Free the iPhone!?

Businessweek reports that a coalition of special-interest groups, otherwise known as consumer advocates, is hard at work to persuade the federal government to outlaw the exclusive deals that lock a specifc mobile phone to a single carrier's cellular network. Such deals mean, for example, that buyers of an Apple iPhone are only authorized to use the device on AT&T's cellular network, though of course some number of users "jailbreak" their iPhones and use it on another network. According to the Businessweek story, the coalition includes Consumers Union, the New America Foundation, the Electronic Frontier Foundation, software provider Mozilla and a pair of small wireless carriers, MetroPCS and Leap Wireless International, and allies like the Rural Cellular Association. Their argument is that such exclusive arrangements are anti-competitive and limit consumer choice. They've vowed to work to persuade the Federal Communications Commission, the Copyright Office, the Federal Trade Commission, and, of course, Congress to ban these kinds of deals. software deals. The analogy these advocates offer is that of a desktop or laptop computer: users can connect their PC or Mac to the Internet over anyone's network. Therefore, they should be able to do the same with what is, after all, a mobile computer. And they're not stopping there: they also object, according to the story, to Apple's insistence that iPhone applications be bought and downloaded from the company's online App Store. This, too, is anti-competitive and limits consumer choice. The FCC last year asked for comments on this exclusivity issue. In February, the Rural Cellular Association filed its comments, arguing among other things that "Exclusive deals do not promote innovation in the handset device market." The federal Copyright Office is getting into the act, according to Businessweek. "This year, it will review whether to extend a ruling that made unlocking cell phones—essentially, making them work on a network for which they are not intended—legal." The coalition of special interests want that ruling renewed and want the agency to allow jailbreaking -- allowing cell phones to run software that the owner's chose. In various comments or filings, Apple, AT&T and Research in Motion have all argued that the current arrangements do in fact encourage innovation and competition. Personally, I'm unpersuaded by these arguments. Every purchase choice a consumer is a self-limiting decision, and by definition limits subsequent choices. That's a question of trade-offs, and people value those trade-offs in different ways. The argument that exclusive deals limits innovation seems hard to justify. The innovations that Apple and to some degree AT&T introduced with the iPhone are plain to see. As are the responses by their rivals. What do you think? Take our poll and join in the comments.

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