[jcoley2]

I just saw this on the FT website. I guess the DoJ want to review these contracts to see if they are anti-competitive.

Personally I think there is plenty of competition, and with the BB Storm and Palm Pre, you can even get look-alike iPhones from other competitors. But it still does not stop the Government from investigating.

[jdcfsu]

It's worth pointing out that every cell provider has exclusive contracts with different phones. The difference is that the iPhone is highly successful and makes it looks like it's the only one tied to a certain network. Someone's just looking for a chance to complain.

[jcoley2]

Originally Posted by jdcfsu Someone's just looking for a chance to complain.

Probably a Sprint customer.

[Wyatt]

Actually, regional carriers have been yelling about this for years, but the letter from the Senate committee (I don't recall which one) directly singled out the iPhone. Something tells me there's a Senator that wants an iPhone and doesn't know how to unlock it.

The small carriers probably do have a beef, though. They get stuck with older handsets with fewer features, which makes it next to impossible for them to compete.

I wouldn't be surprised to see some changes in the way exclusivity deals are regulated, but I don't see DOJ coming down too hard on the carriers.

[kieran]

Exclusive contracts have been around for years. As jdcfsu pointed out, someone is just complaining about it with the iPhone because they can't get it.

And jcoley2, it's "lose" not "loose"

[jcoley2]

Originally Posted by kieran And jcoley2, it's "lose" not "loose"

I was just testing you. . . .

[nikstar101]

One thing that i believe wrong about mobile phones and the carriers contracts is that they lock you in an 18 or 24 month contract but the phone only has a 12 month warranty. Therefore you could be left a year down the line without a phone but still having to pay for services you cannot use. The warranty and contract length should be equal.

As for exclusive contracts i think that they should only remain exclusive for 6 months then be open to all carriers. Therefore epople don't remain in the dark and it still gives a little to the carriers

[hmurchison]

I think the Government should work on fixing "real" problems and stop worrying about trivial stuff. It's not like cell network build out is majority funded by Uncle Sam. I think the citizenry has more important issues than what carrier the Pre or iPhone are attached to.

[Justin]

Even if they weren't under contract I don't think they could force Apple to make an iPhone that works on other networks. Currently it will only work on ATT and Tmobile. On Tmobile it won't get 3G so somewhat pointless.

[zippy]

I say bring the smackdown.

Cell phone exclusivity contracts are anti-consumer. Why we have put up with it for this long is beyond me.

[jdcfsu]

Originally Posted by Justin Even if they weren't under contract I don't think they could force Apple to make an iPhone that works on other networks. Currently it will only work on ATT and Tmobile. On Tmobile it won't get 3G so somewhat pointless.

Exactly. I don't see the government telling Apple to make a CDMA phone. This won't go anywhere. And, to top it off, the different cell carriers wouldn't make any money if they didn't have exclusive deals. That lobby, I assume there is one, won't let it happen.

[Robo]

Originally Posted by zippy Cell phone exclusivity contracts are anti-consumer. Why we have put up with it for this long is beyond me.

How so? Are you somehow owed an iPhone on every carrier?

That's like saying console exclusivity for games is anti-consumer. It's a bummer, but it's not like I have a right to Fable on my PlayStation or whatever.

I agree that I wish the government would work on real problems.

[chucker]

Originally Posted by zippy Cell phone exclusivity contracts are anti-consumer.

I've never understood the argument that the iPhone would be more consumer valuable without exclusivity. Yes, more choice is always good, in principle, for the consumer. But practically speaking, let's say the exclusivity is gone. What does this give you, in the US? T-Mobile. Not exactly a very big network, there, and people already complain that AT&T coverage is bad enough.

So, really, I don't get it. Without unlimited data everywhere, the iPhone is essentially a glorified iPod touch with a camera, compass and GPS. It's not exactly worth thrice as much. It's the cellular (and therefore almost ubiquitous) data that adds the value, and what use is that without a big carrier?

[Luca]

My problem with the big carriers is the cost of data plans. I think it'd be fun to have an iPhone and have go-anywhere web access, but it's way too expensive for what is really just a novelty. This is not specific to the iPhone - all mobile web devices are pricey. It's especially bad for me because at the moment I'm on a family plan that only costs me $10 a month, so I'd be multiplying my bill by 8x rather than "only" doubling it.

