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Sat, Dec 05, 2009 - 04:11 PM EST  —  AAPL: 193.32 (-3.16, -1.61%)  |  NASDAQ: 2194.35 (+21.21, +0.98%)

FCC honcho: iPhone probe to focus on markets without service
Friday, July 31, 2009 - 02:32 PM EST

Apple Online Store "U.S. regulators probing wireless- phone contracts will focus on markets where Apple Inc.’s iPhone and Palm Inc.’s Pre aren’t available to consumers, the chairman of the Federal Communications Commission said," Todd Shields reports for Bloomberg. "The agency also will consider if innovation is promoted or hindered by exclusive arrangements such as those that limit the iPhone to customers of AT&T Inc. and the Pre to Sprint Nextel Corp. subscribers, Genachowski said."

MacDailyNews Take: Judging by the anemic sales figures being bandied about, reports of copious amounts sitting of shelves going nowhere, and reports of quality issues and high return rates, nobody much cares about the Palm Pre, FCC. Insert the iPhone competitor du jour, if you feel you must. Nine months ago it would have been "RIM's Storm" instead. That one didn't pan out either.

Shields continues, "An AT&T executive told a June 17 hearing the deals spur innovation and help lower prices. Verizon Wireless said this month that new deals with handset makers will last no longer than six months, down from one to two years for most contracts."

MacDailyNews Take: Verizon Wireless. The company without the iPhone. Because they blew it the first time. Sounds like they're trying to fix their mistake via government intervention, doesn't it?

Shields continues, "'Promoting competition is absolutely a main function of the FCC,' said Genachowski. He took office June 29 as the Obama administration’s choice to head the independent agency that sets rules for telephone, cable and broadcast companies... Genachowski attended Harvard Law School with President Barack Obama and helped shape his technology agenda."

Full article here.

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Jul 31, 09 - 01:38 pm Comment from: deepdish

FCC promoting competition. What a joke. Is that why the US has sucky wireless/wired internet speeds compared to a lot of other countries? ie Korea

Jul 31, 09 - 01:49 pm Comment from: MidWest Mac

Look, I understand that people don't like the government meddling in the private sector. I get it.

However, as someone who lives in an area where there is absolutely zero GSM service, I can't help but hope something does change here. My iPod touch is wonderful. It gives me a taste of what having an iPhone is like. But so often it feels like it's caged within the confines of my house or office because so much of what it does well is crippled when out of wi-fi range.

Sorry, but when I pit my love of national values versus my love of Apple products, communism looks pretty damn good.

Jul 31, 09 - 01:54 pm Comment from: Cheney 2012

It's going to be all right soon enough.

Rassmussen's Obama's approval rating index down to -11:

http://tinyurl.com/obama-failing

MDN MW: "trouble" Eerie.

Jul 31, 09 - 02:01 pm Comment from: zek

So what? You zombies will just vote the other lot back in.

Jul 31, 09 - 02:14 pm Comment from: Whatever

Where were all these probes about service areas BEFORE the iPhone. It is amazing that they don't look into exclusive deals or coverage areas BEFORE one product becomes so popular.. Bunch of idiots..

Jul 31, 09 - 02:20 pm Comment from: Falkirk

FCC "promoting" competition. Unbelievable.

Why don't they try just getting the hell out of the way.

Jul 31, 09 - 02:32 pm Comment from: Deus Ex Technica

"'Promoting competition is absolutely a main function of the FCC,' said Genachowski.

Save this quote. It'll be interesting soon enough...

Jul 31, 09 - 02:34 pm Comment from: Bizlaw

@Midwest Mac:

Communism looks good b/c you can't get 3G service? Get real. If we were a communist state, we'd still be using bag phones in our cars because there would be no incentive to produce anything innovative since you couldn't profit by it (except avoiding the gulag).

No one has a right to an iPhone or any cell phone. And the US is a big place with most of it's population concentrated in larger cities. Companies gave the right to decide not to provide services to an area if they don't believe they can make money there.

