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story category Sprint CEO: Exclusive Phone Deals Need Limits
While new FCC boss continues world ambiguity tour 2009...
05:39PM Friday Sep 18 2009 by Karl Bode
tags: legal · fcc
Tipped by TKJunkMail See Profile
With both the FCC and Congress investigating the wireless industry's use of exclusive handset agreements, Verizon has been busy trying to stall any new efforts to prohibit such agreements. The FCC's two Conservative members this week also came out in support of exclusive agreements, while the agency's three Democrats (and new boss Julius Genachowski) apparently aren't sure what they believe:
Genachowski, the first to respond (to whether he supported exclusivity deals), began to formulate an answer when Buyer cut him off to repeat that he was asking for a one-word response. Genachowski then said that the question "doesn't lend itself to a yes or no." Democrats Michael Copps and Mignon Clyburn agreed with Genachowski, while Republicans Robert McDowell and Meredith Attwell Baker simply answered, "Yes."
This continues a troubling trend for the new FCC boss, who we've noted is developing a nasty habit of not actually taking a solid position on anything. It's still not clear if he's being painfully vague in order to keep his political opponents blind -- or simply because he suffers from some form habitual legal ambiguity disorder. Interestingly, Sprint CEO Dan Hesse came out in favor of at least imposing time limits on exclusivity deals:
Sprint Chief Executive Dan Hesse said exclusive carrier deals with handset vendors are important for promoting innovation in the industry. He was responding to a question about a U.S. regulatory probe into such deals at a conference. "The legitimate question is how long the exclusivity periods need to be. It's a fair question," Hesse told the audience at the Goldman Sachs Communacopia conference.
As we mentioned earlier today, the FCC is planning new network neutrality guidelines that may include the wireless industry, taking aim at things like handset exclusivity contracts or Apple's decision to ban Google Voice from the application store.

Related:
  1. What Does Copyright Have To Do With Improving Broadband?
  2. What Network Neutrality Is REALLY About
  3. Cable Industry: Shucks, Guess Nobody Wants CableCARDs
  4. Cox Scraps App-Specific Throttling Trials
  5. FCC Study: Open Access Lowers Prices, Improves Competition
  6. FCC Imposes Shot Clock On Wireless Tower Builds
  7. 'Data Driven' FCC Still Using Ancient Data?
  8. FCC Hints At Return To Open Access
Forums » Sprint CEO: Exclusive Phone Deals Need Limits
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VansHSI

join:2005-01-29
America

Can't disagree

I think some exclusivity should be allowed. The question is how long? 6 months? 12 months?

Definitely not the 3 year business of the iphone...

en102
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Re: Can't disagree

The only other US carrier of any size that could deploy the iPhone is T-Mobile, and it doesn't support T-Mobiles AWS band for 3G.
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Re: Can't disagree

said by en102 See Profile :

The only other US carrier of any size that could deploy the iPhone is T-Mobile, and it doesn't support T-Mobiles AWS band for 3G.
It would be interesting if all that was needed to change was a different radio that Apple could implement easily.
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Re: Can't disagree

said by Gbcue See Profile :

said by en102 See Profile :

The only other US carrier of any size that could deploy the iPhone is T-Mobile, and it doesn't support T-Mobiles AWS band for 3G.
It would be interesting if all that was needed to change was a different radio that Apple could implement easily.
From pictures of a stripped down iPhone, it would appear to be possible. The wireless interface board appears to be separate from the applications circuit board. I would imagine that all that is needed is a wireless board for the T-Mobile AWS frequencies and you would be good to go. I have no doubt it would even be possible to put in a CDMA based board if one existed. The SIM slot would have to be plugged up but otherwise I would think it would work.

Even my ancient Treo 600 has a wireless interface board that is separate from the main board.
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axus

join:2001-06-18
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Re: Can't disagree

This does mean that there'd have to be two different iPhones. I think they'd just come out with a new one that supported both. Of course, the exclusivity agreement means they don't have to think about it for now.
hottboiinnc
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Re: Can't disagree

Just need to make a world phone. GSM and CDMA....Just like the Storm. Supports both GSM via SIM and CDMA.

