with the Pre since Sprint would already have the iPhone.
The iPhone is a frill and leave it to a frivolous and controlling government like we have now waste time and money trying to force itself in another private industry. Obama was elected President, NOT KING AND CEO OF THE WORLD.

Truth says:

What the government should get involved with is the outrageous two year commitments and the text messaging crap. If you have a data plan why should you get charged for messaging.
Looking at the function of the Government it is intended to protect the people. If they can find real and substantial evidence that phone exclusivity can impair consumer choice then the parties involved should be investigated.
I have no problem with Gov stepping in private business as long as they are doing it with the intention of protecting consumers.
While there at it why dont they do some monopoly busting and split up Comcast.

ermax18 says:

@Dyvim, yes lets not get started on cap and trade. People bitched about speculators driving up the cost of fuel. Just wait and see what speculators do with cap and trade. This new energy bill has NOTHING to do with generating clean energy. NOTHING. It is just a way to generate tax revenue and make some people filthy rich. Al Gore much be so excited that his brilliant business plan is all starting to come together.
But back on topic. The Gov has no business here. Just looks at all the phones coming out trying to beat the iPhone. This deal Apple and ATT have has done nothing but motivate people to create better products.

justin says:

@Truth:
Read article 1 section 8 of the us constitution... the powers of congress are listed. if you adhere to the original meaning of the text, then i don't think you'll find much support for your statements.

sting7k says:

I'm with Truth, they should stick to grilling the TelCos about text fees and data rates, was sad to see it get pretty much zero news coverage.

cyberbob says:

@Truth: Like China protects it's people? You don't need PROTECTING from cellular phone company. There is no law forcing you to get it nor are you "entitled" to it if you can't afford it or feel that the terms of the contract aren't fair.
All of you people who think the Government should step in and start running things are people who haven't had the government meddle in whatever your interests are. Wait till they think that not only CEO's of banks make too much money. Wait until they tell Bono or Brad Pitt they the are making too much money and the government steps in to regulate the entertainment business because the prices of CD's are movie tickets are out of hand.
See how many concerts and albums Bono will pump out every year if he gets salary capped at 300k per.

jim says:

WHATS NEXT YOU CANT HAVE EXCLUSIVE VIDEO GAMES ON CONSOLES LIKE PS3 AND XBOX 360, MOVIES CANT BE EXCLUSIVE TO MOVIE STUDIOS THIS IS RETARDED. THE GOVT NEEDS TO F OFF!!!!!

Truth says:

@EvilHomer
You sound like a paranoid Neocon. Let me guess you voted for that nut job Ron Paul?

cyberbob says:

@Justin: These guys have never read the Constitution and wouldn't be able to tell it apart from a grocery list.
@Sting: Or, you could just not have a cell phone if you don't like the rates or service. Or you could have a cell phone with no texting plan. Believe it or not, you don't HAVE to pay for those things nor are they necessary in you making it through life.
AGAIN, THESE THINGS ARE FRILLS PEOPLE! Many people go their whole lives without a cell phone and text messages.

only1jonarius says:

AT&T does abuse its exclusitivity. If it had TRUE competition with another carrier that carried the iphone. The prices for data & text would NOT be as expensive. Since AT&T is the only provider with the iPhone they lack respect for the customers. Thats why they are in NO need to rush the MMS issue. They know that if you truly want an iPhone you have no choice but to use AT&T with their expensive plans. AT&T exploits their iphone users to the fullest. It is WRONG!!! If you want to "exclusively" carry the iPhone than PLEASE be capable of supportng ALL of its "BASIC" features without charging an arm & leg to do so.

ermax18 says:

Truth@ SMS is a service that has a value therefor it has a price tag. If you don't think it is worth the price then don't use it. ATT is a business and their goal is to make money. If the price is to high then people will not pay. If the Gov steps in and tries to regulate services like SMS then the providers will just find another ways to make money. Like no longer having unlimited data.

iphonemilk says:

I'm glad to see a lot of positive responses from people in the government needs to stay away department... i honestly thought i was one of the only ones who felt like this, Of course i live here in D.C. i'm surrounded by Liberals and idiots and curroption. oh well. Glad to see a lot of people agree.
the other major thing people are forgetting here is the carriers use different technology
if the iPhone was on ATT AND Verizon it would need to be 2 complete different phones as far as Signals go. Which would actually end up HURTING apple more then anything.
The government keeps on getting involved in everything... and making it worse. glad to see that people are realizing this.

Lolipopjones says:

The problem the government inquiry is not taking into account is the different cellular technologies (GSM/CDMA) and if product exclusivity is wrong then we run into a whole host of problems in other areas.
Also to the person that says Apple did not want Exclusivity.. You are wrong. Apple has forced Exclusivity in every country that allows such dealings with carriers. In Europe you actually have a market to sell unlock devices which due to their unlock status do not get subsidized. Apple still went with exclusivity in a part of the world unlock devices are popular and have a considerable market.
The Manufacturers have a need for exclusivity because it gives the Carrier a reason to subsidize the product. Note that the manufacturer wants their devices sold with subsidy because they aren't taking the hit. They make the profit selling the devices to the carrier who then takes a hit selling it with contract to the consumer because they are selling it for LESS then they purchased from the manufacturer.
Every device we buy from a carrier is a carrier exclusive because that device cannot be taken to another carriers service. If they want to "Stimulate" competition then they need to make all the carriers on one Standard and turn them into dumb pipes.

iphonemilk says:

@Only1
it's called competition you clown. Just like the other above poster mentioned, You've got the same thing for Games on Xbox or games for the PS3, exclusive titles.
IF SPRINT AND VERIZON have a problem with this, they need to COMPETE and make a better product. that's how it works.
once again i will say this
Assistant during a Meeting with Sprint and Verizon- Gentlemen... Apparently Apple signed the deal with AT&T only, it’s Exclusive.
Sprint- Wait a second… you mean we have to compete?!?1
Verizon- Well that’s not fair at all!! NOT FAIR!

ermax18 says:

@only1jonarius: ATT will abuse iPhone customers as long as they keep coming. People are "voluntarily" moving to ATT for the iPhone. I was very happy with my old provider but I really wanted an iPhone. I though long and hard about whether I was willing to put up with ATT's crappy pricing and crappy network just to have a great phone. But I felt the pros out weighed the cons and went forward and don't regret it one bit.
You have to pay to "PLAY". Keyword here is play. No one is dieing because they can't afford an iPhone. It is a toy not a necessity.

