FOR IMMEDIATE RELEASE: June 15, 2009
CONTACT: DC Press Office, 202-224-4159
WASHINGTON, D.C. – Senator John Kerry (D-Mass.), Chairman of the Commerce Subcommittee on Communications, Technology, and the Internet, along with Senators Roger Wicker (R-Miss.), Byron Dorgan (D-N.D.), and Amy Klobuchar (D-Minn.), all members of the Commerce Committee, today urged Federal Communications Commission (FCC) Commissioner Michael Copps to review the exclusive arrangements between wireless carriers and cell phone manufacturers.
The senators’ letter precedes a Commerce Committee hearing this week on the issues facing wireless customers. Currently, several commercial wireless carriers hold exclusive arrangements with handset manufactures with respect to which devices are available through their networks for consumers. “We ask that you examine this issue carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace,” the senators wrote.
The full text of the letter is below:
June 15, 2009
The Honorable Michael J. Copps
Acting Chairman
Offices of the Commissioners
Federal Communications Commission
445 12th Street, SW
Room 8B201
Washington, DC 20554
Dear Chairman Copps,
We write to express our concern regarding the use of exclusivity arrangements between commercial wireless carriers and handset manufacturers with respect to wireless handsets that are made available to consumers. On May 20th, 2008, a petition for rulemaking on this subject was filed by the Rural Cellular Association, and a number of comments were subsequently filed by small and large commercial wireless carriers, consumer groups, regulatory agencies and handset manufacturers. These comments detailed both the benefits served by these agreements to those entities in position to take advantage of them as well as the challenges they pose in terms of maximizing consumer choice and competition within the marketplace. As a result of this process, there is a comprehensive record on the subject of exclusivity agreements for study by the Commission.
Based on this record, we ask that you examine this issue carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace. We ask that you consider the following factors in making this determination:
· Whether exclusivity agreements are becoming increasingly prevalent between dominant wireless carriers and handset manufacturers;
· Whether exclusivity agreements are restricting consumer choice with respect to which handsets are available depending on a consumer’s geographic region, particularly for consumers living in rural America;
· Whether exclusivity agreements place limitations on a consumer’s ability to take full advantage of handset technologies, such as the ability to send multimedia messages or the ability to “tether” a device to a computer for internet use;
· Whether exclusivity agreements are manipulating the competitive marketplace between commercial wireless carriers. Specifically, whether the ability for a dominant carrier to reach an exclusive agreement with a handset manufacturer is inhibiting the ability of smaller, more regional carriers to compete; and
· Whether exclusivity agreements play a role in encouraging or discouraging innovation within the handset marketplace.
The Senate Committee on Commerce, Science and Transportation will convene a hearing this week to examine issues confronting wireless consumers. The subject of exclusivity agreements between wireless carriers and handset manufacturers will be a focal point of this hearing, and the record will help to determine whether legislative action is also necessary. We look forward to your continued attention to this issue, and to a swift examination into the impact of exclusive agreements on the wireless marketplace.
Sincerely,
John F. Kerry Roger F. Wicker
Byron L. Dorgan Amy Klobuchar