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FCC To Probe Cellular Handset Exclusives

6/19/2009 02:27:00 PM Eastern

Washington — The Federal Communications Commission (FCC) will investigate whether competition and consumers are harmed by a commonplace practice in which the largest cellular carriers get exclusive access to popular handsets, FCC interim chairman Michael Copps said.

The commission “should determine whether some of these arrangements adversely restrict consumer choice or harm the development of innovative devices,” Copps said. If the commission finds harm, “it should take appropriate action,” he said. The investigation will be handled by the FCC’s bureau on competition.

A year ago, when the FCC was dominated by Republicans, rural carriers complained to the FCC that the exclusive deals put them at a competitive disadvantage because they couldn’t offer the most desirable handsets, such as the iPhone or Palm Pre, to current and potential future subscribers.

Recently, the Senate held a hearing on the practice. Four senators sent a letter to Copps urging FCC action on the rural carriers’ complaint. And Julius Genachowski, the president’s nominee to chair the FCC, said he would review the complaints if confirmed.