Daniel says:

@EvilHomer I do agree with some of what you said. It's just cell phones, and besides making phone calls (a necessity), everything else is frills.
In a way, keeping the phone exclusive could actually help competition by keeping Apple's market power in check, if the iPhone were on every network, Apple as a device manufacturer would have a stronger and more non-competitive market position.

Daniel says:

@iphonemilk
Telecom companies DO NOT MAKE THE CELL PHONES, it's been mentioned here a couple of times, but you refuse to read into it. VERIZON DOES NOT OWN LG OR THE OTHER WAY AROUND.
TELECOM COMPANIES COMPETE AND IMPLICITLY COLLUDE VIA SERVICE COSTS, AND EXERCISE OLIGOPOLISTIC MARKET POWER VIA EXCLUSIVITY DEALS
maybe in caps it's easier for you to read, troll?

PSM says:

If the government wants to get involved with the telecoms and protecting the American consumer from abuse by large corporations, I would like to see them do something about the ridiculous charges we have to pay -- such as additional money for text messages that use almost no bandwidth, unlimited plans that aren't really unlimited, and having to pay extra to use the data we already paid for, that is already capped, depending on what we are doing with it (i.e. tethering). In short, the ability to use the carrier as "dumb pipe." And also to allow people to unlock their phones before the phone is obsolete, which is related to the exclusivity problem.
And how does one force two companies to do business with each other? If Apple only wants to work with AT&T do you shove them in a conference room with T-mobile execs and lock the doors until they agree to sell the phone? How do you force Apple to manufacture a CDMA phone that doesn't otherwise exist?
Honestly I think the telecoms are too well dug in for the private consumer to protect themselves (What are we going to do? Boycott all of them and not have a phone?). They are separate companies but they all have basically the same policies so they function like a monopoly. I don't mind a little help from the government, but they're not targeting the real problems.

Thomas says:

I think it's funny that there are so many phones I see for Verizon and Sprint, yet never for AT&T. They start crying once they realize how popular the iPhone is. Don't these other companies have their exclusive phones? Sorry it isn't as popular at the iPhone.

Josh says:

i can't believe there are so many people who get so pro one way of thinking that they can't possibly look at other aspects. Its not just the i-phone, that is just one easy example. The pricing of phones is ridiculous and carrier customers service/ and general service is sub par. Non- exclusive rights would basically mean- you could get any phone- putting pressure on the manufacturer to create a great phone rather than the carrier trying to pressure the manufacturer. Carriers would then be able to focus on competing for customers based on their service rather than customers having to put up with sub par service just to get a decent phone. Carriers become complacent- the customer has no choice- if they want this decent phone, they'll put up with pretty much anything.... I agree I think the government has its hands in too many things; however, in this case- it would only serve us better

Daniel says:

PSM and JOSH:
Very clear thinking. We have bigger problems with the telco oligopoly than iphone exclusivity. The cost to us is immense. I think that the government should start by putting a stop on the big three (and a half, T-mo) from purchasing smaller carriers that pop up, and forcing them to allow people to lease antenna usage.

Truth says:

Most of you anti-government people don't realize that the telecoms don't give a damn about competition. If they did why do they continue to gobble up smaller start ups?
All big corps care about is money and maximizing their return while eliminating competition thereby hurting customer service, better rate plans, etc.

Ben says:

lol I'm laughing my ass off at everyone saying the Government should always stay out of the private sector. In that case enjoy being robbed by corporations foolish Americans.

cyberbob says:

@Truth: What's paranoid about wanting to keep a free market capitalistic society? People like you are just afraid that if the government doesn't take care of your needs, you won't make it through life because you don't have the confidence in yourself to earn a decent living. You have no ambition or drive to better yourself. You only want to be subsidized by those who do.
You think if I make twice and much as you a year that I have to give you half the difference because I'm greedy if I don't and that it's fair that I pay your share. You think you are entitled to every frill that I have even if you aren't willing to work as hard for them.
No I didin't vote for Ron Paul, but I know who you voted for. You voted for the guy that said Bush was spending us into oblivion and then, in four months in office, spent more money that Bush did in EIGHT YEARS.

Lolipopjones says:

The one thing people are not talking about is what happens to the american cellphone industry once carriers have no reason (or ability) to subsidize phones. Exclusivity is the excuse to subsize phones as the carrier has a reason to front the cost of the device. The iPhone is a great example of $599-$699 device that the carrier subsizes to 199-299. How many people in the states would actually buy that phone at its full MSRP?
A phone becomes carrier exclusive the minute it is locked into a certain network. The only way to end exclusivity is to force unlock devices. Its no good to the consumer that they must buy a phone and then if they don't like the carrier must buy equipment to use on another carrier. The problem with that idea is there is no standard.... you have CDMA vs GSM in the US so people will still run into equipment issues.
This is all BS if anything in the cellure communities should be looked at then it is the Rate plans. People pay too much for their plans and its a shame that we cry over which carrier can carry a handset while all carriers are raping us on the rate plans.

Mike says:

I'm sorry but the idea that Apple signing an exclusive deal with AT&T hurts competition is ridiculous. I was a Verizon customer before the iPhone came out and switched to AT&T because the iPhone is the best phone on the market. That's called competition, people. Had Verizon had a product equal to the iPhone (not necessarily the iPhone) I wouldn't have switched. Apple is a great company with superb ideas, however, other companies are able to be great companies with superb ideas also!
AT&T intelligently paid a lot of money for an exclusive deal with Apple. Other carriers could have done what AT&T did but they didn't. I don't understand how anyone can say that the government should be looking at this.

only1jonarius says:

@iPhonemilk ur screen name is "iphonemilk". YOU ARE THE CLOWN!!! 

Lolipopjones says:

@Only1: really AT&T abuses the iPhone data plan? Because i swear Verizon Wireless is 30 a month for all data plans for "Data Devices" aswell.... Infact VzW makes you pay 30.00 a month and then makes you pay an extra 2.99 for Visual Voicemail...
The truth is outside of Sprint all carriers force a 30.00 a month data plan. VzW's is more barebones the AT&Ts. The funny part is Visual Voice mail is the ultimate Bullshit. You are paying to unlock a FEATURE YOUR PHONE IS CAPABLE OF. Its like HP making you pay a monthly subscription fee to use your graphics card on your PC.

Truth says:

@Evil Homer
You're delusional if you think we have a free market. There is no such thing. Look up what a free market it and you will find it is an idyllic dream. And you sound just like a Republican talking about how I don't have ambition and drive. LOL you don't even know me!