[zippy]

Originally Posted by Roboman How so? Are you somehow owed an iPhone on every carrier? That's like saying console exclusivity for games is anti-consumer. It's a bummer, but it's not like I have a right to Fable on my PlayStation or whatever. I agree that I wish the government would work on real problems.

Originally Posted by chucker I've never understood the argument that the iPhone would be more consumer valuable without exclusivity. Yes, more choice is always good, in principle, for the consumer. But practically speaking, let's say the exclusivity is gone. What does this give you, in the US? T-Mobile. Not exactly a very big network, there, and people already complain that AT&T coverage is bad enough. So, really, I don't get it. Without unlimited data everywhere, the iPhone is essentially a glorified iPod touch with a camera, compass and GPS. It's not exactly worth thrice as much. It's the cellular (and therefore almost ubiquitous) data that adds the value, and what use is that without a big carrier?

You are both assuming that I am only speaking of the iPhone. But I'm not. As long as the device is physically capable of working on another network, there should be nothing in the way of a consumer purchasing it and using it on that network. Whether that's an iPhone, a Pre, or a ROKR. With cell phones in the US, there will be a certain amount of lock simply because of the GSM-CDMA differences. But that should be it.

As for game consoles - that's a different beast. Games have to be written to use a certain platform - just like Windows/OS X apps. In other words, it would create extra work for a gaming developer to write a game to work on multiple platforms. Same with CDMA vs GSM. If a manufacturer only wants to make GSM phones - so be it. But those phones should be available on any GSM network that a user would want to use it on.

A better analogy would be televisions that only work with certain Satellite or Cable companies - even though at their root, they are simply televisions. Would you be OK if Sony only made TVs that would work on Comcast? And what if Comcast wasn't available in your area? Does it make sense that you would not be able to purchase a Sony TV even though there was nothing technologically that would prevent it from using your local cable provider - or even free, over the air TV?


And as someone mentioned above, things may not seem bad to those of you who live in metropolis-land. But when you get into rural America, these kinds of limitations become amplified.

Chucker - there are other regional GSM based carriers out there who have data plans besides ATT and T-Mobile. The exclusive contracts make it harder for these types of companies to compete. And frankly - it's these types of businesses that we need more of (localized businesses with better customer support so people can give the big boys the boot).

[jdcfsu]

Originally Posted by zippy You are both assuming that I am only speaking of the iPhone. But I'm not. As long as the device is physically capable of working on another network, there should be nothing in the way of a consumer purchasing it and using it on that network. Whether that's an iPhone, a Pre, or a ROKR. With cell phones in the US, there will be a certain amount of lock simply because of the GSM-CDMA differences. But that should be it.

Then your argument shouldn't be aimed at the device manufacturers, but the cariers who require specific software. It's that reason, among others AFAIK, that Apple went with AT&T. They allowed Apple to create the phone without any added software or changes.

[Luca]

Originally Posted by jdcfsu Then your argument shouldn't be aimed at the device manufacturers, but the cariers who require specific software. It's that reason, among others AFAIK, that Apple went with AT&T. They allowed Apple to create the phone without any added software or changes.

Good point. As I recall, Apple spoke to Verizon about the iPhone and Verizon wanted to load it down with their own crappy software. I'm glad Apple said no. Verizon software sucks.

[zippy]

Originally Posted by jdcfsu Then your argument shouldn't be aimed at the device manufacturers, but the cariers who require specific software. It's that reason, among others AFAIK, that Apple went with AT&T. They allowed Apple to create the phone without any added software or changes.

There both targets, really. But it was the phone companies who started the whole problem, so that is where most of my vexation is aimed.

[Robo]

Originally Posted by zippy As for game consoles - that's a different beast. Games have to be written to use a certain platform - just like Windows/OS X apps. In other words, it would create extra work for a gaming developer to write a game to work on multiple platforms.

It would take extra work for a phone developer to make a phone work on multiple carriers, since the carriers insist on having special firmware/software/whatever. (Even if they didn't, they still all use different bands for 3G, &c.)

So it might not be such a "different beast" after all. But that's kind of beside the point.

If AT&T is willing to pay Apple megabucks for iPhone exclusivity, why shouldn't Apple be able to take it? It's not like Apple doesn't realize that that means they'll sell less iPhones. They made a calculated business decision to limit sales in exchange for a larger payoff from AT&T.

I still don't see the problem, unless you honestly think you're entitled to have any given phone on any given carrier.

