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story category Consumer Groups, Mozilla Attack Cellphone Exclusivity
Taking on AT&T's exclusive iPhone contract...
(old news - 08:44AM Friday Mar 06 2009)
tags: competition · business · wireless · alternatives
Consumer advocates, smaller pre-paid carriers (like MetroPCS) and even Mozilla have joined forces to protest wireless device exclusivity -- like AT&T's exclusive contract with Apple to offer the iPhone. The FCC asked for comments on the issue last year, and with a new FCC boss, the organizations hope to see a little more traction. The groups are also complaining to the FCC about restrictive software deals -- such as how all applications on the iPhone need to go through the Apple approval process.

RIM has filed a counter-argument to the FCC saying competition isn't harmed -- since 35 carriers offer 620 models of phones to American consumers. Of course non-exclusivity would more seriously impact carriers, and AT&T counters the complaints by claiming exclusive deals not only foster "handset innovation" but also "the pace of wireless broadband investment and applications development." Ending phone exclusivity really is a different issue entirely from open access, though Business Week does seem to conflate the two a bit.

The FCC may be sympathetic to the exclusivity issue, given it locks smaller carriers -- who can't afford Apple or RIM's price tag -- out of an entire aspect of competition.

Related:
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  5. AT&T's 'Blogger Guy' Faces Public Backlash
  6. Verizon's New Wireless Pricing Is An Insult
  7. Analyst: Apple Will Stick With AT&T Exclusivity
  8. Clearwire Launching In Chicago October 6
Forums » Consumer Groups, Mozilla Attack Cellphone Exclusivity
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Matt
Gone playing Dragon Age Origins
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join:2003-07-20
Jamestown, NC
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It's REALLY Exclusive

If AT&T paid for the privilege of exclusivity, I don't see a problem with it. In this case however, even AT&T resellers aren't allowed to sell the iPhone, only AT&T. My local ILEC resells AT&T service, even has wireless stores like the AT&T stores so they've got a large investment in this, and they aren't allowed to sell the iPhone.
Ron Paul
Premium
join:2008-01-11
Seattle, WA

Re: It's REALLY Exclusive

said by Matt See Profile :

If AT&T paid for the privilege of exclusivity, I don't see a problem with it. In this case however, even AT&T resellers aren't allowed to sell the iPhone, only AT&T. My local ILEC resells AT&T service, even has wireless stores like the AT&T stores so they've got a large investment in this, and they aren't allowed to sell the iPhone.
I agree. AT&T deserves a reward for taking a risk, albeit a calculated and small one. The exclusivity could've easily been an unprofitable endeavor had the product not succeeded.

No Virginia, you are not entitled to an iPhone. This attitude is exactly what's wrong with this country and part of how we came to be in the precarious position in which we now find ourselves.

I'd like a government that focused on important issues instead of whether or not an iPhone is a right. I don't think I'm alone in this.
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ashworth

join:2001-10-06
Pittsburgh, PA
AT&T pays Apple good money, like $400 or more for each iphone activation, sounds more like a business deal than stifling competition. VZ Wireless is supposed to have iphone soon too, so who really cares ??
Ron Paul
Premium
join:2008-01-11
Seattle, WA

Re: It's REALLY Exclusive

said by ashworth See Profile :

so who really cares ??
Godless heathens. Seriously.

GOLFnSUN
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Cell phone devices prices will rise if advocates win

There is plenty of competition. But one result of ending exclusivity deals would be everyone paying full price for cell phones. And the ones that would hurt the most are those users who can least afford to buy cell phones up front.
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Bill Dollar

join:2009-02-20
Washington, DC

Re: Cell phone devices prices will rise if advocates win

Maybe your argument would fly if we were talking about ending long-term contracts, which is what the phone subsidies are based on. But we are talking about exclusivity, which is a completely different thing. One only need to look at the large set of phones that are not in exclusive deals to see this.

In fact, ending exclusivity might result in lower-cost phones, as carriers differentiate by lowering the cost of the latest "hot" handset.

omegadangerdoom

@dai.com

said by GOLFnSUN See Profile :

There is plenty of competition. But one result of ending exclusivity deals would be everyone paying full price for cell phones. And the ones that would hurt the most are those users who can least afford to buy cell phones up front.
Could you elaborate on that more please? When the blackberry and the razr broke exclusivity, they still had a subsidy, discounted price. I use to sell cellphones for a couple of years and I don't see anything like ending exclusivity bring UP the price on cell phones. The industry wouldn't be able to handle the backlash.

