Hell of a Way to Get Out of Your AT&T Contract, Varney…
by John Paczkowski
Posted on July 6, 2009 at 12:15 PM PT
Earlier this year Christine Varney, the Justice Department’s new antitrust chief, said she planned to return the Department to a policy that led to landmark antitrust suits like the one against Microsoft (MSFT) in the ’90s. And she delivered on that promise in short order.
Since Varney’s confirmation in late April, the Department of Justice has seen a sort of Trustbuster renaissance. The DOJ has begun inquiring into potentially anticompetitive recruiting practices in Silicon Valley. It opened an investigation into the Google Books (GOOG) settlement. And now, the Department is scrutinizing cellphone exclusivity deals like the lucrative one between Apple (AAPL) and AT&T (T). Sources close to the DOJ tell The Wall Street Journal that the agency is probing such deals to see if they adversely restrict consumer choice or hamper competition.
The inquiry, which is in its very early stages, follows recent calls for the Federal Communications Commission to open a similar investigation, and it remains to be seen what, if anything, will come of it. For while exclusivity deals may undermine consumers, there’s little doubt that they benefit them as well. After all, AT&T’s iPhone deal with Apple scared the hell out the entire industry, forcing innovations in handsets and networks alike. Were it not for that deal, we might not be seeing the network improvements now occurring–the deployment of high-speed downlink packet access and long-term evolution, or LTE, networks, for example. And we almost certainly wouldn’t have devices like the Palm (PALM) Pre and the BlackBerry Storm.
Comments
The only iPhone that was exclusive to AT&T was the very first one. The iPhone 3G and iPhone 3GS are available from about 80 carriers and are also available unlocked if your carrier is not on the list. Even in the US you are free to buy an iPhone 3GS for about $600 and attach to T-Mobile.
The whining comes from the unfortunate fact that Verizon and Sprint cannot run global standard phones like the iPhone. So to make Verizon the 81st carrier, Apple has to build them a special Verizon-specific phone. To me, that is a much more outrageous crime than the fact that AT&T is the only carrier subsidizing the iPhone.
Posted by Fred Hamranhansenhansen at July 7th, 2009 at 1:43 pm