June 19, 2009 / 4:02 PM / 10 years ago

FCC chair-designate to look at mobile handset deals

WASHINGTON (Reuters) - President Barack Obama’s choice to head the Federal Communications Commission plans to review the exclusive arrangements between wireless carriers and cell phone makers.

A customer looks over the Apple iPhone 3GS at the company's retail store in San Francisco, California June 19, 2009. REUTERS/Robert Galbraith

The issue of exclusive agreements among some of the biggest companies like Apple Inc’s iPhone and service provider AT&T Inc is at the center of some lawmakers’ concerns about whether such practices hinder competition and innovation.

According to a copy of the written responses to questions from Senate John Kerry obtained by Reuters on Friday, Julius Genachowski said he will focus on promoting competition and consumer choice.

Kerry, a Massachusetts Democrat, and three other members of the Senate Commerce Committee wrote a letter earlier this week asking the FCC to examine the issue carefully and act “expeditiously” if officials find that the exclusivity agreements unfairly restrict consumer choice or competition.

The senators’ letter was sent on the heals of a petition filed by the Rural Cellular Association (RCA), which represents more than 80 rural wireless providers. The group urged the FCC to look into how the arrangements affect consumers.

“Yes, if confirmed, I will ensure that the full record on the RCA petition is reviewed, and act accordingly to promote competition and consumer choice,” Genachowski said wrote.

His response was related his confirmation hearing held on Tuesday by the full committee, in which committee members were given additional opportunity to present Genachowski with written questions that were not asked during the hearing.

The senators’ June 15 letter was signed by Democrats Kerry, chairman of the Senate Commerce Subcommittee on Communications, Technology, and the Internet; Byron Dorgan of North Dakota and Amy Klobuchar of Minnesota as well as Republican Roger Wicker of Mississippi.

The senators want to know if such agreements were becoming prevalent, limiting consumers’ ability to take full advantage of handset technologies, manipulating the competitive marketplace between commercial wireless carriers, and playing a role in discouraging innovation.

Genachowski’s comments reflect similar comments made by Acting FCC Chairman Michael Copps who said Thursday that the commission should open a proceeding to closely examine the those arrangements.

Copps, a Democrat, said that he has asked officials to begin crafting such a proceeding to examine the effects on consumer choice and innovation.

“I am pleased by Acting Chairman Copps’ announcement, and look forward to the learning the results of the FCC’s proceeding,” Klobuchar said in a statement.

We’ve heard concerns about competition-related issues in the wireless marketplace, such as exclusive contracts between handset manufacturers and the largest wireless companies, and we need to make sure consumers are getting a fair deal,” she said.

Consumer groups welcomed the recent remarks.

“The path to innovation is paved by openness, and unlocking devices is a good start, said Ben Scott, policy director at Free Press, a consumer watchdog.

The Commerce Committee Thursday overwhelmingly voted in support of Genachowski, a law school friend of Obama and technology industry executive, to chair the five-member FCC commission.

Reporting by John Poirier

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