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May 21, 2008

Yesterday, the U.S. chapter of the RCA (Rural Cellular Association) filed a petition with the FCC asking it to investigate exclusive handset arrangements between wireless carriers and handset manufacturers.

The action was prompted by discouraged rural carrier companies that, according to their claims, are suffering unfair competition by larger rivals’ exclusive handset deals.

RCA, which represents about eighty small and rural wireless carriers that mostly serve fewer than 500,000 customers each, wrote "RCA requests that the commission initiate a rulemaking to investigate the widespread use and anticompetitive effects of exclusivity arrangements between commercial wireless carriers and handset manufacturers."

RCA added "and, as necessary, we will adopt rules that prohibit such arrangements when contrary to the public interest, consistent with our obligations under the Communications Act.”

The petition also cites exclusive handset deals between LG and Verizon Wireless, and Samsung and Sprint Nextel, saying exclusive handset arrangements create “another digital divide between urban and rural America.”

The association’s complaint comes at a time when wireless carriers are facing increasing pressure to open their networks, and to allow consumers more selection about what devices and applications they wish to use over their networks.

Citing the example of Apple’s deal with AT&T for the iPhone, RCA’s petition explains that the exclusive arrangement between the two means that most Vermont residents, as well as residents in rural areas of 15 other states, can’t use the popular handset as AT&T only offers roaming service in the state and local carriers cannot sell the iPhone.

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Source: The U.S. Rural Cellular Association.