CQ TODAY MIDDAY UPDATE
June 22, 2009 – 1:55 p.m.
Congress Asked to End Exclusive Deals for Smartphones
Rural cellular phone providers are pressing Congress to force open the often-exclusive market for smartphones, arguing that their inability to sell these hot items is hurting their bottom lines and depriving their customers.Mississippi-based Cellular South Inc. and Illinois-based U.S. Cellular Corp. were on Capitol Hill last week to make their case for some legislative relief.
“The situation with exclusivity is bad and only getting worse. Cellular South has tried to find solutions . . . without resorting to policymakers” to no avail, Hu Meena, Cellular South’s chief executive, told the Commerce, Science and Transportation Committee at a June 17 hearing.
John E. Rooney, chief executive of U.S. Cellular, said his company can’t sell nine out of 10 of the top-selling phones because they are under an exclusive contract with another wireless provider.
“Exclusive arrangements are exclusively damaging to rural citizens, because oftentimes the biggest carriers don’t offer any service at all,” Rooney said. He said that means customers in large swaths of rural America are out of luck if they want the latest mobile devices are out of luck.
Sales of smartphones such as the Blackberry Storm and iPhone, which combine the power of a mini-computer and a phone, are increasing rapidly — their share of the wireless market has jumped from 12 percent to 23 percent in just the past year.
The arguments against exclusivity from rural providers such as Meena’s, and the counterpoint from larger wireless companies with exclusive deals such as AT&T, sound almost identical. Both suggest that their preferences ultimately benefit consumers by fostering competition and innovation and driving down prices.
Though most of the largest wireless companies have their own exclusive deals for smartphones, the one most directly in the crosshairs is AT&T’s, due to the popularity of its iPhone, which it services under exclusive contract.




Comments
I haven't heard the hearings yet but shouldn't Rooney be busy partnering with developers on a smartphone for his company that beats the competition. It can't be hard ot beat AT&T for service. I just got a T-Mobile G1 and love the features.
If the carriers are going to use the public air waves then they should offer service everywhere.
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