Ten bucks says the congressmen (-women?) involved don't even know the difference between GSM and CDMA.

[jdcfsu]

Originally Posted by Roboman Ten bucks says the congressmen (-women?) involved don't even know the difference between GSM and CDMA.

Bingo. I don't know who started the cause, but John Kerry is behind it:

Originally Posted by John Kerry The DoJ’s interest was welcomed by John Kerry, the Democratic senator for Massachusetts and a member of the Senate’s committee on commerce, science and transportation, which recently held hearings on the issue. “We need to know more about how these contracts affect competition in the marketplace and its impact on consumers,” he said.

Whether Kerry started it or not, whoever did is most likely just a junior politician trying to make a name for themselves.

[Kickaha]

Originally Posted by Roboman If AT&T is willing to pay Apple megabucks for iPhone exclusivity, why shouldn't Apple be able to take it? It's not like Apple doesn't realize that that means they'll sell less iPhones. They made a calculated business decision to limit sales in exchange for a larger payoff from AT&T.

And Visual Voicemail. Apparently Verizon and Sprint both balked at doing anything special for Apple to enhance the user's experience... so naturally Apple told them to take a hike.

[zippy]

Yes there are different GSM bands, but I can almost guarantee (without looking it up) that the iPhone communicates on all of the available GSM bands. I don't see it being as usuable around the globe if that wasn't the case.

Beyond that, there is absolutely nothing else that Apple would need to make this work on other GSM carriers. In fact, they have to invest extra time and money to create code to specifically block you from using it elsewhere.

There are other manufacturers (Sony Ericsson for instance) who make unlocked GSM phones that will work on any GSM providers network (assuming compatible GSM bands). It's not a difficult thing when it comes to GSM, and I can't imagine that it's really that hard on CDMA either. The different "firmware/software/whatever" that you mention, is part of the BS that is intentionally manufactured to keep this system in place. It doesn't need to be there. It's just the Cell industry's way of working the system.

People have been complaining about this for years. The iPhone just happens to be that device that is finally motivating people to action.

And if I recall correctly - the original complaint, or at least some of the original complaints, were by small regional carriers who are not being allowed to offer the iPhone on their networks - even though there is nothing technologically that would prevent the phone from working on their network. It puts them at a considerable disadvantage. How is that fair? What if every phone manufacturer set up exclusive contracts with existing carriers for all of their handsets? How would anyone else even enter the market?

Here's another issue: They are making it harder for people to walk-away from them if when you do, your phone becomes useless to you. It's easier to get away with 'mistreating' customers when you make it financially cumbersome (need to buy a new phone/s)for them to choose something else. They've got it set up to work very well in their favor.

[jdcfsu]

Originally Posted by zippy And if I recall correctly - the original complaint, or at least some of the original complaints, were by small regional carriers who are not being allowed to offer the iPhone on their networks - even though there is nothing technologically that would prevent the phone from working on their network. It puts them at a considerable disadvantage. How is that fair? What if every phone manufacturer set up exclusive contracts with existing carriers for all of their handsets? How would anyone else even enter the market?

I see the point you're making, but it just doesn't seem practical (or possible) for little regional carriers to offer big ticket phones, for a number of reasons. I'm sure there are tons of licensing fees involved and, if you're with a regional carrier who prides themselves on lower costs, would you be willing to pass on such fees to your consumers? Given that, what's the benefit to using the regional guys over the big ones? If you want to travel with your new phone, look out for roaming charges, not to mention the data charges that could arise.

[Kickaha]

Originally Posted by jdcfsu I'm sure there are tons of licensing fees involved

Er for what?

Customer buys the phone. Carrier optionally subsidizes. What else are you thinking of?

[Robo]

Originally Posted by zippy Yes there are different GSM bands, but I can almost guarantee (without looking it up) that the iPhone communicates on all of the available GSM bands. I don't see it being as usuable around the globe if that wasn't the case.

I said different 3G bands. T-Mobile's AWS 1700MHz 3G band is different than AT&T's (and the iPhone 3G's).

Here's another issue: They are making it harder for people to walk-away from them if when you do, your phone becomes useless to you. It's easier to get away with 'mistreating' customers when you make it financially cumbersome (need to buy a new phone/s)for them to choose something else. They've got it set up to work very well in their favor.

