Going to Court for iPhone Freedom

Just what is the cost of wireless service exclusivity on the iPhone?

Last Wednesday marked the first day in the hearing of the House Subcommittee on Telecommunications and the Internet, where representatives called for a more open wireless system. Both Democrats and Republicans spoke out against the hostage-type contracts, in what's been dubbed the "iPhone hearing."

Being discussed is the fact that the iPhone will only work on AT&T's network. The representatives claimed that this is a result of allowing carriers to exert almost complete control over the devices and services in the wireless sector.

New York Times blogger David Pogue believes that this has led the U.S. to fall behind other nations, calling American carriers "calcified, conservative and way behind their European and Asian counterparts." (Source: huffingtonpost.com)

"The iPhone highlights both the promise and the problems with the wireless industry today," said Chairman Ed Markey at the hearing. "On the one hand, it demonstrates the sheer brilliance and wizardry of wireless engineering. On the other hand, the advent of the iPhone raises questions about the fact that a consumer can't use this phone with other wireless carriers."

Legislative counsel Chris Murray also discussed the ramifications that are caused to consumers. He noted that early termination fees tend to lock in customers and serve as strict anti-competitive tools. He also called for a decrease in costs to consumers.

"We want lower consumer prices," Murray said when referring to the iPhone's $600 price tag. "Consumers don't get a single dime of subsidy on the new iPhone, but it'll still get them locked into a two-year deal or penalty to leave the carrier." (Source: arstechnica.com)

In May, Free Press, Consumers Union, Public Knowledge, Media Access Project and others requested that the FCC implement an "open access" model that included Net Neutrality conditions. This model would permit third parties to access networks as wholesalers and provide a variety of wireless service and access alternatives. Now that the open access supporters are being heard in court, things are beginning to look up for consumers.