FCC's Genachowski lays out concerns over exclusive handset deals

It's good to hear the FCC chairman is listening to the issues affecting the telecommunications industry. He definately needs to find out what tactics Verizon and AT&T use to get 2.6 million adds. They definately give the store away to get them. The little carriers cant do what they do. The ruling on exclusivity is going to be the most highly anticipated ruling in the United States. Apples Iphone - is a lock on competition and gives all the play and revenue to AT&T and Apple. He needs to wrestle this phone from them and give it to all the carriers. Mr.chairman - look at this example: Sprint has the Palm Pre - In 2010, Verizon claims it is getting it and maybe AT&T. Verizon has the Blackberry Storm and AT&T has the Iphone. How is it they can get the Palm Pre but Sprint can't get the Storm or Iphone? What is wrong with this arrangement - Mr.chairman? I shouldn't say this - The size of the four carriers should be capped. I am going to get a mouthful for this. I keep asking how much bigger do these carriers need to get??? We want the industry to be competitive and robust. The way things are looking - It looks good for the top four carriers..It remains to be seen...

This is yet another example of the many needless, market-distorting intrusions that seem to be central to the mission of the current administration, all under the guise of "protecting" the consumer.

Instead, efforts such as these simply transfer power from individuals (buyers and sellers) to the political class, slowing innovation and shifting resources to investing in payments to lobbyists (including trade groups such as CTIA) and the campaigns of incumbents.

The exclusivity at issue here is one tactic that finances innovation, and the success of the iPhone has driven other players to focus resources on competing to offer a better product + service than Apple (with their apps store) and AT&T.

The question isn't, How do we make it possible for everyone to own an iPhone? Rather, it's, How do we ensure that buyers have a steady stream of innovation in product/service, price, channel, and the like? I know of no industry in which greater government interference has led to greater innovation and lower prices.

The role of the FCC here? Stay out. Allow these multi-billion dollar companies to battle it out and respond to the market without limit.

We are not giving our telecommunications decisions soley to Verizon and AT&T. They are not the voice of our telecommunications ecosystem here in the United States. How much more do we have to give them before they make all the decisions for the industry and leave the rest of the competitors silenced??? They are part of a bigger picture. It's seems like all the business at the FCC is about them. I don't suscribe to this....one...bit!!! This is two titans against a bunch of Goliath's. Where do they fit in??? We like the fact that people like to dance around the problem....It's not about government intervention nor inteference. It is about two carriers increasing in size, market share, power, decision making, stifling competition, preventing other carriers of what ever it the want to prevent them from, and downright deceptive advertising. That is the beginning. There is a laundry list more!!! That governing body needs to straighten out these two hijackers!!!!

There are two areas of confusion here:

(1) The number of competitors in large, very capital-intensive industries always trends toward a small number. This is true in everything from large commercial aircraft to autos, investment banking, credit card companies, overnight package delivery, internet search, and many others.

There are niche players, of course. In this case they're regional providers. Also, there have been efforts at business model innovation by breaking up the value chain. In this case, these are MVNOs, but as we've seen, these have not as yet emerged as major players here in the States.

(2) The nature of competition in such industries is brutal and can appear to the faint of heart as unfair. Unsurprisingly, small players and start-ups have a very difficult time of it since they don't have the bargaining power of the large players. This is based on microeconomics.

There best chance is when there is technological disruption, or when large players atrophy and stop innovating.

"We" aren't "giving" anything to these or others. Individuals may, however, choose to buy products or services from them or not.

If there is evidence of collusion or price fixing, the evidence behind those charges should be presented.

Otherwise, appeals for regulatory intervention by free market opponents are simply investments by special interest groups to generate revenue from fundraising appeals and increase their influence among the political class. For businesses, such appeals are designed to distort outcomes in their favor. For business associations and their lobbyists, regulatory fights give trade groups powerful reasons for their members to continue to pay ever-higher dues.

All of this is a dead-weight drain that raises total costs, slows innovation, and limits consumer choice.

You views represent the "common" understanding of the Cellular industry. There are several points you should understand in regards to the US, US carriers, and "locked" devices. First point is a device designed to work on Verizon or Sprint style CDMA technology based networks will never work on a TMobile, AT&T, Vodafone or any other GSM technology based network. The manufacturers such as RIM, Apple, HTC, and LG have to manufacture devices in two styles to support CDMA and GSM and cost are high. When Apple decided to develop the iPhone they chosse GSM technology which is used in netwroks 10 tenfold over CDMA which is pretty much limited to the US the rest of the world is on GSM. Second the manufacturers have to get carrier agreements called subsidies to make the devices affordable from the end users. You can buy an iPhone without a contract but no one wants to pay the $599 for a handset. In regards to exclusive offers on devices these usually run for a set amount of time and then the devices can be offered by the other carriers. Keep in mind RIM and Palm have to submit to extensive testing on these these networks to insure they perform across all of their network in every area.Third and final point in regards to capping the size of the carriers; are they to big? Hard to say. They have however each spent many billions of dollars to build and maintain their networks to provide coverage and service. As long as there are two network technologies used in the US market there will be no buy one device to work anywhere offered. Keep in mind the average handset price is subsidized by the carrier by well over 60%. How can you legislate that Apple has to re-engineer the iPhone to work on Verizon and Sprint "US" CDMA networks (350 million worldwide versus 3.2 Billion GSM users worldwide)just so one of their users can get an iPhone?? If you want one change carriers and don't waste taxpayer dollars studying this point because it is good "we all hate them" politics.