Posted by: Stephen Wildstrom on June 15, 2009
People who love the iPhone and hate AT&T may get a chance to do some vicarious venting on Wednesday when the communications subcommittee of the Senate Commerce Committee convenes a hearing that will examine whether exclusivity agreements, like the one that binds the iPhone to AT&T, harm consumers. On June 15, four senators—subcommittee Chair John Kerry (D-Mass.), and members Roger Wicker (R-Miss.), Amy Klobuchar (D-Minn.), and Byron Dorgan (D-N.D.) wrote to acting FCC Chair Michael Copps to consider the issue when dealing with a challenge to exclusivity from the Rural Cellular Assn.
The problem that the senators, as well as the vocal critics of the ATT-Apple arrangement overlook, is that AT&T’s iPhone exclusive is technical as well as contractual, at least in the U.S. The four leading U.S. carriers split into two technology camps. Verizon and Sprint (excluding Nextel, which relies an oddball system all its own)run CDMA networks based on technology developed by Qualcomm. AT&T and T-Mobile use the GSM technology standard in Europe and most of the rest of the world. The two systems are completely incompatible at the radio level. And while T-Mo and AT&T use the same basic technology, they offer 3G service on different frequencies.
So the bottom line is that even if Congress were to outlaw exclusivity arrangements, the lawmakers couldn’t make the iPhone work properly on anyone’s U.S. network but AT&T’s and they can’t order Apple to produce a compatible it doesn’t want to make. The best thing that could come out of an exclusivity ban would be an iPhone that would sort of limp along on the T-Mo network, plus perhaps the availability of the iPhone on some tiny rural carriers.
Actually, the most interesting result of an end to exclusivity—which seems highly unlikely anyway—would be that Palm would be forced to make its new Pre available to Verizon, something it is not planning to do until next year.