Ultimately, I think its a moot point anyways. Most people like going with the carrier for THE SERVICE not THE DEVICE. I've only rarely seen people leave their service for a phone (especially if they know their current service is superior) ie: leaving Verizon for Sprint because the latter has the new Palm Pre (which admittedly IS cool).

GOLFnSUN
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1 edit

Re: Cell phone devices prices will rise if advocates win

said by omegadangerdoom :

said by GOLFnSUN See Profile :

There is plenty of competition. But one result of ending exclusivity deals would be everyone paying full price for cell phones. And the ones that would hurt the most are those users who can least afford to buy cell phones up front.
Could you elaborate on that more please? When the blackberry and the razr broke exclusivity, they still had a subsidy, discounted price.
The same advocates are also proposing that cell service providers NOT be allowed to subsidize cell phone purchases by tying the purchase to cell service contracts.

IOW, no exclusivity & no cell phone purchases subsidized by contracts. »techdirt.com/articles/20090305/1···12.shtml
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jhboricua
ExMod 2000-01
join:2000-06-06
Minneapolis, MN
clubs:

said by omegadangerdoom :

Ultimately, I think its a moot point anyways. Most people like going with the carrier for THE SERVICE not THE DEVICE. I've only rarely seen people leave their service for a phone (especially if they know their current service is superior)
Huh? So because you've rarely seen people leave their service for a phone you concluded that is a rare occurence? I suppose the potential millions of users that have switched to AT&T so they can have an iPhone don't count.

omegadangerdoom

@dai.com

Re: Cell phone devices prices will rise if advocates win

said by jhboricua See Profile :

said by omegadangerdoom :

Ultimately, I think its a moot point anyways. Most people like going with the carrier for THE SERVICE not THE DEVICE. I've only rarely seen people leave their service for a phone (especially if they know their current service is superior)
Huh? So because you've rarely seen people leave their service for a phone you concluded that is a rare occurence? I suppose the potential millions of users that have switched to AT&T so they can have an iPhone don't count.
The "millions" of users who switched over to the iphone you mentioned mostly were ALREADY At&t customers (or cingular customers...same thing).

Yeah working with Verizon, I had to study and re-study things like churn rates and retention. I looked it up and followed up on it everyday. YES, they were a ridiculous number of people going over to At&t for the iphone but not as many as you think and a good number of them left after the 30 days to stay with their previous service. Some people even got the iphone just to bring them over to T-mobile (which, IMO, has GREAT customer service compared to At&t).

I'm getting off track here. Basically phones like the iphone, blackberry storm and the like are a niche product usually made to RETAIN customers. Rarely will customers who leave a service they like go over to another provider who may have inferior service (not saying that you WILL be met with a provider with inferior service). I just don't think this whole debate of exclusivity really matters. People like what they like. Your average customers (those who make the bulk of most cell phone service providers) don't care if another company has the hot phone. More likely than not if the subject comes up they ask their current provider if they have a phone that compares to the competition.
jjeffeory

join:2002-12-04
USA
I know 10 people who went with at&t because of the iphone. I know 3 that want the iphone but won't leave their current carrier. The iphone kind breaks that theory. People really like it.

Steve Mehs
Go Sabres

join:2005-07-16

quote:
Ultimately, I think its a moot point anyways. Most people like going with the carrier for THE SERVICE not THE DEVICE.
What planet are you on? A friend of mine paid the ETF on Verizon to get out of his contract and went with AT&T just for the iPhone. And just yesterday, I went with AT&T just for the iPhone, but I'm not going to use it as a phone, AT&T is basically getting $70/month for me for mobile internet access, I'm sticking with Nextel for day to day calling. I hate AT&T, I just really like the iPhone.
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jameswade

join:2001-12-09
Hot Springs, NC
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We'll pay full price one way or another!