Hakala says:

Imagine if apple decided to put our sweet little iPhone [right from the start] on AT&T sprint verizon and tmobile. Each of these companies have -different [priced] data plans -different [priced] calling plans -some have no sim cards, some do. The sim card issue, that gives us multiple hardware devices to serve both types of carrier. The data plan/voice plan: this in turn would provide a wider variety but could also shift consumers towards the way cheaper carrier. The more "capped off" plans. This would take us back to square one: the now developing socialistic government butting in to private enterprise. Just like it is now. Obama already fired the CEO of GM and put in a new one of his choosing. That's beside the point. One last thing that I will mention is: GSM(AT&T) and CDMA(sprint). That's a problem. That's my opinion. Period.

cyberbob says:

@Truth: I know you. You are the same cookie cutter liberal that thinks anyone who makes more money than you is evil. The same liberal that thinks you are entitled to everything just for being born.
We may not have the utopia of free markets, but we have the best out there. I can, regardless of race, color or creed, open up a business and work for myself and make as much money as my brains and hard work will let me. It don't matter if YOU, my fellow American, doesn't think that I'm entitled to make as much as I do because YOU don't agree with it. IT'S CALLED PERSONAL FREEDOMS. It means that if 100 of you libs think that I don't deserve to earn a million dollars a year, I can do it anyway because I have a PERSONAL freedom to do so.
You as a Lib, think that everyone should work for the greater good of the majority. So, if I make a million bucks a year then you as a group can decide that that is too much and not ALLOW me to make it. In a FREE market society, with personal freedom being at the fore front, it doesn't matter what you think. Or 100 of you. I still have the right to do so.
You tell me which other country allows me to do this?
If you want to work for the greater good of the state, go for it. There are many countries I can list that you are welcomed to go and be told how much you are allowed to earn. They'll also give you a list of your other limitations as well.
I also know that no one educated in the Constitution could make the arguments that you do and not be a socialist by choice. So you are either a Statist or a Socialist or uneducated in the foundations of this country.

Emily says:

Butt out, gov't. You've done quite enough already.

Brad Zimmerman says:

Unless I'm mistaken (I don't live in the US any more, so...) aren't Sprint and Verizon both using CDMA? It's a bit odd to say this, but AT&T is the innovator here: they got on the GSM bandwagon, bringing their network in line with most of the rest of the planet's various mobile phone service providers.
I'm sure that when Verizon and Sprint get out of the kiddie pool that CDMA is and finally dive into the big boy's pool that GSM is... that they'll be able to approach Apple and put forth a competitive bid. Until then...

iphonemilk says:

@Evilhomer
Bravo Sir, Bravo

Daniel says:

@EvilHomer
You are confusing a great many different situations together into a black and white conservative vs. liberal debate.
1- in the free market, sellers and buyers work together to set a price. that market can and does fail for several reasons, one of which is imperfect competition (such as walmart muscling out suppliers that won't meet their demanded price). this is NOT the free market - in the free market, firms are able to enter and exit as they please, and they have the opportunity to compete. in the 'popular view' of the free market, companies are able to do as they wish, because anything justifies maximizing profits. this is NOT so.
2- redistribution of wealth is not a matter of free market economics. it is a matter of fiscal policy and public decision. this is not a matter of liberal or conservative, it's a matter of you choosing or not choosing to pay for medical bills for a poor old lady that can barely walk.
3- the ability to begin a startup company and do as you wish is a DIRECT function of whether their is fair competition or not. nobody, for example, can start a telecom company regardless of capital. why? because the existing companies work hard to eliminate competition through means OTHER than price, which is how the free market is supposed to work! believe it or not, advertising that your product is superior to another regardless of truth is not free market economics. it is a distortion of information, and therefore market failure.
So who do we trust? Private companies to unfairly jack up prices to the maximum we're willing to pay therefore eliminating our ability to enjoy consumer surplus? (if you don't know what that means look it up), or should we trust the government to limit economic growth by looking at all decisions through a magnifying glass? As far as I'm concerned, both sides are controlled by people that only seek to serve their own interests, and therefore, the answer lies somewhere in the middle. Business cannot exist without government, and the reverse is also true.
This doesn't need to be such an emotional debate, but one of seeking a fair solution so we can all grow freely within our business decisions, but so we can also sleep at night knowing that the EPA is taxing the hell out of companies that are quietly pumping PCB's into the Hudson River. It's like a game of Spy vs. Spy!

deviantdj says:

If this becomes an issue, then they should also look at how rim only puts certain phones on certain networks too. They are just going after this because its a bigger player. And my guess is this, Politician wanted an iPhone, needs to be on a certain network for some gov't reason, couldnt get it. Oh well too bad. Deal with it. I feel sorry for you guys in the states, I really do.
At least in canada we have a choice rogers or fido (only gsm nets in canada), regardless if they are the same company. My dad wanted to get an iPhone for himself and my mom, so I did the calling. Even tho the same company, both a different price structures for their plans, and only one of them offered rewards and network calling for free. So really, the choice is there.
Come a year or two when bell and telus get their network fully in place, will we see if we are still locked to the two carriers. But you're all right that the gov't shouldn't be budding into the business operations and deals. However it is the gov't prerogative to ensure a balanced competition. When you look at the data and see how many people are switching, it does hurt the other business'. So to keep them all from hitting the point of bankruptcy or bailout, they are getting their nose into it before it happens. Which in my opinion is a smart move on the gov't part. However they do have more important things to worry about, you're right.

MRidgeway says:

Wow... For a second here, I thought I was reading on a Fox News website. LOL! First off, I am a proud President Obama voter. I am a democrat!! With all that said, I too believe that gov. should stay out of the private sector. I believe that if you are making a crappy product, we the consumer will not buy it. I was totally against all the bailouts!! Especially when it's my money that's keeping them alive. At the same time, we must have some type of checks and balance system or regulation. I'm sorry, but us as a people are greedy and selfish. The problem we have in our country is that the business owners or screwing their own employees. You would think by giving the bigs the tax break, that they would pass it down through their company, but they don't. Which is why we get Companies/CEO's getting bailed out for doing a horrible job.
Regarding the topic at hand, why is our gov. spending time on this? I really consider this a minor issue with all the stuff we have going on now. Would I love for the iPhone to be on different providers? Yes!! I would love to see them compete for our money, but at the same time why are the other companies not making a better product?

MRidgeway says:

@Daniel
Great way to state it bro!!
bravo!! bravo!! bravo!!

ermax18 says:

"You would think by giving the bigs the tax break, that they would pass it down through their company, but they don’t."
Hmmm.. So if you increase their taxes what happens?