Jul 31, 09 - 02:38 pm Comment from: MidWest Mac

@ Bizlaw

Yes. I want communism. The kind that slaughters innocent people and has lots and lots of forced labor camps. Geez, you can't even get tounge and cheek anymore.

Jul 31, 09 - 02:46 pm Comment from: Anonymous©

Verizon is offering to limit their exclusives to 6 months, only to undermine AT&T;'s deal with Apple.

Jul 31, 09 - 02:49 pm Comment from: Macs Rule!

"Genachowski attended Harvard Law School with President Barack Obama and helped shape his technology agenda"

Then this technology agenda is flawed from the beginning!

Jul 31, 09 - 03:10 pm Comment from: roobler

@Macs Rule!

I think you should take over the 'technology agenda' instead, sounds like you totally know what you're talking about.

Jul 31, 09 - 03:16 pm Comment from: pastrychef

If, in their infinite wisdom, the FCC finds that Apple must sell to Verizon, Sprint, and T-Mobile, can they force Apple to spend R&D;dollars to develop a CDMA phone? What happens if they don't sell??? Is the government going to reimburse them???

Total stupidity. What a waste of money when they don't have money to waste.

Jul 31, 09 - 03:31 pm Comment from: roobler

@pastrychef
I'm not being sarcastic when I say this: YOU sound like you absolutely know what you're talking about why is it that chefs (I'm one myself) are so fscking brilliant. you hit the nail right on the head!

as an aside, I'm looking for help -- shoot me your resume? smile

Jul 31, 09 - 03:47 pm Comment from: hardmanb

Midwest... "Sorry, but when I pit my love of national values versus my love of Apple products, communism looks pretty damn good."

Wrong. The Apple iPhone's capabilities of liberating people is NOT allowed in communist countries. Too much (dangerous) freedom.

Big Government regulation would ban (or severely limit) such an outstanding product because it's existence and sale would be "unfair" to other companies that are less successful and those with inferior products.

Government's idea of "fairness" is the lowest common denominator. To "dumb down" the innovative and excellent so that all are equally inferior, and no one has a real choice.

Jul 31, 09 - 03:57 pm Comment from: Whatever

Give Verizon the iPhone - Let them have it - It just won't work on their network,,, Then you will hear the complaints.. How about Verizon gets on a world wide standard system.....

Jul 31, 09 - 04:04 pm Comment from: Spark

If the FCC were doing its job it would have stepped in years ago to standardize the technology used for cellular telephony used in the US. Now that would be in its purview. Business will take care of competition on its own, thank you.

@Bizlaw-- Throwing down the Communism card was a bit over the top. Government regulation has been going on since this country's inception. That said, people who vote in Democrats, especially the current crop, better be prepared for the biggest grab of control over all elements of society that we've seen in our life times. Please be prepared to accept responsibility for your actions.

Jul 31, 09 - 04:08 pm Comment from: hairyblackbum

Here in the Laurentians in Quebec, nobody's cell phone works. That's because the population is too thin and spread over a wide range of mountains and lakes.
Would an iPhone work here? Probably not.
Can Rogers get enough iPhone 3G S to sell? Not yet.
Is the Canadian government considering what to do about the fat that Bell Canada and Telus don't have the iPhone to sell? Not bloody likely; our great leader isn't that stupid.
So what will the FCC do about areas where nobody has good coverage and Apple's problem in meeting existing demand? The whole exercise is another example of pointless political pandering, just the same as insisting that grandma take off her shoes at the airport and throw away her mouthwash.

Jul 31, 09 - 04:47 pm Comment from: ldm

If you live in a rural area you don't get to fly nonstop to London or breath polluted air. There are costs and benefits to urban and rural life. Not having an iPhone is one of the costs of living in a rural area. So is not having ready access to top-quality medical care.

Jul 31, 09 - 05:28 pm Comment from: Predrag

It seems that nobody here gets it; instead, everyone is rushing to climb their soap box and fire away.

Here's the point of the inquiry (explained in simplest possible way).

