wont some phones still not work with other networks by design?

Finally!!

You really don't get it do you? In exchange for exclusivity these companies (Apple, Palm, Blackberry) get money towards development of the new phone.

If anything this will potentially stifle innovation because companies will be less likely to dump as much of their own money into a phone...

Not necessarily, as many cell phone manufacturers make both CDMA and GSM versions of their phones. I would LOVE to see all phones starting to come unlocked instead of a choice few.

I figured most exclusivity deals were natural outcomes due to the differing technologies employed by the networks. Would manufactures be forced to make the same phone 4 times so that they all worked on all networks? As much as I'd love for verizon to get some more phones this doesn't make much sense.

There's no question -- these linkages are anti-competitive. Congress should take action.

As SSJ stated above, there are two major network technologies, CDMA and GSM. Most phones are already made for both technologies. Remember, just because the iPhone is AT&T only in the U.S., different carriers have the exclusivety in other nations, and they probably don't use the same exact network technology.

Look at BlackBerry, they've been available for every network forever. Look at the Motorola Razr, name a company that didn't offer a Razr at some point. Look at every "free with new plan" Nokia or Samsung. Obviously cell phone companies are more than capable of making phones for every and any carrier out there.

Exclusivity agreements are about one thing, profit. When companies consipire to limit consumer freedom for profit, then it becomes a matter for the government. There's no proof that's what is happening here, but that's why the FCC has been asked to look into this.

here in brazil, all phones must be unlocked since last year, prices have dropped a lot.

Congress should take action

Disagree. Every time Uncle Sam gets involved in business, it backfires. Let the markets choose what to do. You and I ("consumers" or "demand") are a better gauge for what should be bought/sold than a group of Harvard lawyers posing as this nation's "leaders."

You really don't get it do you? These companies make billions. You really think it costs $500 for some dude in china to make an iPhone? NO! These companies are insanely rich and if you really think they NEED that money for "innovation" then you are the one that doesn't really get it.
THIS IS A GOOD THING! CELL PHONE MAKERS AND COMPANIES CAN GO F* THEMSELVES!!

Given that the top end smart phones from every carrier all, aside from the iPhone and its restrictions, have almost identical feature sets I need to think that this looks more like a case of federal employees trying to look busy than a genuine concern for voter's rights.

I'll be the first in line to condemn US carriers for bizarrely high usage costs and needlessly binding contracts, but I don't see how the availability of a luxury affects US voters.

i think the government should spend more time looking into antitrust related things for Apple, with their "only our software, on only our hardware" marketing.

Chipruck, I don't think you get it. A company may put forth a bunch of money to help design a new phone, but it's the network that suffers. Take a look at the iPhone. The iPhone is one of the most advanced phones in the US...and it's on one of the slowest networks (if I remember correctly, the slowest). Having a diversity in phones is all well and good, but as cameras get bigger and songs become less compressed (not including business applications here), the real problem isn't having a cool exclusive phone, it's having a crappy wireless network. If all phones were offered by all carriers, the carriers would have to single themselves out by upgrading their network. I don't know about anyone else, but I'd rather have a fast, reliable network than a flashy phone that does way more than I need it to.

Anyone here ever purchased an unlocked phone? Anyone?

The Iphone is like a drug. Once you get it, you are hooked. It’s too late by the time you realize that the “dealer” (ATT) and the “maker” (Apple) have you on hook. There is a monopoly here. Apple just needs to realize that other dealers offer better services. As much as I hate anything gov since it’s so inefficient and restrictive, I agree in this case ATT and Apple need their cages rattled by the gov. And yes, I hear the people that say “get a life”, it’s a toy, you don’t need this for a phone. But there is a sense of injustice here and if the gov can at least get the wheels spinning on change I am for it.

It's about time they tried to do something about it!

I am not exactly sure about how I feel about this or rather I don't think there is a major issue regarding this that requires stepping in.

I wonder how many of the readers here know that in Europe, you buy the phone first, then the SIM card of the provider of choice. Paying for texting is practically unheard of in Europe.

You don't seem to get it either then. In some other countries around the world, like China, the public is able to first choose they're phone and then their carrier. This leads to the telecomm companies fighter harder for your money, resulting in better plans for the mass consumer. Interesting the big bad communist China seems to be ahead on the capitalist curve when it comes to cell phones.

texting costs nothing to the carrier.... did you know?

Here in Brazil we have a law stating that if the user wants he can unlock his/her phone even if s/he are on a contract.. With that, most phones did drop in price, but if you wish to buy an unlocked iPhone you will have to spend around $1200 to get it.. What's happening with the price? Well, that's the Brazilian cost..

It's hard not to laugh at some of the comments defending exclusive agreements. Man, if only those people knew what is going on in the world around them. The US has probably the worst quality (who in Europe heard of 'dropped calls' - raise your hands) and inefficient cell networks yet people pay highest prices for the service. On top of that, the freedom of choice of the devices to use (freedom which Americans value so much!) is severely restricted, much more than elsewhere in the world. How on earth one could defend that? I'm also glad that government is doing sth about it, because it p....es me off ever since I came to the US (3y ago). To those that oppose the idea: do your research how it works elsewhere and make your gov do the right thing: don't let the corporations rip you off, and make you think it's good for you at the same time!