Daniel says:

@ermax
it all depends on the elasticity of demand and on the tax base the taxation is on.
if consumers are sensitive to price increases, meaning that if the price for a good goes up they go buy a substitute, the company will bear the burden of the tax. empirical evidence has shown that this is not the case with many products out there, due to brand loyalty, lack of what people consider to be substitutes, etc.
also, if a tax goes to every company out there, the overall price level is likely to increase, therefore increasing the prices for substitutes as well, meaning that consumers bear the burden of the tax. but if the target of the tax is narrow, then consumers are more likely to purchase similar products, meaning that the taxed company will have to bear the burden and keep the price at the same level. this goes to my previous point above.

icebike says:

Look, I just want a device that is mine.
All your iPhones belong to ATT/Rogers.
Its NOT your phone.
To move away from ATT/Rogers, you have to commit a crime (in Apple's opinion).
If you purchased you iPhone in Italy, you can take it to any carrier you want. (After you pay your ETF if you had a contract.).
Now which country has more freedom?
This is nothing to do with Free markets. It is about what you THINK you own.
Carriers can be exclusive dealers. I'm fine with that. I'm fine with going to a Chevy dealer to buy a new Chevy.
I'm not fine being told the car will stop working and the warranty voided if I use Texaco gas instead of Shell gas or have the oil changed at Jiffy Lube instead of the dealer.
Don't suggest I have to jailbreak to use what is mine.

Daniel says:

icebike has a point, until you pay what your phone cost back to the carrier, it is still 'their' phone in the sense that if you cancel very early, they could ask for it back. i don't see what that has to do with exclusivity.

david says:

this is far from the worst thing that our new central planners have in store for us. living under these anti-freedom neo marxists is really going to suck.

Matthew says:

What a waste of taxpayer money.
To carry the car analogy, if GM wants to sell a car that can only run on Shell gasoline - fine, that's their decision. And if that's a total flop because no idiot would buy that, that's their problem.
If you buy the GM knowing it only runs on Shell gas, who's problem is it if you can't run it on Chevron gas? Yours.
Its not really relevant about who paid for what, either you and GM come to an agreement about the car - or you don't and go elsewhere. You don't turn around and use the government to say Corvettes have to be available at the Ford dealership.

elginthompson says:

While I agree Congress has more pressing and material issues to address, ANY help at breaking up this unholy marriage would be appreciated. I would pay 2x my current phone bill to have iPhone supported by Verizon. Prior to purchasing an iPhone, I was provider agnostic. After a few months with AT&T, I would gladly welcome government intrusion to be rid of them.

Andrew says:

If the carrier wants to sell me a phone for $199 and then charge $175 if i cancel early and make that a part of the contract (and let me keep the phone); then the carrier made a bad business decision. I should still be able to unlock my iPhone (as I can do with almost all other GSM phones) so i can put another SIM in when i want - especially if I stay with AT&T but I want to make cheap local calls when i travel.
This is the only real point the government should address. Not forcing Apple to make a CDMA iPhone or let T-Mo offer it.
As it stands now, when my contract is up and I own my iPhone, I can't use it on any other GSM network. Even after spending $3000 during my 2 yr. contract. AT&T will not unlock iPhones even if the contract is fulfilled.
So really people are paying for the "privilege" of using the iPhone for the time they use it.

Hmm says:

Dont YOU all have something better to d. Than sit on this website while your at work? Get a life people
att is horrible .... Im sick of the spotty cell service and neglecting customer service- my iphone drop calls like they are hot

Matthew says:

I agree, if you purchase a phone outright or pay to terminate a contract then AT&T should give you a unlock code.
The difference comes in what we think AT&T should do, vs. what the government should be allowed to force them to do. Government exists for our protection, not a method of shaping business into what we want. Shaping business practices such as these is the responsibility of the consumer.
Remember you can always just walk away and live a fulfilling like with out an iPhone.

icebike says:

@Matthew:
All government has to do is make it illegal to sell a carrier locked phone.
Many countries have such a law, and guess what!?
The Cellphone industry did not collapse in those countries.
Apple already makes such a phone. Its not like the government has to manage the entire industry.
How many of you "keep government out of business" types would IMMEDIATELY switch to the other side of the fence if "Microsoft" was substituted for "Apple". I'm betting 80% of the free market ranters here are Apple Fanbois first and foremost. There has never been a time when Government was not involved in the cell phone business. Get over it.

cyberbob says:

@IceBike: You are so off base it's laughable. When you buy an iPhone it is you iPhone. If you discontinue service with AT&T, you can still use it fully with the exception of the data a voice network. You can still hook it to iTunes or wifi for music and apps. You just can't use it on another network.
HOW IS THAT DIFFERENT FROM ANY OTHER DEVICE YOU GET FROM ANY OTHER CARRIER?? I can't take a phone from Verizon and use it with Sprint, Altell or any other CDMA carrier. The iPhone is no different than those other carrier subsidized devices except that you stop service on a Verizon device, you've got a brick. You stop service on an iPhone, at least you've got an iPod Touch. See just how useful your Blackberry is without the service books from it's carrier.
@Andrew: Not ever carrier will unlock your phone after you cancel service. TMO is the only one that I know of in the States. Again, Verizon, Sprint, Altell are all locked to the carrier no matter what.
@David: I've never seen or heard of a carrier demanding a phone back after service was cancelled. You guys are just throwing out nonsense to make AT&T somehow more evil than the rest because they were actually smart enough to jump on the iPhone when offered.
You people that are demanding government intervention on our private industries will regret it. Just look at the Chinese. Everything the do they say they do for the best interest of their people.

cyberbob says:

@Matthew: Thank you! If you don't like a companies prices or policies, find another. Don't try to compel them to bend to your demands though GOVERNMENT intervention. Protest with your wallet. If AT&T were a monopoly, this might be an issue but they aren't and you have so many choices it's not even funny.

