10 Pages Posted: 16 Jun 2008
My colleague Barbara Esbin and I address a petition filed by the Rural Cellular Association (RCA) asking the FCC to prohibit exclusive arrangements between wireless handset producers and carriers. The RCA petition claims that large wireless companies have an unfair market advantage by giving their customers exclusive access to certain advanced smart phones, such as the Apple/AT&T iPhone - and that this anticompetitive practice is harmful to rural consumers served by RCA members.
We debunk RCA's arguments premised on a supposed lack of competition in wireless markets. We also explain the virtues - or at least, the practical necessity - of exclusivity: such arrangements ultimately benefit all consumers by allowing handset manufacturers (i) to fund expensive development efforts for new mobile products through revenue-sharing and (ii) to develop truly innovative devices by ensuring that new services function properly on the provider's network.
Keywords: FCC, iphone, communications, exclusive, progress and freedom foundation, handset, wireless, internet, apple, at&t, smart phone
Suggested Citation: Suggested Citation
Esbin, Barbara S. and Szoka, Berin Michael, Exclusive Handset Prohibitions: Should the FCC Kill the Goose that Laid the Golden iPhone?. Progress & Freedom Foundation Progress on Point Paper, Vol. 15, No. 8, 2008. Available at SSRN: https://ssrn.com/abstract=1144720