While the AT&T and iPhone combination seems to dominate the smart-phone market, the Justice Department has begun to cast dubious looks on the pairing. AT&T, as the sole U.S. distributor of Apple's idolized handset, has enough control to intimidate competitors and consumers with its policy of only selling phones with an attached service contract. Exclusive cell-phone deals like this have already spurred the early stages of antitrust investigations against companies like AT&T and Verizon. For consumers, the move is definitely encouraging. But more fundamental and concerning than controversies over high-end smart-phones is another issue that deserves greater attention: service contracts that only allow the use of phones sold by the service provider.
You don't realize how expensive your contract-bundled handset is until you lose it. Whether it waltzed down your toilet or got picked up by an uninvited party guest, it's gone and you are stuck midway through your two-year contract. As a normal human being you're obliged to get a new one even though the dumbest model soars well above $150.
Can't I just get an unlocked phone for 50 bucks and have you activate it for me?"" you may ask your cell-phone company.
""I'm sorry, but you need to get a phone that says Verizon on it,"" they respond.
Well, then, so much for that $30 Nokia 2601. Guess it'll have to be the $160 Nokia 2601-Verizon. That hundred-dollar extra word means the phone includes CDMA technology, which few other telecom companies use. Since Verizon's wireless service is based on this exact networking technology, to use Verizon's service you have to buy their exclusive CDMA phones with special R-UIM cards instead of the common SIM cards. The bundled sale of service and handset, when pictured in the daily scenario of phone contracts, should be a valid antitrust case. Why can't I just buy whatever phone I prefer and pair it with whichever telecom network I trust? In China, the largest telecommunication market with 600 million users, that's what people are accustomed to. The supposedly most advanced wireless service market, the U.S., has never heard of deals like that.
As a hotbed for free-market advocates, America has long been reluctant to wield governmental influence over its economy. That's probably why Microsoft took its heaviest antitrust blow not from home but from the European Union after selling its operating system bundled with Internet Explorer. However, there's one thing those advocates rarely mention: While government regulation interferes with the free market, so could technology. Verizon's exclusive networking trick, for instance, strips its consumers of free choices. Government intervention, such as antitrust inspection, might help to bring the market to a more balanced state where both suppliers and consumers are allowed more leeway.
I've experienced getting my phone stolen, followed by a huge new phone payment knocking hard on my budget. I've seen people with the same story fumbling for help in online mobile phone communities. All the questions always lead to a frustrating ""no"" in terms of alternatives for consumers. With some initiative from the Justice Department, there finally comes a little hope to support the efforts of phone users. Hopefully that new scenario will get the opportunity to grow.