Matthew says:

What part of your life is violated by the ability to sell a carrier locked phone? That should be the test for the creation of a law, not to see how much regulation we can impose with out crushing an industry.
You want an iPhone. The iPhone comes with certain rules attached. You either abide by them and have an iPhone, or you don't. Its pretty simple and more or less applies to all cell phones in some shape or form. You were never tricked into buying any of this, the rules were out there for your knowledge and you made your decision.
As far as the fan boy crap, this is the only apple product I use. And frankly if it wasn't for the wide range of applications available on it, I'd rather go back to my Blackberry. I deemed the applications a worthy benefit that outweighed the cons and made the switch, instead of contacting my congressmen to make App Store available on the Blackberry.

ermax18 says:

@icebike: I am all for making the government conform to the Constitution and I am first and foremost NOT and Apple fanboy. I am so far from a fanboy it isn't even funny. You have no clue how hard it was for me to buy into the Apple Tax. I suspect you are right though that if MS was substituted for Apple in this case that a lot of people would be all for government intervention. For some reason it is "cool" to hate MS even though they make some of the best software on earth.

iRoc says:

Wow what a steamy load we have here.
First off the iPhone and all smart phones are luxuries! No one needs an iPhone. Everyone is not entitled to an iPhone. I do feel the full price is extremely over priced and a serios , but the government doesn't have the right to step in and tell any business what they can sell or offer and where they can and can't sell or offer it.
All this talk of mononpoly and oligopy. AT&T has no monopoly on the iPhone. To have a monopoly you must control every aspect of a product. From manufacturing to distribution and mantainance. Oh Apple sounds like you gots a lol monopoly there, but that's another matter all together. Telcom companies dint have a monopoly, because I can get phone service from my cable company.
With the iPhone being offered only on the AT& T network in the US forced sprint to grab the pre. That's free market compition. Perhaps apple should be made to offer up an unlocked iPhone for the full price, but once again that is a different story.
The free market vs socialism spread the wealth thing well. Any one that feels they deserve what others have without working for it is a spoiled brat. I don't hate Steve Jobs cuz he has billions of monies. I hate Steve Jobs because he is a over bearing prick that charges too much for his goods. If that weren't enough reason he then uses free source code monkies to do all the hard work for him and does compensate them, and tries to make what they have dine for him illegal for others to do. He allows windows to run on his hardware while not allowing his os to run on non apple hardware. That's pretty d I c k ish and unfair.
The libs have this one all wrong I'm sorry to say, because they aren't looking at the real picture and are trying to blame entities that are not really at fault. You don't like AT&T well pay full price for an iPhone then use the Dev-Teams work and go hop in Tmobile, but I bet after a week you'll wish you had AT&T again.
Spreading the wealth is the most spoiled and stupidest thing I have ever heard. Get off your duffs and go make some money. Oh you just can't get anymore than you get? That means you have no talent or inteligence and don't need to be making more money. See some where in the 80's we as a nation stopped being truthful with people. Not everyone has what it takes to be rich. We started telling stupid people how smart and special they are when it's not true. When you tell sub par people they are smart and special all you realyl do is take the spot light off those that truly are. Now days every one is smart and special and it's just not true. Dint even get me started on slave repirations, because there is none alive that had anything to do with that. It's just a way to rake from one and give to another. That whole slave thing needs to be dropped on tjlhe grounds that NO ONE alive today is or was directly effected by it. Seriously people stop letting people use you to advance their agendas, because in reality those people do not care about you, but only care about themselves.
The only reason government has to enterfer with the private sector is when peoples lives can be in danger, or a company acttually has a monopoly and is forcing other companies to go under because of said monopoly. So at the moment Apples monopolysos legal, but their hypocritical crushing of startups offering hardware to run their os is not legal. It's a huge waste if time and money for any look into AT&T's iPhone exclusivity! For there is another way go look into the Dev-Team and stop complianing about how unfair the world is. Take your life in your hands and make it better for you and stop expecting the government to look out for you in your day to day life. You are an adult and if you don't make a mill a year figure out how you can and do it.

iRoc says:

One last thing if the government forced Apple to sell on other carriers Apple would just stop making the iPhone, cuz it would no longer be the way Steve wants it.

fassy says:

I think you are missing Icebike's crucial point here, which is an objection to a company (backed by the government) dictating what you can do with your own property AFTER YOU HAVE PURCHASED IT To carry Matthew's car analogy, quoted here, a bit further:
--
If you buy the GM knowing it only runs on Shell gas, who’s problem is it if you can’t run it on Chevron gas? Yours.
As a free marketer, you think the government should not interfere with GM's ability to sell such a car. I get that. HOWEVER, if I figure out a way to run my car on Chevron gas, why should GM be able to prohibit me from modifying my personal property as I see fit? The courts have ruled time and time again that GM cannot prevent me from using Chevron gas, putting in an electric engine, or strapping on Monster Truck tires. The government can, if my modifications violate safety laws, but GM has no such ability, nor should they. GM can and should be able to assess contract penalties or void my warranty, certainly, but otherwise, the car is my property, with all the ownership rights and responsibilities that entails. Even lessors of cars have these rights, if at the end of the lease they will own the vehicle. (Most contracts are very specific as to what you cannot do if you expect the company to take the car back at the end of the term.)
Somehow, makers cel phones (and all tech products) aim for different treatment. They want freedom from government when it comes to making and selling their wares but they want the government (via legislation like the DMCA) to intervene to strip consumers of the rights they enjoy with every other product.
That is the problem. If you want to be treated as a free market, allow your customers the same freedoms. If you insist on special provisions from the government, do not be surprised when your customers clamor for the same.

Matthew says:

Who's stopping you from coming up with a way to unlock it?
Sure AT&T/Apple isn't giving you the unlocking code, but you wouldn't expect GM to tell you how to switch a car over to Cheveron when they have contract with Shell either.
Correct me if I'm wrong as I truly don't know, but has Apple filed a lawsuit against anyone who unlocked their iPhone?
I understand if you unlock it than future updates give you issues. But you radically modify a car, you have warranty issues too.

AgBand says:

@ iRoc (#82): Steve is almost dead, so that part doesn't matter

iRoc says:

@Matthew
correct once you buy something it is yours to do as you wish. You break it that's your own fault. I somehow doubt though that is where the gov would be going with this. Namely because Apple has shown that they have government back up in many cases against small startups that they see as threats. So I do not see Apple being outted any time soon. Apple does have defence and other gov agency contracts that anytime a story on here or engadget telling about said contracts mysteriously disapear shortly after going live. Let's face it the real story just isn't being told when it comes to Apple. Truth is in short supply everywhere it seems. 

iRoc says:

@AgBand
Naw the gov will find a way to keep him around just like they have Steven Hawkins. It's unheard of for someone to live with ALS that long. He's a one in a googleplex

AgBand says:

@ iRoc : Very good point :)

Capitalism&You says:

Yes, look here US Government! Quit trying to protect the interests of US Consumers! It sickens me that Congress is sitting there trying to increase COMPETITION!?! Please; the US Economy does not even include Apple & AT&T! What do they hope to accomplish in their sick obsession with consumer spending - consumers shouldn't be allowed to pay competitive prices CONGRESS which gives them the ability to hold on to more of their income!! Stay out of our markets! Capitalism eventually leads to a handful of companies controlling the means of production, raising prices so they have an INCENTIVE to buy yachts and mansions that spur innovation!!! That's what America WANTS you incompetent congressman. If a contract says that a company is entitled to 25% of your money, I'll bet those IDIOTS in Congress would try and meddle! Contracts are ALWAYS legal - that's OBVIOUS. Quit trying to stop private companies from determining the rules of the game... think of a world without exclusive contracts between companies granting them the ability to engage in Monopoly pricing...it's Socialism! Obviously everything the government does is socialist and we need another McCarthy-like inquisition of these fools in Congress!