There are several big, national carriers (AT&T, Verizon, T-Mobile, Sprint...). Then there are dozens of small, regional and local carriers. Many of these small carriers cover parts of the country where the big guys don't have coverage, and don't bother with it. So, these small-time carriers have been complaining that they can't get ANY of the cool devices, because one or the other BIG guy has an exclusive deal. You haven't heard Sprint, or T-Mobile, or Verizon complaining about any of the competitor's devices. Each of them has some "cool" (in relative terms) device that the others don't sell, and this is their way of attracting people (Sprint - Pre; T-Mobile - G1; Verizon - Storm, all this in addition to the previous generations of Instincts, RAZRs, Chocolates, Pradas, etc).

The little rural guys just can't get ANY of these cool phones. They aren't competing against any one of the big ones. If they were allowed to get a Pre, or an iPhone, it isn't like they'll suddenly be competing with Sprint or AT&T. They don't really HAVE any competition in their backyard. The irony of the situation is, these guys don't really need ANY of these cool devices in order to get customers; they are most often the ONLY game in town, so they're getting people's business even without cool phones. What they want is to be able to offer to their customers what people in more populated areas of the US are offered by one of the big guys.

I'm sure FCC has a better understanding of the problem that the posters in this group. It will be obvious to them (as it is obvious to the posters above, as well as other readers here) that the exclusive deals allow handset makers to profit from R&D invested into the device, as well as to provide best possible support to the customers. Competition in mobile industry is quite lively; every one of the big carriers has an iPhone like device (I know, I know, let's not argue on the substance of it), and they all seem to be poaching each other's customers. The problem is, the little rural guys are denied this privilege. If the exclusive agreements were to be worded in such a way that would allow, for example, Apple to sell iPhone to a carrier with fewer than, say, 200,000 subscribers, where AT&T has little or no coverage, everyone would be happy, and neither AT&T, nor Apple, would suffer financially from such a deal.

Jul 31, 09 - 05:32 pm Comment from: Predrag

And if FCC were to create a rule that would precisely define the conditions under which handset manufacturers would be allowed to sell outside these exclusionary contracts, the little guys would be very happy (as well as our MidWest Mac guy above, AT&T wouldn't mind, since it wouldn't affect its bottom line, and Apple wouldn't mind selling a few hundred thousand more iPhones in the US.

Jul 31, 09 - 05:39 pm Comment from: Predrag

Another thought; Verizon had announced that they'll limit their own exclusionary contracts to 6 months. This wasn't in an effort to put the ball in AT&T's court, so that eventually they could get an iPhone (they never will, even if AT&T contract expires; Steve can hold a grudge for a very, very long time). The purpose of Verizon's announcement was to try and forestall FCC's possible prohibition of exclusionary contracts altogether. In the recent years, Verizon was probably the biggest benefactor of exclusionary contracts (Prada, Chocolate, Instict, now Storm). They really need to keep the system in place, even if it means reducing the exclusivity period. The thinking behind the announcement is, if we all agree to limit exclusivity contracts to something that the FCC can deem reasonable, maybe this whole thing will just go away.

Verizon is much like Microsoft; they still don't realise that they will slowly lose to AT&T precisely due to the iPhone. Right now, they still genuinely believe they absolutely don't need the iPhone in order to stay on top. This is all just to protect the exclusivity system.

Jul 31, 09 - 06:10 pm Comment from: Mac Daddy

"So what? You zombies will just vote the other lot back in."

True. Americans are stupid (and I'm American).

The two parties just take turns porking us in the .- ... ...

Every 4 or 8 years (occasionally 12) one party passes us to the other party for their turn with us. And we keep voting for them, and we keep thinking we're getting "change." Hah!

Jul 31, 09 - 06:31 pm Comment from: Original Jake

Any of you dumb enough to have "confidence" in the FCC's understanding of the mobile market deserve to lose everything you have. Go government agencies, especially the FCC!, respond to these things POLITICALLY. If influential Senators from rural areas are in the driver's seat, the FCC will gladly damage a market structured to benefit innovation and 90% of consumers so that it can APPEAR to benefit the 10% of rural consumers with a gripe. That's how government works, on its better days.
Now, if only we could apply that brilliance to our most important and personal health decisions...
[sarcasm]

Jul 31, 09 - 06:36 pm Comment from: Road Warrior

Nice to see some people bringing out the rural vs. urban configuration. I used to live in a place so remote there was no TV (unless you got satelite) and get this, no radio (although I could pick up one station during the winter when the signal traveled better).