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Re: Can't disagree

said by hottboiinnc See Profile :

Just need to make a world phone. GSM and CDMA....Just like the Storm. Supports both GSM via SIM and CDMA.
You don't need CDMA to make it a "world phone".
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Matt
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Re: Can't disagree

said by Gbcue See Profile :

said by hottboiinnc See Profile :

Just need to make a world phone. GSM and CDMA....Just like the Storm. Supports both GSM via SIM and CDMA.
You don't need CDMA to make it a "world phone".
You do for the US market.

Gbcue
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Re: Can't disagree

said by Matt See Profile :

said by Gbcue See Profile :

said by hottboiinnc See Profile :

Just need to make a world phone. GSM and CDMA....Just like the Storm. Supports both GSM via SIM and CDMA.
You don't need CDMA to make it a "world phone".
You do for the US market.
GSM is fine.
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hottboiinnc
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Re: Can't disagree

Not when you have 2 major carriers that still relay on CDMA. Why do you think the BB Storm has a SIM Card slot? So you can take it overseas and use it if you want on their networks and then come back here and use the VZW CDMA network.

Also the last time I checked VZW and Sprint used CDMA NOT GSM.

Gbcue
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Re: Can't disagree

said by hottboiinnc See Profile :

Not when you have 2 major carriers that still relay on CDMA. Why do you think the BB Storm has a SIM Card slot? So you can take it overseas and use it if you want on their networks and then come back here and use the VZW CDMA network.
So Verizon can tout it as a "world phone".

Without it, it's just another Verizon phone. Notice how you can't get the Storm on any other network besides Verizon? I wonder why... Probably because nobody else wants it and that's Verizon's only way to market that phone.
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NOCMan
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This is patently untrue, there are FCC approved versions of the iPhone for CDMA/LTE/GSM. While Apple may not be producing more than a few test samples they do exist in the US and are being tested on various carriers. Just like the Razr and other popular phones that came out as GSM first, they each had a CDMA variant that was quickly produced and sold once the exclusivity embargo was lifted.

Trust me nobody wants to see a GSM iPhone on T-Mobile. Perhaps once they deploy their 3G non edge network to any significance, but until then it's not going to be a step forward. Verizon Wireless is the only carrier that could make a significant impact in sales that Apple wants to see.

Plus a second GSM carrier only causes people to switch carriers, anyone wishing to go the CDMA route has to buy a new phone which would bring more sales to Apple. They're not stupid. They'll go with VZW, and come up with some excuse why the GSM phones are not being sold for other carriers to drive up sales for a bit, then once they sag, they'll lift that embargo.
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hottboiinnc
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Re: Can't disagree

being tested on various carriers? proof as they always say on here? They may have approved a GSM and CDMA phone but LTE? Nothing has been said of that one even being approved by the FCC because it would have been on the front page here along with who was testing what.

Also 3G works great where its available. Not in your city? Too bad.
fiberguy
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I think exclusive deals should be allowed, period in the context you are speaking of.

Where does the government get off telling someone like apple that they HAVE to produce a phone for CDMA networks when they're only making it for GSM?

In the case of the iPhone, if they make it for GSM only, that's their choice. Where I distinguish my feelings over yours is that if it were CDMA, for example, then I should be able to take the phone I purchase to another CDMA carrier. That, however, doesn't affect exclusive agreements as to who they sell the phone through. Once I buy the phone and either settle my contract term OR pay the break out fee, the phone is mine - that's the deal.

However, still, there is NOTHING that will make me change my mind that would make me side on the fact that the government should force any maker to make a model of phone compatible on ALL carriers.. that's going way out of line.

If apple wants to only make a phone that works on ATT - then that should be their right to do so.. what would you like, you want tax subsidies given to apple to offset the extra cost of producing all those different variations of phones?