Daniel says:

EvilHomer:
You are actually quite wrong. If you cancel early with AT&T, they withhold the right to get your phone back.
From http://www.wireless.att.com/cell-phone-service/legal/return-policy.jsp :
You may have to return any handsets and accessories purchased with the service before your account will be cancelled. If you are allowed to cancel service within the 30 day return period, but do not return the equipment within the return period, AT&T may charge you an amount equal to or up to the full retail price of the equipment.

Daniel says:

EvilHomer:
And about AT&T being a monopoly, perhaps you should read these too:
http://www.investopedia.com/terms/o/oligopoly.asp
http://www.oligopolywatch.com/2006/03/06.html
Some quick thought into what makes an oligopoly bad for consumers, for competition, and ultimately the market and the country, reveals that monopolies and oligopolies end up supplying less for more.
The market is about enriching the economy, investors, society, and new & old entrepreneurs, not a single company's balance sheet and income statement.
I respect your staunch defense of little public intervention, but to think that it's unnecessary at all costs is shallow at best.

Daniel says:

@einstein812
you may be the smartest of us all :)
I used to get confused at people that would tell me 'if you dont vote, dont complain' ... when it should be the opposite.

therealmusashi says:

Oy. It's "role" not "roll," and no, the government should have neither in this case.

Truth says:

Most of you don't know what capitalism is or how a free market society works. All you see is in black or white.
Read a book and stop listening to Limbaugh and Glenn Beck. Hell dont even listen to the other side. Read and learn for yourself.

Daniel says:

Glenn Beck's not even the worse. Limbaugh, Savage, Hannity, Ingraham, just a horde of demagogues infecting minds with putrid thoughts. They speak trash in the middle of truth, to a point where not even an educated man can draw the line between fiction and reality.
I'm more liberal, but I think conservatism is a beautiful thing, and if it existed in its true form I would probably be more on that side. But I can't handle the warmongering government-hating neocon horde.

Lolipopjones says:

@Daniel: You do understand that all carriers force you to give back the device if you cancel during the 30day mark right? Verizon Wireless WILL NOT LET YOU CANCEL if you do not bring your equipment back.
If you read the contract you sign whether it be Sprint's 30 day, VzW's 30 day Worry Free Policy, or AT&T's 30 day Terms of Service clause. No fucking carrier will allow you to buy the equipment at the 2yr contract price, cancel, and keep the device all in the first 30 days....
Are you a fucking retard?

Ray says:

The only gripe I have is not being able to walk into an Apple Store and just buy an iPhone at full price. Last Christmas I wanted to buy some friends iPhones and was upset that I couldn't. Two of them had AT&T and two had T-Mobile and I didn't want them to feel pressured to change data plans or carriers. I ended up buying them on eBay and got one that was DOA and ended up buying a fifth one. Damn Apple (or AT&T). I just don't understand how this is capitalism.

Travis says:

For all of those people who are bitching, if you voted for Obama, this is what you voted for. That's exactly what liberals do. They try to disperse everything evenly; such as health care and money (or in this case, equal disbursement of technology).
As bitter as I am about at&t having the rights to sell the iPhone exclusively, it is their business, not the government. What the hell happened to our country and everyone having the right to charge whatever they want or exclusive things like the iPhone?

mcx says:

The fact is that Apple was so far ahead even AT&T wasn't (still isn't) ready for that. Every phone since the iPhone has just been trying to catch up. Apple has been dragging the industry into the future. Don't blame Apple for there forward thinking.

Daniel says:

@lollipopjones
if you really thought about what I wrote in my post, you'd realize that not only did I understand this, but that's exactly what I was saying.
if you're having a problem doing so, perhaps you could scroll up a bit and see the post I was replying to, making this even more obvious.
who's the idiot now?

Daniel says:

@lollipopjones
or perhaps you could also try reading the article I linked to, which happens to be AT&T's return policy, which states very clearly what you said (as far as AT&T is concerned). since we can both fairly assume that I can read, and so can you, this leads me to believe that you just like picking a comment out of the crowd and half-ass replying to it, instead of taking in the context.

Daniel says:

@iroc:
you are a tiny little sample of what's wrong with the political mindset in this country. the political discourse that exists today, and that lingers in your post, is of low quality. it's not about black and white, liberal vs. conservative, socialism vs. free market. to see the world in those two shades is to be too small-minded to understand the infinite shades of gray in between.
should we expect people to understand all of them? of course not, we're just human. but to deny their existence is unnecessary ignorance.
if you choose to listen to AM radio every day on your way to and from work, and get all worked up and pissed off, it's your right to do so, but it's your fault that you choose to listen to only one side of the debate. I guess some people just like to live miserable lives of concern and worry over straw men.

fassy says:

@Matthew
Nobody has yet filed suit against people jailbreaking or unlocking, but Apple last year filed comments with the US Copyright Office indicating their position that jailbreaking and unlocking an iPhone is a violation of the DMCA. In other words, Apple views it as a crime, and wants to reserve the right to seek government protection. The government itself will only weigh in when Apple actually brings a case.
I absolutely agree with you that neither Apple nor AT&T should have to help me, nor should they have any obligation to support me or honor my warranty if I monkey with my iPhone. Caveat Jailbreakor, so to speak.
But, under a free market, neither should they be able to tell me what I can and cannot do with my property under the threat of criminal prosecution and penalties.

Daniel says:

@fassy
classic. companies seek government protection for intellectual property, but want the government out of their way in their business decisions.
in the "FREE MARKET" the hard right keeps screaming about, stealing other people's technology amounts to a justified maneuver.
the way I see it, the government stepping in to remove exclusivity rights is promoting the free market.

