View Full Version : Rural carriers bemoan exclusivity deals on handsets

05-22-2008, 02:59 PM
By Jeffrey Silva (jsilva@crain.com)
Story posted: May 20, 2008 - 2:26 pm EDT

Rural mobile-phone operators asked the Federal Communications Commission to investigate exclusive deals between major carriers and handset vendors, taking aim at an entrenched business practice that they assert is anticompetitive and denies rural residents in many states access to popular wireless devices.

“For many consumers, the end result of these exclusive arrangements is being channeled to purchase wireless service from a carrier that has monopolistic control over the desired handset and having to pay a premium price for the handset because the market is void of any competition for the particular handset,” stated the Rural Cellular Association. “For other consumers — particularly rural ones — these exclusivity arrangements prevent them from purchasing many of today’s most popular handsets because they reside in areas not served by the one carrier offering the desired handset.”

The filing focuses on the relationships among leading handset manufacturers and the Big 5 carriers: AT&T Mobility, Verizon Wireless, Sprint Nextel Corp., T-Mobile USA Inc. and Alltel Communications L.L.C.

RCA noted that Vermont citizens still cannot use Apple Inc.’s iPhone without violating terms of service contracts with AT&T Mobility, the largest cellular carrier and the only one aligned with the handset. The trade group said the iPhone is also out of reach to rural residents of Alaska, Arizona, Colorado, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Utah and Wyoming.

RCA cited other exclusive marketing arrangements involving the carriers and handset manufacturers.

The rural cellular group said the exclusive devices are “unique products for which there are no readily available substitutes” [and] “cannot be used by millions of rural Americans, essentially creating another ‘digital divide’ between urban and rural America.”

The association representing the nation’s top mobile-phone carriers countered that U.S. consumers have a morass of choices when it comes to handsets.

“There are more than 620 unique wireless devices for sale to consumers in the United States. These devices are designed and manufactured by no fewer than 35 companies,” said Joe Farren, a spokesman for CTIA. “Furthermore, American consumers can purchase handsets from a number of sources, including large nationwide electronics stores, independent retail stores, manufacturer stores and Web sites, online auction sites, as well as carrier retail stores and Web sites. This is a vibrantly competitive and healthy market which provides consumers with an abundance of handset choices.”

Here is a full list of exclusive devices and the carriers offering them, as outlined by RCA:

Exclusive Carrier Manufacturer Handset Model AT&T LG CE110 LG CU515 LG VU™ LG Shine™ LG CG180-GoPhone® Samsung a437 Samsung a727 Samsung a737 Samsung Access™ Samsung BlackJack™ II Samsung SLM Samsung a117 - GoPhone® Samsung A127 - GoPhone® Alltel Wireless LG AX145 LG AX275 LG AX390 LG AX565 Samsung Alltel Snap™ Samsung Muse™ Sprint Nextel LG LX160 LG Muziq™ Samsung a580 Samsung m300 Samsung m520 Samsung Ace™ Samsung Upstage™ T-Mobile Samsung t219 Samsung t409 Samsung t429 Samsung t439 Samsung t639 Samsung t819 Samsung Beat™ Samsung Blast™ Samsung Katalyst™ Samsung Stripe™ Verizon Wireless LG VX5400 LG VX8350 LG VX9400 LG Chocolate™ LG Venus™ LG enV™ LG enV2 LG Voyager™ Samsung Alias™ Samsung FlipShot™ Samsung Gleam Samsung Glyde™ Samsung Juke Samsung SCH-u340 Samsung SCH-u410 Samsung SCH-u540 Samsung SCH-u550 Samsung SCH-u620

05-22-2008, 11:25 PM
It's all about controlling the market, glad there is someone advocating change.