Still my first response would be to leave the marketplace alone, but these guys are using our public airwaves, even if they (I mean we) pay for their usage. I don't like this exclusivity and would like more open systems.

Where we are located there is no AT&T, only Verizon and US Cellular. No iPhones for us. No Android phones for us. At least there are CDMA versions of Blackberrys...
moonpuppy

join:2000-08-21
Glen Burnie, MD
·Verizon Online DSL

said by GOLFnSUN See Profile :

There is plenty of competition. But one result of ending exclusivity deals would be everyone paying full price for cell phones. And the ones that would hurt the most are those users who can least afford to buy cell phones up front.
First off, contracts are the reason new phones cost next to nothing or even free.

Second, who cares if they can't afford a cell phone since they are luxury items.
jjeffeory

join:2002-12-04
USA

Re: Cell phone devices prices will rise if advocates win

Huh? If you say this you're basically saying that all phones are luxury items...

Many people skip installing land lines in favor of cell phones. Are they still luxury items?

I would agree that if you have a land line AND a cell phone, then the cell phone is a luxury item. If one is using a cell phone exclusively for all interactions to the world, then it is not a luxury.

SquareSlinky
Premium
join:2004-05-25
Tampa, FL

Re: Cell phone devices prices will rise if advocates win

All phones are luxury items. You do not need one to live.
moonpuppy

join:2000-08-21
Glen Burnie, MD
·Verizon Online DSL

said by jjeffeory See Profile :

Huh? If you say this you're basically saying that all phones are luxury items...
Cell phones are luxury items.

said by jjeffeory See Profile :

Many people skip installing land lines in favor of cell phones. Are they still luxury items?
Yes, cell phones are still luxury items. Landlines have discount programs for those who cannot afford one.

said by jjeffeory See Profile :

I would agree that if you have a land line AND a cell phone, then the cell phone is a luxury item. If one is using a cell phone exclusively for all interactions to the world, then it is not a luxury.
Yes, it is. Most cell phone plans cost more per month than many landline plans.

NetAdmin
CCNA

join:2008-05-22

said by GOLFnSUN See Profile :

But one result of ending exclusivity deals would be everyone paying full price for cell phones. And the ones that would hurt the most are those users who can least afford to buy cell phones up front.
Then they will just have to live with a cheaper model or no phone at all.

I honestly believe that moving to a model where the customer pays the full, unsubsidized price for phones would be a step in the right direction.
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jjeffeory

join:2002-12-04
USA

Re: Cell phone devices prices will rise if advocates win

I agreed with you. Then maybe we can get out of these stupid contracts. There are no guarantees in life. Cell phone companies should expect to keep customers by giving good service at a good price, not ETF...
jjeffeory

join:2002-12-04
USA
Oh my.... I disagree. I don't think ending exclusivity deals would result in everyone paying full price for cell phones. People buying iPhones may have to pay full price, other phones would still be sub'ed.

KrK
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I disagree. All phones should be compatible and interchangeable... or at least backwards compatible....

You could still have free deals or long term contracts with rebated costs--- it's just YOU pick which phone to use it on.
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Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ
Apple should be able to sell the iPhone to whoever they like, phones being exclusive to one network is not only dumb but should be illegal.
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GOLFnSUN
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Re: Cell phone devices prices will rise if advocates win

said by Kearnstd See Profile :

Apple should be able to sell the iPhone to whoever they like, phones being exclusive to one network is not only dumb but should be illegal.
They had that option when they 1st starting selling the iPhone. No one forced them to sign an exclusive contract with AT&T. They did so because they determined that was the most lucrative deal for them.
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james

join:2001-02-26
antarctica

said by Kearnstd See Profile :

Apple should be able to sell the iPhone to whoever they like, phones being exclusive to one network is not only dumb but should be illegal.
What you're saying makes no sense, you're saying that Apple should be able to decide who to sell to, but that it should be illegal for them to decide to only sell to users of one network...

nothing00

join:2001-06-10
Annapolis, MD

Europe got it right, we got it wrong

For various European big government, anti-capitalistic, anti-free market reasons the cell phone and provider industry in Europe is far superior to the situation in the US.

A blind, free market, "let the big companies do whatever they can because it will benefit the consumer" model is naive. We're suffering for lack of vision, oversight and regulation in the cell market, internet access, automotive, energy, banking industry (!), health care and others.

