Friday, July 31, 2009, 01:55 pm

FCC to investigate markets where iPhone is not available

By Sam Oliver

While it surveys exclusive contracts like the relationship between AT&T and Apple, the Federal Communications Commission will also look into concerns that customers in rural areas can't access limited products like the iPhone.

The U.S. government regulatory agency will investigate smaller markets where major wireless carriers like AT&T and Sprint, which carry the iPhone and Palm Pre, respectively, do not provide service, according to Bloomberg.

"There are markets in the country where if you wanted an iPhone, if you wanted a Pre, you just couldn’t get it -- from anyone," said Julius Genachowski, chairman of the Federal Communications Commission."So one question is, is that consistent with broad consumer interests?"

The FCC was asked in June by four U.S. Senators to look into exclusive contracts like the one between AT&T and Apple, or the agreement between Sprint and Palm for the Pre. Genachoswki said his main focus as the head of the FCC is to promote competition in the best interest of consumers. The request came from a petition filed by the Rural Cellular Association, a group of smaller tier II and tier III wireless carriers that provide service to parts of the U.S. where tier I brands like AT&T, Verizon, Sprint and T-Mobile do not.

In response to government interest, Verizon recently agreed to unlock some exclusive phones for use on smaller wireless carriers in rural areas.

The Rural Cellular Association has argued that their inability to provide their customers with some of the most popular mobile handsets and smartphones makes it difficult for them to compete, especially in markets where their coverage does overlap with some of the big tier I operators.

In their letter to the FCC, the senators asked the commission to examine five specific issues carefully and act expeditiously should they find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace. It was signed by senators John Kerry (D, Mass.), Roger Wicker (R, Miss.), Amy Klobuchar (D, Minn.) and Byron Dorgan (D, N.D.)

They requested a determination on whether exclusivity agreements are becoming increasingly prevalent between dominant wireless carriers and handset manufacturers, and whether these agreements are restricting consumer choice, particularly for those living in rural America.

The senators also asked the commission to decide whether the agreements place limitations on a consumer’s ability to take full advantage of handset technologies, such as the ability to send multimedia messages (MMS) or the ability to "tether" a device to a computer for internet use.