Lolipopjones says:

@Daniel: Actually you are still the moron because you first accuse ATT of forcing people to return their equipement but you leave out that its only apart of the 30day policy. This shows you are either infact a moron or just a devious liar as you left out that part. Then when i point this act you attack me with more trash proving that you're an idiot....
As for Oligopoly you obviously can't read.... The iPhone is not a market it is a Smartphone Device. AT&T does not control the Smartphone Market as they face fierce competition from VzW and Sprint.
If you are going to argue then understand your arguement fool.

Daniel says:

@lolipopjones
read the policy again. their policy forces people to return before the 30 days, and also withholds the right to take the device back after the 30 days, at their discretion.
and if you knew anything about oligopolies, I'll facilitate you with the definition, because you don't seem to understand the distinction between different kinds of imperfect competition:
oligopoly - market situation in which a small number of selling firms control the market supply of a particular good or service and are therefore able to control the market price. An oligopoly can be perfect-where all firms produce an identical good or service (cement)-or imperfect-where each firm's product has a different identity but is essentially similar to the others (cigarettes). Because each firm in an oligopoly knows its share of the total market for the product or service it produces, and because any change in price or change in market share by one firm is reflected in the sales of the others, there tends to be a high degree of interdependence among firms; each firm must make its price and output decisions with regard to the responses of the other firms in the oligopoly, so that oligopoly prices, once established, are rigid. This encourages nonprice competition, through advertising, packaging, and service-a generally nonproductive form of resource allocation. Two examples of oligopoly in the United States are airlines serving the same routes and tobacco companies.
therefore, an oligopoly is not one company controlling the market, it is about a few companies controlling the market, but they're so few that they essentially act as a monopoly.
obviously nobody expects you to understand this, because you're a grown man that sucks on 'lolipops' [sic].

Lolipopjones says:

@Daniel: You just shot yourself in the foot again. Every Carrier except sprint uses the same Data plan. Verizon, Alltel, ATT, Tmobile, and US Cellular all have Data plans in addition to there calling plans. Sprint and very small regional carriers are the only ones that either don't have data plans or add them to their plans.
The flaw to your arguement is equipement has nothing to do with the issue. VzW for example has the shittiest Data devices on the market yet its shares in the Data market has exploded. One Sprint and Tmobile have the cheapest plans while VzW is far more expensive.... In an oligopoly the big companies have the same price plans.... In the Wireless industry the only thing the carriers have in common is Data but even the features are not the same. Tmobile includes Txting, Att's iPhone plan includes Visual Voicemail, Sprint's is added into the plan, and Vzw is the most barebones.
How is there an oligopoly when the product bears different features?AT&T's iphone plan is 89.99 with unlimited text. VzW is 450minutes Smartphone plan for a storm with the same features is 92.89. A text book Oligopoly finds all participants to be of equal price.. however lets throw in extended warranty via Verizon equates to an extra 1.99. the price now goes up to 94.88. Apple care is not an AT&T product but a direct product from apple. VzW warranty and insurance can only be added during the initial 15 days of purchase the iPhone is up to 1 year to add an extended war via Apple.
Then lets look again at how the oligopoly fails. Cigs are a different branding different materials but pricing is the same and the product is the same. VzW's services however are not the same as AT&T's. VzW offers the vzAppzone for all of its Data Devices and offers Vcast rhapsody AT&T however does not have anything to offer anything like its competitor. The problem with your assertion is none of the carriers offer the same products for their devices. AT&T offers nothing except its GPS for the iPhone. VzW offers GPS, Rhapsody, visual voice mail(extra feature unlike the Iphone data plan), and vzAppzone.
By Definition the Wireless carriers fail as they do not offer the same product. Gas Companies and certain Tabacco Companies offer the same product at the same price.
Also reread their ToS they say nowhere after the 30days that they reserve the right to take your equipement.
Nice dig at my name. Too bad your still too stupid to know how to use oligopoly in a correct situation. Your parents must be proud to have such an ignorant child. Go die in a fire.

SpiceRak2 says:

@Lolipopjones Perhaps you may consider letting this argument die as you are thoroughly embarrassing yourself.
@Daniel. You have made some excellent, insightful statements. Don't succumb to silly debates...as this may diminish your credibility. You get it. Don't worry that others don't.
@Icebike. I agree, Friend. It's our property.

Daniel says:

@spice
just something to do while 4th of July rolls around You're absolutely right, but I feel strangely attracted to arguing against anybody that's willing. Probably because my wife won't indulge me with debate. :-)
@lolipop
oligopolies don't require that prices be the same. It requires that a few firms control an entire market - like telecoms, beer companies, cable service, utilities - and therefore set prices, not from a demand standpoint, but from an input cost and average revenue standpoint.
The fact that prices are dissimilar is a shallow estimation of their business models. The real cost of handsets, their relative qualities, brand power, mixed in with subsidies, contract lengths, and hidden fees makes the telcos essentially identical in price (like cigarrettes, which one quick trip to a as station will reveal that their prices are indeed quite different).
You fail to see the situation as it really is, and instead find shelter in "textbook" definitions (which you get wrong anyway). The fact is and remains, telcos are too huge to compete against, have sticky demand curves and therefore prices, and gobble up the little competition that comes by. This is quite obvious when you consider the cost of txt messages, which has gone UP instead of down! Competition has the opposite effect. Also, only massive market power would allow a company to sell a phone that's worth $20 in parts for $700 (RAZR, most dumbphones, etc).
Telcos may not actually make the devices themselves, but with exclusivity agreements they end up having the same net effect. I work at a beer company, and we don't make the glass or bottles, but as intermediate input goods it's all the same to the consumer. Go on LG.com and try to buy a cell phone.

Chobbs1 says:

First off this is not targeted at AT&T nor is it targeting the iPhone. It is questioning the practice of exclusivity contracts between the two.
Most of the posters on this topic have seemed to miss the point of the original issue. The minute the words "govt. Reg" are used, it seems people already have an opinion. Hence the arguement that has nothing to do with the original inquiry.
Might I suggest the reading of posted links in the article in order to focus your argument?
Personally, I hope the iPhone is not forced to be sold on other carriers. AT&T has been smart enough to keep their mitts off of the iPhone. I have enjoyed AT&T's service very much. I also believe that if you do not like the carrier... Move to another, the govt needs to focus on other more serious problems.
I also love the level of control Apple keeps of their products! Without it the phone would be a jumbled mess! I know this is an unpopular view but it is my view none-the-less.