There is something about having phone models available to certain carriers - it creates competition. The iPhone is one of a rare case in phones.. it's one phone for one carrier. The crackberry has the curve available for all carriers - they wanted it to be that way and they were smart.. they're taking more market and growing faster than apple's iPhone.. apple has the right to limit their growth if they want to be stupid. It's anti-american to force a business into a business model that doesn't support their own desires.

Everyone has the ability to get an iPhone - just have to get the service it's made for. I'd like my Chevy Impala LTZ to be made to run on diesel and not unleaded... is it fair that I can't get it in a diesel model? Should the govt' make them produce it in a diesel version? .. same thing. Currently if I want that car, I can only put unleaded gas in it. You want the iPhone, go to ATT - you have NO rights guaranteed you to have any phone you want made for every network on the planet..

This argument is absurd..

So tell me, too.. when is NFL direct Ticket going to be on Comcast, Cox, Time Warner, Charter, Dish Network, etc? DTV paid a lot of money to have that right to broadcast the Sunday ticket - it's what gives them the competitive edge and I support that.
BosstonesOwn

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Re: Can't disagree

I think your misunderstanding the whole argument , they are merely saying if the phone is produced in gsm , then it should be unlocked by default and allowed to be used on other gsm providers , they are not saying it should be made to suit every carrier by force.

I agree with them , any cdma phone should work on any cdma carrier , and the same with gsm , exclusivity deals should still be allowed. But if the user is willing to pay full cost for the phone it's their choice what provider they use it on.
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Re: Can't disagree

said by BosstonesOwn See Profile :

I agree with them , any cdma phone should work on any cdma carrier , and the same with gsm , exclusivity deals should still be allowed. But if the user is willing to pay full cost for the phone it's their choice what provider they use it on.
I agree with this, and did in my statement above.

I believe that once you have satisfied, and if in a contract, are in good standing, your phone should be unlocked and you're free to go where you can get someone to activate it. But, as long as a user agrees to a deal for a reduced price, I believe they must fulfill their obligation to the terms of the agreement before they can simply take it and run.

Matt
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So, you support exclusivity agreements for GSM only? How can you say Apple should be allowed to make a GSM exclusive phone, but CDMA carriers can't also keep that exclusivity by locking the phone to their network? I don't see the difference there.

If you were talking about a boatload of work to make a phone GSM or CDMA, then I might be inclined to agree. However, the expense to make a phone GSM or CDMA isn't that great.

I honestly feel arguments like this (thank god) will be moot once the LTE migration is finished.
hottboiinnc
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Re: Can't disagree

Easy because CDMA phones can work on ANY CDMA Network (ie: VZW, Sprint, Cricket/Revol/MetroPCS) although CDMA carriers do NOT allow you to bring a phone to them. Even though ANY CDMA phone WILL work. But these carriers do not want this to happen.

iPhone is different due to its GSM, and if you jail break it, it will work on T-Mobile or any other GSM carrier.
axus

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I agree with parts of what you're saying. The government cannot and should not mandate what development and company must actively do, or mandate certain features be included. That's one reason I think the V-chip rule is bad, requiring certain programming, etc. They can't tell Apple to make a phone that supports anyone with a cell tower.

I think the government function is to say what companies must NOT do, like "you can't broadcast in analog anymore", "you can't cause interference", "you can't override statutory rights in a contract", "you can't own more than 35% of the cable television market". If they want to say "you can't make an exclusivity agreement", I'm all for it. That doesn't mean Apple has to sell to anyone, just that AT&T can't stop them.

Also, I think these monopoly power kind of issues belong to the FTC, not the FCC. Exclusivity agreements are about "restraint of trade", not spectrum or interoperability.

I'll make an exception on "prohibit but don't require" for things like safety concerns in planes, trains, and automobiles, and auditing requirements for financial institutions. Saying "If you make a car, it has to have a seatbelt and airbag" or "If you take people's money for savings and investments, you must do these things" is necessary. Ultimately the limit of our government comes from the Constitution plus politicians we elect, in theory that lets common sense override rigid ideology.