These agreements hark back to pre-internet days when the big phone companies would have told you an internet that wasn't exclusively theirs would stifle innovation.

YEAH RIGHT...

These monopolies have their boot on the economy's neck.

Part of having true net neutrality means NO MORE PROPRIETARY PHONE NETWORKS with LOCKED DEVICES.

The more open the standards are, the more competition there will be and by far the more innovation.

So open it up, guys...

The government should keep its nose out of this. This is almost as bad as the EU's attitude toward Windows. Where was the government when all the movie studios were going Blu Ray exclusive? Why aren't video game developers forced to put their games out for all the major consoles? It's not fair, I say! Why shouldn't we encourage the phone companies to level the playing field themselves? iphone exclusivity has done nothing but good things for the wireless industry.

If the government levels the playing field, then Verizon, Sprint, and T-Mobile won't be half as interested in sinking a large amount of capital into funding new competitive phones from companies like RIM, Palm, and HTC. Apple's iphone would truly monopolize the smart phone market.

This isn't about choice, or a competitive market, it's about everybody wanting everything on their own terms.

Verizon didn't have the RAZR when it came out and didn't for a few years... and no, the rest of the world is on GSM and has been for a long time. AT&T/Cingular only made the switch early this decade.

An unlocked iPhone works on every major carrier in the EU and UK.

Somebodies mad that they can't afford an iPhone... by the way, recent estimates had the iPhone 3g at $179 and change to actually make. Given they have stores, advertising, manpower etc to pay for they might be making $100/iPhone.

And I know this is tough to grasp, but they spend hundreds of millions of dollars on R&D into some of the cutting edge phones. Last I checked you didn't have to buy the big fancy phone, you could get the cheap one... you know, the one that makes phone calls.

And stop with the exaggeration on profits. Outside of RIM and maybe Nokia most of the cell phone companies are highly diversified and only a small percentage of their income comes from cell phone sales.

Answer me this: why would a company be MORE likely to innovate on a new phone when they have to foot the entire bill rather than part of it being funded by AT&T (iPhone?)

Which has nothing to do with Congress looking into exclusive phones. If I don't like AT&T's speed then I go to Verizon or Sprint... not rocket science people. If they don't have the phone I want then I have to make a choice, phone or network. Your choice and your dollars communicate to the company what you prefer. The government isn't going to save us people, we have to save ourselves.

Yes and they don't have a contract usually and if they do, they still buy prepaid values and with people paying 24 cents a minute to call that cell phone your prepaid amounts run out pretty quickly.

Try doing business with people in the EU, I do it on a daily basis. They freak out (not literally) when you ask them to call your mobile. They think it's going to cost a ton more. You guys want to go with that system? 10 minute phone call a day with your girl/boy friend and you'd be running over a $60 bill... and that's without internet access and calling your mom.

Phone companies are already charging too much for the service they provide. And frankly, I don't see much of a return for the money I shell out. $15 for texting... which is FREE for the provider!? That's outrageous!!! Then there's required packages just to USE your phone's technology... random (non-governmental) fees... usage charges for things that cannot be disabled but are too easy to accidentally use (internet).

Think about it. Most phones still the internet option, both hardware and software, in the easiest to use location. If you AREN'T on an internet plan, this means you get utterly screwed unless you disable MMS too (as ATT so generally gave me the option to do).

Well I like the idea that they are looking into this. If you like being locked into one company by the phone you want then great for you. The companies always scream foul, when anything is done in the customer’s advantage. For the guys saying that new phone designs will be affected, get real look at the computer your working on now there is no money going into the design of those parts from exclusivity agreement with companies and it does not hurt the computer market it is doing get things for it and you the customer.

...so what you're saying is that I should pay higher costs to my carrier since they're going to be giving money to the cell phone makers ("to innovate new phones") while still trying to make the same sort of profits they've always made - correct?

Lets face it, the money from the carriers doesn't come from thin air, it comes from the bills of the people on the network. Charge more for the fancy phones, and less for the service, and simplify the whole system by cutting out the middle men involved in creating the exclusivity deal. I'd gladly pay more for a phone when I have the freedom to have it and it's services be non-branded, and be able to use it on any network.

Cheers,
CList

If you think exclusivity will limit innovation, that is 100% the opposite of the truth. The phones we get in the US (and other tech too, like cameras) are usually at least 9-18 months behind other countries such as Japan, Korea and elsewhere. Somehow "they" get the phones without the setup like we have here, often with more bells and whistles than we get even when a version of the phone does end up here. It just an excuse to continue down the same path. We should be able to just pay for a phone, which we own, then select a service WITHOUT a contract.

While you can sometimes do that here, you get no break on price. Buy an unlocked iphone for 600 bucks, you pay the same monthly rate as your buddy who paid 175.00 for the phone. The only consolation is you are not locked into a contract, but it saves you no money - in fact you pay more because you fronted the cost of the phone.

A good step would be to segregate the service for those who want a free phone (or discounted) and those who will just purchase a phone outright - after all they defend the higher rates by saying they are subsidizing the free phones - but if you pay for your phone, they do not cut your rate. If I pay full boat for my phone, give me a break on my rates. This will probably never happen unless mandated though.