First of all, having a deal to sell a phone exclusively is a completely different deal than unlocking (or not unlocking) a customer's phone at end of contract or whatever, so don't equate the two. I agree that phones should probably be unlocked at end of contract, whenever possible.

Second, people are signing a contract and buying phones locked to a carrier (in exchange for a large discount). Yes, that does make it harder to "walk away" if you don't like their service or change your mind. That's kind of the point of a contract. Maybe people should, idunno, think about that before they sign the dotted line?

You can't use legislation to make people responsible consumers.

I mean, it's not like you can't buy unlocked phones now. You can buy a Nokia 5800 and walk into any AT&T or T-Mobile store and get a SIM and start service, contract-free. And then you can jump ship to the other GSM carrier the second they mess up your bill or whatever. But people don't want to do that, because the Nokia 5800 is $299 unlocked, and that's just a ridiculous price for a handheld computer. At the AT&T store phones are *free!*

The only thing this proposal could possibly accomplish would be to force Apple to sell $800-1,000 "unlocked" versions of the iPhone (that still wouldn't support Verizon/Sprint, or T-Mobile's 3G bands) alongside the locked versions, just like they do in France IIRC. Nobody would buy them anyway, and it'd waste tons of congressional time, but it'd be a victory for the consumers!

Oh, and the title of this thread is silly. You can't have a monopoly of one product. (This just in: Apple has a monopoly on iPhones - worldwide!)

[jdcfsu]

Originally Posted by Kickaha Customer buys the phone. Carrier optionally subsidizes. What else are you thinking of?

I would assume, and I could be wrong, that the carrier is also licensing the name, graphics, etc from the manufacturer in terms of advertising, promotion, etc. Surely there is more to it than just Apple saying to AT&T you get to offer this phone and AT&T saying ok.

Originally Posted by Roboman The only thing this proposal could possibly accomplish would be to force Apple to sell $800-1,000 "unlocked" versions of the iPhone (that still wouldn't support Verizon/Sprint, or T-Mobile's 3G bands) alongside the locked versions, just like they do in France IIRC. Nobody would buy them anyway, and it'd waste tons of congressional time, but it'd be a victory for the consumers!

Good point. Is there any sales data out there to show how the unlocked phones sale in relation to the locked ones in France?

[nikstar101]

From the sounds of things, this is less of an issue in the States, but in the UK (and for most of Europe) there are at least 5 major carriers that support 3G services. Therefore there is a question that has to be asked, is the consumer getting the best deal by locking a phone to the network? And are all carriers getting fair opportunity to compete for the phone? I think that is what the Government is trying to determine.

Technologically there is no reason why the iPhone (or any GSM phone) phone cannot run on any compatible network. As when you go abroad the phone will use any available network, not just the one that is the "exclusive carrier".

[joveblue]

Originally Posted by Roboman How so? Are you somehow owed an iPhone on every carrier?

You're not owed anything, but that doesn't mean that such deals are necessarily in the interests of consumers.

In Australia we have competition regulations which meant that Apple could not negotiate such an exclusivity deal and hence the iPhone is available on 4/5 of the major networks, with the 5th finally getting it next month. Hence, there's price competition between the carriers and consumers are able to go with whichever network suits them best. For instance in rural areas the only real choice is Telstra, but their exorbitant prices mean most of us city-dwellers wouldn't dream of choosing them without a good reason.

Sure, the situation in the US is a little different, with Sprint and Verizon on CDMA networks, but what happens when the iPhone 4G comes around? Aren't they all heading towards the same technologies? (I don't know much about this)

[chucker]

Originally Posted by joveblue what happens when the iPhone 4G comes around? Aren't they all heading towards the same technologies? (I don't know much about this)

Sort of. The CDMA-succeeding UMB was killed, and Verizon moved to the GSM-succeeding LTE instead, so over the early course of the next decade, AT&T, Verizon and T-Mobile are all moving to the same standard. Sprint, however, apparently isn't quite sure yet whether to use WiMAX instead.

[Moogs]

Cell phone contracts and pricing strategies as a whole need to be scrutinized closely. The whole deal where they all force people into multi-year deals and ripping them a new one for text and received calls (or forcing them to get an all-encompassing plan for an extra $30 a month or whatever) is abusive. They basically collude not so much on the price points but on how contracts are structured and how every little item is charged. They nickle and dime people to death. Meantime I think things like iPhone and Crackberry should be made available on two carriers at least. AT&T should not have monopoly service for iPhone.