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Sprint Jealous Much

Are they jealous of the other companies actually gaining customers each quarter or the lack of really good (iPhone) handsets on a non-GSM platform?
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BF69

join:2004-07-28
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Re: Sprint Jealous Much

more like Sprint hypocrite much. The reason why I can't watch NFL games on my Verizon phone is because Sprint made an exclusive deal with the NFL.

spewak
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Re: Sprint Jealous Much

said by BF69 See Profile :

more like Sprint hypocrite much. The reason why I can't watch NFL games on my Verizon phone is because Sprint made an exclusive deal with the NFL.
Wait a minute BF69..... TOUCHDOWN, RAIDERS!!!! Please excuse, I was watching the NFL on my Palm Pre.
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Re: Sprint Jealous Much


Super Bowl 37
said by spewak See Profile :

said by BF69 See Profile :

more like Sprint hypocrite much. The reason why I can't watch NFL games on my Verizon phone is because Sprint made an exclusive deal with the NFL.
Wait a minute BF69..... TOUCHDOWN, RAIDERS!!!! Please excuse, I was watching the NFL on my Palm Pre.
Ah memories. Oh I'm also enjoying the better call quality of my Verizon service.

spewak
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Re: Sprint Jealous Much

Dohhhh!
As for call quality, I think it has been said many times here that if you are enjoying your celly, and it works for you, then I say bully, bully to you sir. As for my call quality with Sprint, it is equally as better-er as your Verizon service. You dig?
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hottboiinnc
ME

join:2003-10-15
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No BF69 isn't pissy about the NFL being on Sprint. He's pissy because he can't get anything but VZW at his house. Haven't you read his posts?

Eat Me

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said by Gbcue See Profile :

Are they jealous of the other companies actually gaining customers each quarter or the lack of really good (iPhone) handsets on a non-GSM platform?
Huh, lack of what? I must be imagining the pre then.

Don't forget that Sprint basically kickstarted the smartphone revolution with the treo.
WhatNow
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Why share

Why does a business need to share every success. If it was your business and you had an exclusive deal on a successful product would you like it if you were forced to share with all your competitors. The successes pay for the break even and failures.

If everybody had the iPhone would the Pre be successful. We are becoming a society of I want and I will force someone to give it to me cheap.

You can not have everything you want so get over it.
By the way I want a Billion dollars because all those rich people have it.

jmn1207
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Re: Why share

said by WhatNow See Profile :

If everybody had the iPhone would the Pre be successful.
The Pre was successful?
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Re: Why share

said by jmn1207 See Profile :

The Pre was successful?
Yup.

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Re: Why share

said by pandora See Profile :

said by jmn1207 See Profile :

The Pre was successful?
Yup.
YOU LIE!
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Re: Why share

said by antwanp See Profile :

said by pandora See Profile :

said by jmn1207 See Profile :

The Pre was successful?
Yup.
YOU LIE!
»money.cnn.com/2009/09/17/technol···09091717

Palm Inc.'s smartphone sales rose 134% to 823,000 units during the latest quarter on the back of the new Pre, but the company still reported its ninth consecutive quarterly loss and sales fell 81%.

The company also announced that it will offer approximately 16 million shares of common stock for "working capital and general corporate purposes."

Shares of Palm (PALM) fell slightly after rising by as much as 9% after hours.

The much-hyped Pre smartphone helped boost Palm's smartphone shipments from 351,000 in the prior quarter. The company did not separate Pre sales from other Palm phones, but experts forecasted Pre shipments of about 520,000, according to Matthew Thornton, analyst at Avian Securities.
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Re: Why share

Doesn't matter. It still won't help Sprint in the long run. They're still bleeding customers. Most who bought the Pre were due for an upgrade anyway

said by pandora See Profile :

»money.cnn.com/2009/09/17/technol···09091717

Palm Inc.'s smartphone sales rose 134% to 823,000 units during the latest quarter on the back of the new Pre, but the company still reported its ninth consecutive quarterly loss and sales fell 81%.

The company also announced that it will offer approximately 16 million shares of common stock for "working capital and general corporate purposes."

Shares of Palm (PALM) fell slightly after rising by as much as 9% after hours.