Of course, lots of those execs got to make great money... So it works for some people, just not the consumer.
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BillRoland
Premium
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Ocala, FL
clubs:

Re: Europe got it right, we got it wrong

LOL, thanks for that, I needed my Friday laugh.

rec9140
Provoice just DO it

join:2003-07-29
Mulberry, FL

Phones should be sold separate from service

There should be cell phone stores, site, kiosks, etc. that you go to pick phone that matches your carriers technology and then you go to your carrier and sign up.

You have VZW, US Cellular ......here are the CDMA phones..

You Boost/nexhell....here are the iDEN radios.....

If the carriers want to sell phones too, thats fine too.

The carriers will never go for this in the US as they want you tied into a contract via cheap phones.
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Cellphone

@comcast.net

Re: Phones should be sold separate from service

said by rec9140 See Profile :

There should be cell phone stores, site, kiosks, etc. that you go to pick phone that matches your carriers technology and then you go to your carrier and sign up.

You have VZW, US Cellular ......here are the CDMA phones..

You Boost/nexhell....here are the iDEN radios.....

If the carriers want to sell phones too, thats fine too.

The carriers will never go for this in the US as they want you tied into a contract via cheap phones.
What you suggest heavily benefits the consumer. I doubt it will happen anytime soon.
soothsayer15

join:2002-03-01
Irving, TX

How Bougus

An iPhone isn't a need, it's a want. But this is America, so people have to get things the way they want when they want it. I'm all for consumer groups, but this time they have it wrong. I know they are pushing for the end of all exclusivity, but where have they been for the past few years.Other companies are paying the price for being asleep at the wheel when Apple saw an opportunity. They were more concerned about maintaining their quarterly profits then spending money on research & development.Some of these companies have some awesome phones overseas, but their American strategy is to copy want someone else is doing. The iPhone isn't huge in Japan, I wonder why?

ninjatutle
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join:2006-01-02
San Ramon, CA
·Sprint Mobile Broa..


1 edit

TIA! THIS IS AMERICA (US)

Socialist Groups, Nazilla Attack Cellphone Exclusivity

The socialist party, smaller pre-paid carriers (like StatePCS) and even Nazilla have joined hands to protest wireless device exclusivity -- like the devil's exclusive contract with Apple to offer the iPhone.

More and more I'm seeing socialistic ideals being spread and embraced. Free enterprise, capitalism?

Nothing gets my blood boiling more than socialist

/soapbox
Pentaxian
Premium
join:2008-01-23
West Milford, NJ

Re: TIA! THIS IS AMERICA (US)

The bottom line is at Apple. They need to rethink their marketing and partnership strategy. As a share holder I am immensely upset at the fact that *only* AT&T was allowed to carry the iPhone, which of course Apple had a lot riding on. It pains me to think of the rewards Apple and it's shareholders would have reaped had Apple forgone the exclusivity of the iPhone and offered it to any carrier that wanted it.. Talk about mismanagement. This is a classic example.

jhboricua
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said by ninjatutle See Profile :

Nothing gets my blood boiling more than socialist
Nothing gets my blood boiling more than fearmongers that slap the socialist tag on anything they feel like.
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ninjatutle
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Re: TIA! THIS IS AMERICA (US)

Socialism
so·cial·ism (sô'shə-lĭz'əm)

An economic system in which the production and distribution of goods are controlled substantially by the government rather than by private enterprise, and in which cooperation rather than competition guides economic activity. There are many varieties of socialism. Some socialists tolerate capitalism, as long as the government maintains the dominant influence over the economy; others insist on an abolition of private enterprise.

»dictionary.reference.com/browse/···src=2888

jhboricua
ExMod 2000-01
join:2000-06-06
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clubs:

Re: TIA! THIS IS AMERICA (US)

Fear mongering
(or scaremongering)

The use of fear to influence the opinions and actions of others towards some specific end. The feared object or subject is sometimes exaggerated,, and the pattern of fear mongering is usually one of repetition, in order to continuously reinforce the intended effects of this tactic, sometimes in the form of a vicious circle.

