Consumer groups rail against exclusive handsets

The nation’s leading consumer groups urged the Federal Communications Commission to act on a request to investigate exclusivity pacts between top mobile-phone carriers and handset suppliers that rural wireless operators claim are anticompetitive.
Last month, the Rural Cellular Association petitioned the FCC to open a rulemaking on special deals between vendors and AT&T Mobility, Verizon Wireless, Sprint Nextel Corp., T-Mobile USA Inc. and Alltel Corp.
“RCA’s petition here documents how wireless companies are using strangleholds over new devices to limit consumers’ options. When rural consumers have an already limited set of choices for wireless phone carriers, exclusive deals on handsets make a bad situation worse,” stated Consumers Union and the Consumer Federation of America in a letter to FCC Chairman Kevin Martin.
“Absent these exclusivity arrangements,” the consumer organizations added, “these innovative handsets could in most instances be made available to rural America by other carriers and to urban America by the consumer’s carrier of choice. No consumer should be shut out of the benefits of wireless technology. Those consumers interested in buying a specific handset should not be limited to one service provider, required to pay an inflated price for their desired handset, or forced to agree to unfavorable service terms because the market for the phone is devoid of any competition.”
CTIA, the national cellular industry association, replies that consumers have an abundance of wireless device choices in the marketplace.