I had a hard line phone line, using dialup for the internet.

No lights, no sirens, no hustle and bustle, clean air and the silence of peace.

I loved it.

Jul 31, 09 - 08:56 pm Comment from: DogGone

@ Predrag

Thanks for reminding everyone what the investigation was about.

It makes sense to me that in those situations you describe where the vendor with an exclusive deal does not operate, the phone maker must offer the phone to the local mobile company.

However if the local company does not offer the same type of mobile service (GSM etc) then the phone maker is not oblige to manufacture a new model to suit.

Others here have discussed the backwardness of the mobile phone situation in the US. I would like the FCC to look into that as well.

Jul 31, 09 - 10:53 pm Comment from: MacSmiley

Well, to be honest, if the FCC is able to force Apple to sell the iPhone to every other carrier, I'm sure Apple would be delighted!

So would I.

Aug 01, 09 - 03:33 am Comment from: stucktrader

i would get an iPhone... if AT&Ts;plans were competitive with my carrier...

i can even get a 25% discount through the corporation i work for and another carrier still has a better deal...

it's not Apple's fault... but i sure would love to have an iPhone with the carrier that best supports my area...

Aug 01, 09 - 03:57 am Comment from: montex

Hooray! Political flame wars - I just luv them. Can we start by saying Democrats want to kill old people? 'Cause that's my favorite!

Aug 01, 09 - 10:53 am Comment from: Predrag

..."if the FCC is able to force Apple to sell the iPhone to every other carrier, I'm sure Apple would be delighted!"

Nothing prevented Apple to offer the iPhone on ALL carriers in the US (and definitely not any FCC rules). Apple CHOSE to enter into exclusionary agreement with AT&T because that provided them with best possible way to sell the device. I honestly don't see the reason for them to consider not extending that agreement any time soon -- it's working extremely well for them.

Original Jake:

FCC is NOT the Senate (nor the Congress). They usually work in less political way (much like the FAA, FDA or other similar agencies). They CAN fall under somewhat limited influence of industry lobbies, but these are definitely NOT politically motivated. And this case seems to be rather simple: where a device that's exclusive to a carrier cannot be obtained in an area served by a local/regional carrier due to that exclusive contract, the device maker is allowed to make that device available to that local/regional carrier (provided that the carrier's network can support the device as is, i.e. CDMA <-> GSM).

FCC may take a long time to do this, but I'd be surprised if they end up doing some favours to some influential senators or congressmen.

Aug 01, 09 - 12:03 pm Comment from: BC Kelly

"Hey Beavis, heh heh, he said iPhone probe, heh heh"

Aug 01, 09 - 01:44 pm Comment from: BC Kelly

"You Dumb Ass"

(whap)

"Is that FCC thing, not some new App for Proctologists"

ohh



BC

Aug 01, 09 - 05:04 pm Comment from: jfort

bizlaw says: No one has a right to an iPhone or any cell phone. And the US is a big place with most of it's population concentrated in larger cities. Companies gave the right to decide not to provide services to an area if they don't believe they can make money there.

My problem with that is that the radio frequency spectrum belongs to the public and the government has allowed companies to cherry-pick where they have service. Result, we have terrible to no coverage in places like where I am, NW Ohio. If we had thought this way in the past we probably wouldn't have electricity yet. Cell and high speed internet coverage are just as essential as electricity. Until the government thinks that way we will continue to be a third world country in this aspect.

Aug 01, 09 - 07:26 pm Comment from: Jill

What did Republicans ever do that was so bad???? They promote free markets and US constitution. Democrats and fake Republicans want to grab as much power as they possibly can and ruin the US. Never vote for a Democrat.

Aug 03, 09 - 07:06 pm Comment from: dave

The government sold off the frequencies that cell companies use, maybe the FCC doesn't have any jurisdiction anymore

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