Lolipopjones says:

@Spinerak2:The only embrarrassment are the ignorant that too easily fall for this type of BS. Let me guess a you are another idiot that thinks that you should be able to buy an iPhone at 200 dollars without contract.
@Daniel: Actually again you do not know what you are talking about. In Egypt and many other countries Carriers are not allowed to offer exclusive devices nor do they Subsidize. The cost for an iPhone is $699 there. The MSRP is not affected by carrier infact the Verizon buys the Storm from RIM for 400 and sells the device at 200 with contract. The Device MSRP is not affected by the carriers what so ever. in Europe people prefer paying full retail for phones instead of going with subsidy and getting a contract.
Only in the US do we have people that complain about the price of a Phone yet people like you do not want to buy it full retail. WHen the Razr was first introduced it cost 200 dollars in parts. The iPhone is 273 in part and no company sells a device under at least a 50% markup. Your complaint of Cellphone costs shows your ignorance in the matter. Don't buy a laptop as they can go anywhere from 200-300 for parts at manufacturer end.
I work with the cellphone industry (VzW). VzW loses anywhere from 200 to 250 dollars per phone they sell because they pay for the phone wholesale value which for the storm its 400 dollars at wholesale. So please tell me how you as a consumer is getting shafted on equipment cost when you never have to pay full retail on a phone. Oh i guess its a shame you may have to buy a phone full retail....
When carriers lose exclusivity it has not effected cost on equipment infact the consumer actually LOSES as the carriers stop offering Subsidy. Egypt is a prime example as its full retail value on all devices as is a few european countries aswell. A
The equipement costs has nothing to do with a carrier so you just proved how stupid you are. BTW in Europe many people prefer buying devices at full price from the manufacturer over buying a 2 year contract and a phone from the carrier. This flies in the face of your idea of exclusivity where the cost of equipment will go down if the carriers do not have exclusive rights to the devices. The cost of equipment and rate plans are the same the subsidy is lower (Storm is free with contract via Vodafone) but the price plans do not help your idiot theory.
LG, and Sony Ericson have stores in europe where they offer their devices full price or offer the same phone with subsidy for a carrier contract. More often people opt to buy the device full retail. Manufacturer sets the MSRP not the carrier so your BS theory on how carriers are the caused for jacked up pricing is bullshit. Prevailing logic would assert that equipment costs should be lower which the carriers offer larger subsidy on handsets due to larger rejections contracts. The pricing on equipment is the same or higher.... The lack of Exclusivity has not effected pricing at all infact it drove prices up for consumers in some areas due to carriers not subsidizing the phones....
Its funny though that you state the carriers are responsible for handset costs as i am still trying to figure out why would a handset be as cheap as a bluetooth headset.... It would make no sense to say an Lg 8360 for Verizon should cost 50 dollars full retail when the Jawbone Prime is 130....
Then again only in America do we have people so cheap that they think 200 dollars is too expensive for a device. The fact is this the loss of exclusivity will not drop handset/data device pricing. Infact it would have the alternate effect. Carriers would drop their business model of market share and become a profit share companies. Currently carriers make no money for the first 4-6 months to a year depending on the phone and the plan. Example it takes AT&T five months to actually make back the cost for the phones they sold me. Thats five months in the red for one customer. They lost 300 dollars on the phone they sold me and you times that by 1 millions customers that say have the same plan and phone i have......they lost 300 million dollars that will not be will take them 5 months to recoup.
On the contrary if the carriers stopped offering phones and forced you to go through manufacturer like in some countries then you are looking at the carriers making profit immediately. Its more profitable for carriers not to offer phones and just offer service. However in the US they offer phones because how many of of you want to pay full price for a phone? Hell to many of you the price of a subsidy is enough to gripe about. The fact is they are right with what the American Market demands there would be no innovation in our market because the people DO NOT want to pay the price for the features they get.
Why would Apple offer the iPhone for less? The Macbook Pro costs 400 dollars to make if that and they charge you a grand or more for it despite products of equal value being half the price full retail....

Lolipopjones says:

forgive grammar errors i am posting this on the go.

SpiceRak2 says:

@ Lolipopjones...I rest my case.
@ Daniel...it's too easy, isn't it? But...if you can, try the high road. :-)

Lolipopjones says:

@Spicerak2: Your a moron and you made no point. Good job at failing.

Daniel says:

Spice, it's getting hard to argue when lolipop is so scatterbrained. I'm going to distill his 2000 paragraph rant into a few sentences:
In Europe, things are different. I work for verizon (VzW). Americans are ingrates. You are a moron. Cell phones are expensive.
Never even touching on the root of the argument: telecom company competition and implicit collusion.
Good luck with your Verizon Wireless (VzW) job, answering phones.

Chobbs1 says:

This thread is paiful to read. Daniel and lollipop need to "get a room". You guys can hash it out behind closed doors. Have either of you ever heard of "breif and to the point"? Shees!

Daniel says:

Some matters cannot be simplified into a few
words, I'm sorry if you felt forced to read through our posts.
Besides, it's lolipop's posts that are hard to get through! It's like Jambalaya!!

Chobbs1 says:

True but it takes two. You kept feeding the beast

Daniel says:

Can't argue with you on that.

tom says:

If you don't get "done" by the govt, you get done by the corporate america (att and Iphone) What interest me, is that the phone is made in china! It just seems that Apple would have taken a different approach, and let other networks in "on the deal" But I rckon that is a problem in evry other country that has Iphones, such as Orange in Swit etc. etc.

Dixie Crafts says:

Whenever somebody or possibly a business decides that success has been attained, progress stops.
The individual isn't a moron; she is your spouse.
What's the subject of life - to obtain rich? All of the fellows out there getting rich could be dancing round the real subject of life.

gamefly special code says:

Agreed! I've never understood why the games don't get here nearly as swift as Netflix. Same size, same concept.. maybe they're just greedy with the money for shipping? In which case I would readily jump ship with you, once a GOOD version of GameFly gets started. Or you were right and they employ monkeys. Big, slow, lazy monkeys. Either way it sucks, but the video store games are worse and the constant buying-returning with places like GameSwap ends up costing you time and the selection is wont to change.

Claris Aagaard says:

Not sure if my comments are welcome...i am 60s man! You are a fantastic writers and would have commented on the subject but wait what is tweeter?

Jovanne says:

Att and Apple are Not Great by checking Credit Why, because I can not get a iPhone 4s due to old credit co-sign HATE IT!!!! NOW THAT WE CAME TO A NEW TOWN SHE CHANGE HOW DO THEY KNOW THAT SHE THE SAME BY A PAPER!!!!! VERY SAD:(

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