Posted by: Olga Kharif on July 8, 2009
Today, AT&T fired back at allegations of anti-competitive conduct. As you’ll recall, in a July 6 letter sent to the Department of Justice and the Federal Communications Commission, Sen. Herb Kohl (D-Wis.) expressed his concerns over the state of competition in the telecom marketplace. “It is vitally important that the FCC and the Justice Dept. take action to enhance competition in this market and to remove barriers to competition preventing the emergence of new competitors,” he wrote.
In a July 8 response, AT&T’s executive vice president James Cicconi explains why Kohl’s allegations are off the mark. Many of his arguments are valid points; others, however, don’t quite add up. An example: Kohl alleges that exclusive handset arrangements between carriers and device manufacturers may be endangering competition. Cicconi notes that, in the U.S., where exclusive handset agreements are common, consumers have access to 630 different handsets and mobile devices. U.K. consumers only have access to 147 mobile gadgets. From that, he draws this conclusion: “Prohibiting exclusive handset arrangements, then, would not engender competition; it would degrade it,” the AT&T letter claims.
This argument has one flaw: U.K. carriers strike exclusive handset deals, also. The iPhone, for instance, is only available fromcarrier O2. It would have been much better to compare the U.S. to France or Germany, both of which, in effect, sidestep exclusive arrangements.
It seems to me that what's lacking is good data that would compare apples to apples and shed light on the handset exclusivity issue. Congress and the wireless industry need to order extensive studies of the deals' impact on consumers and market dynamics.