»en.wikipedia.org/wiki/Fear_mongering
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ninjatutle
Premium

join:2006-01-02
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Re: TIA! THIS IS AMERICA (US)

Hmmm, isn't fear mongering what Hitler, Stalin and Obama used to get into power

jhboricua
ExMod 2000-01
join:2000-06-06
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clubs:

Re: TIA! THIS IS AMERICA (US)

said by ninjatutle See Profile :

Hmmm, isn't fear mongering what Hitler, Stalin and Bush used to get into power
There, corrected for you.

kyler13
Is your fiber grounded?

join:2006-12-12
Arnold, MD

Re: TIA! THIS IS AMERICA (US)

What on earth was there to fear back in 2000 when Bush came into power? Proliferation of the practices of a democratic administration that resulted in on-shore terrorism and a collapsing economy? Maybe we should have been afraid.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
So why do you accept anti-free market laws continuously?
jjeffeory

join:2002-12-04
USA
I agree with you. I'm not crazy about too much socialism either.
This is, however, what happens when capitalism is allowed to run amok and we get some people gaming the system and screwing things up.

james

join:2001-02-26
antarctica


1 edit
said by ninjatutle See Profile :

Nothing gets my blood boiling more than socialist
I find that amusing, considering so far there has never been an actual socialist country... ever.
Sure there have been nations who called themselves socialists, but they weren't any more socialist than black slaves in the south.

marigolds
Gainfully employed, finally
Premium,MVM
join:2002-05-13
Saint Louis, MO

said by ninjatutle See Profile :

More and more I'm seeing socialistic ideals being spread and embraced. Free enterprise, capitalism?
The exclusivity contracts would be an anti-capitalist action and antithesis to a free market. Much more akin to a corporatized island socialism system (which is a much more successful system than capitalism, but only works successfully at small scales).
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See 6 replies to this post
beaups

join:2003-08-11
Hilliard, OH

What exactly are they proposing?

Take the iphone as it's the best example. They want to build it and make it exclusive to the highest bidder...If exclusivity goes away do they then HAVE to build a phone that's compatible with everyone elses network? Does the government step in and say "hey apple, you can't ship a gsm iphone unless you build cdma versions too"? Sounds absolutely CRAZY to me.

One big difference in the US are all the different carrier technologies. Even our 2 3G players don't use the same frequencies.

I don't see where this is any of the government's business.
tdouglas22

join:2001-09-25
Memphis, TN

I'm all for this

If they want to make the iPhone or any other cell phone available on any cellular network then I'm all for it. Many people would love to get these phones and have them be designed for their network. I see nothing but profit for the companies involved in making the phones.

Paul Kim Mozilla

@sbcglobal.net

Mozilla is not involved

Mozilla has nothing to do with the complaint regarding device exclusivity to carriers. In February 2009, we joined the Electronic Frontier Foundation in supporting the EFF’s petition to the US Copyright Office to give a DMCA exemption to iPhone jailbreaking, which is an entirely separate issue from device exclusivity. The BusinessWeek article you link to is a bit confusing on this connection, but if you read through to the second page you’ll see we’re not a part of the rural cellular complaint.

Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY
·Qwest.net

Then there is Japan....

I think it is hilarious, Apple marched into Japan with the
i Phone thinking they had a winner. They where shocked to find out they couldn't even give the i Phone away, The Japanese looked at it all they said was why should we purchase this piece of crap. We have had touch screen phones for years, and it doesn't even have a camera. They tried to give the i Phone away for free with a two year contract and they could not even do that. Looking at the tea leaves I see a 4G i Phone with a camera and all of the other stuff the Japanese want in the very near future.
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KrK
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Re: Then there is Japan....

The Japanese phone market (and telecommunications in general) is so far out in front of the USA, well.... it makes us look like a third world backwater.
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otty

join:2008-10-24
Toronto, ON
·TekSavvy Solutions..
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Just buy an ulocked..

Phone and use it on your favorite carrier. This rules out CDMA carriers, but I don't like the way CDMA locks you down like that anyways. I always just buy unlocked GSM phone and then follow the best service deals when they pop up, and take my phone travelling. Like in Europe where I can buy a SIM for $1.
Forums » Consumer Groups, Mozilla Attack Cellphone Exclusivity


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