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Rural wireless companies tell FCC to unlock phones

Japanese cellphone giant NTT Docomo said last week it will begin to offer unlocked phones to its customers next spring, a move that has rural U.S. wireless carriers asking the Federal Communications Commission to look to Japan and follow suit.

Starting April 2011, NTT Docomo said it will preinstall its phones in Japan with software that will unlock the device upon request. According to CNET Asia, the move stemmed from a call by Japan's Ministry of Internal Affairs and Communications to unlock handsets in order to give consumers more choices.

The FCC is investigating whether exclusive handset deals are anticompetitive. Apple’s iPhone runs only on AT&T’s network. The Palm Pre is exclusive to Sprint Nextel. But the agency hasn’t moved on the issue in months except to say they are looking into it.

“I strongly urge the FCC to take similar pro-consumer action,” Rural Cellular Association President Steven K. Berry wrote in a letter to the agency. “Doesn’t the American consumer deserve a similar freedom to choose the carrier and handset they desire?”

The rural wireless trade group has been lobbying for the agency to break open the handset market, where carriers take on marketing costs for manufacturers and offer other incentives to attract the sleekest and most-desired new gadgets. They say smaller carriers aren’t able to strike the same deals with manufacturers, which makes it difficult for them to attract customers who demand the latest Blackberry, iPhone, or HTC EVO.

This issue, which has been debated on Capitol Hill and previously by the FCC, is one that is heavily fought from all sides and hasn’t budged in years. But it’s also among the top telecom policy issues for consumers.

One of the most frequent questions I get from readers is: "When can I get such and such phone on such and such network." Not: "Have AT&T and Google come to terms on a reasonable network management standard?" Not: "Will the bill in the House consider opt-in standards for privacy with location based services?"

The issue has a potentially impact on the bottom lines of wireless carriers, as well. Rumors of the iPhone going to Verizon, for example, have sent AT&T’s stock lower and Verizon’s higher.

By Cecilia Kang  |  July 15, 2010; 8:00 AM ET
Categories:  FCC  
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