The much-hyped Pre smartphone helped boost Palm's smartphone shipments from 351,000 in the prior quarter. The company did not separate Pre sales from other Palm phones, but experts forecasted Pre shipments of about 520,000, according to Matthew Thornton, analyst at Avian Securities.
JasonBourne

join:2000-05-22
Kansas City, MO

Re: Why share

said by sprintsucks :

Doesn't matter. It still won't help Sprint in the long run. They're still bleeding customers. Most who bought the Pre were due for an upgrade anyway
If most "were due for an upgrade" chose to get the Pre then they must be happy with their service, as they didn't move away to another provider and more than likely choose to accept the $150 rebate locking them into a two year contract.

Your experience with Sprint, does not equal his, or anyone else's experience.

BF69

join:2004-07-28
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said by WhatNow See Profile :

Why does a business need to share every success. If it was your business and you had an exclusive deal on a successful product would you like it if you were forced to share with all your competitors. The successes pay for the break even and failures.

If everybody had the iPhone would the Pre be successful. We are becoming a society of I want and I will force someone to give it to me cheap.

You can not have everything you want so get over it.
By the way I want a Billion dollars because all those rich people have it.
I think as a busines I would want to make my customers happy. I'm not sure how restricting choice does that.
djeremy

join:2004-07-12
San Francisco, CA

I just don't understand why manufacturers lock themselves into these deals to begin with. If Apple sold the iPhone on all carriers, they'd probably have several million more customers.

I have an unlocked Android on T-Mobile right now, but I'd probably have an iPhone if it wasn't exclusively on America's worst network.

See 6 replies to this post
sonicmerlin

join:2009-05-24
Cleveland, OH
Lolwthbbq???~!!!

Phone manufacturers don't compete with other wireless carriers. They compete with other phone manufacturers.

If the Pre isn't good enough on its own to compete with the iPhone, then IT SHOULD FAIL. Duuuuuuuhhhhh!
Skippy25

join:2000-09-13
Hazelwood, MO

Exclusive deals serve 3 purposes regardless of the industry they are in.

1.) Make your product / service attractive.
2.) Raise the price of the product and/or service.
3.) Attempt to "lock" the customer in for a longer period of time

I would agree with above statement in that a business should not be forced to make their product to accommodate all systems. However, it is my opinion, that if their product supports a system by default then it should be available on all carriers of that system.

spike010101
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Lacey, WA
·Comcast

Don't forget

The apple AT&T agreement is a minimum of 3 years but a max of 5 so even though people may think it will end next year it most likely will go on until the 5 years is up. And by that time the iPhone will be on the same track as the iPod. It will be falling in sails because the "phone" will just be a side feature of the next technology. Which apple will take part in. .

Just remeber only a few years ago we were still using bulky motorola phones just imagine 5 years from now.
patcat88

join:2002-04-05
Jamaica, NY

Re: Don't forget

said by spike010101 See Profile :

Just remeber only a few years ago we were still using bulky motorola phones just imagine 5 years from now.
And real buttons were easier to use (try using an iphone in your pocket), and no wasting time on graphic fades.

w0g
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Why aren't the phones just sold completely separately from the cellphone contacts, open, and compatible with all networks? That makes a lot more sense to me and increases choice for the consumer.

See 11 replies to this post
rdmiller

join:2005-09-23
Richmond, VA

Where is Kevin Martin when you need him?

It's harder to follow the actions of the FCC when the chairman isn't a wild-eyed ideologue. This means paying attention to the debate and actualling listening when votes occur. Bummer.
SuperWISP

join:2007-04-17
Laramie, WY


1 edit

Will Sprint give up its exclusive on the Kindle, then?

As many frustrated users know, electronic "books" are delivered to the Amazon Kindle exclusively by Sprint. I, in fact, gave a Kindle that I was given as a gift by a relative to another family member because I could not use it effectively in my area, where Sprint does not have coverage.

Fair's fair, Sprint. If AT&T can't have an exclusive on the iPhone, why should you be allowed to have an exclusive on the Kindle?
Forums » Sprint CEO: Exclusive Phone Deals Need Limits


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