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This can't end well. At the end of the day, Apple and AT&T have the right (or should have the right) to make any agreements they find necessary, and customers

by tc 17y ago

This can't end well. At the end of the day, Apple and AT&T have the right (or should have the right) to make any agreements they find necessary, and customers obviously have the power to reject the iPhone and AT&T if this matters enough to them. The government gets involved when consumers want to have their cake and eat it too -- you want the iPhone Apple & AT&T are offering BUT you aren't willing to accept their price and terms. I know this isn't going to be a terribly popular point here, because, well, we all do want to get our way. But just consider how much you'd like to find yourself on the receiving end of one of these letters.

neilk 17y ago
Not necessarily. Some of the FCC's questions are simply about clarifying policies. Maybe the average consumer won't read through (or care about) a list of prohibited app or app categories, but it sure would help developers.
- tc 17y ago
  That's nice and all, but no one is forcing developers to support Apple and AT&T either. Apple was never really thrilled with the idea of having third-party developers. Let's not be too patronizing to AppStore developers -- they all knew (or should have known) what they were getting into. Apple's agreement has always put developers at their mercy.
  - bonaldi 17y ago
    No one is forcing Apple to develop for public airwaves, either.
    - tc 17y ago
      Would we really be any better off if they never had? Even considering the App Store policies which are objectionable to some?
jwhitlark 17y ago
Not true. AT&T does not own the spectrum they use, it is a publicly owned natural resource, licensed to them under specific rules, and can be revoked by the FCC for failing to comply with the regulations. The government is not getting involved because people want to have their cake and eat it to, (although that is a pretty good default assumption), but because there appears to be collusion involving regulated resources.
- tc 17y ago
  You are being over-broad with the scary word collusion. Collusion would be AT&T, Sprint, T-Mobile, Verizon, etc. agreeing to keep voice revenues for the industry high by crippling mobile data. Nothing in a carrier's agreement with a handset vendor could possibly qualify for collusion. As for violating regulations, please find for me the regulation that they have violated. It seems to me that their present sin consists of doing something unpopular.
  - boryas 17y ago
    This is a valid point, but I'm not convinced that it's OK for companies to act/co-operate in a way that is this detrimental to their customers just because they aren't supposed to be competitors. Based on the questions asked, the FCC seems to be trying to find out if this exclusivity agreement is harming consumers or not, which seems like a decent goal. If this inquiry leads to some transparency from Apple/AT&T, so much the better, right?
    - rottencupcakes 17y ago
      No! You can't think like that. Apple and AT&T should have every right to be as opaque as they want. If you don't support their policies and pricing, switch to another carrier and buy another phone. In a completely non-monopolistic scenario, which this is, the government should have no concern whether a company's action's harm customers or not, since the customer has complete choice in whether to buy the service or not. This is precisely a situation in which the customer wants to have his cake and eat it too. Regulated resources are by definition a case when the customer wants to have his cake and eat it too.
antonovka 17y ago
This can't end well. At the end of the day, Apple and AT&T have the right (or should have the right) to make any agreements they find necessary ... So can I have the right to broadcast my own GSM signal in the 900 MHz range, or a perpetual sweet-heart franchise agreement with my local municipal government to run last-mile internet to my neighborhood's houses? These are natural monopolies we're dealing with. My options are constrained to carriers that have been granted guaranteed access to public airwaves by the FCC. The carriers then use technical (carrier locks), legal (contracts), and social (difficult cancellation processes) means to lock consumers in. The carriers then collude with handset makers to restrict consumer choice further by locking handset features, and restricting the applications that they run. There are ways around this (such as buying third party unlocked, unrestricted phones), but carriers and handset makers leverage their government-backed market position to discourage consumer adoption.
- tc 17y ago
  These are natural monopolies we're dealing with. There is nothing natural about a monopoly (or in this case, oligopoly) ordained by government. And that is the problem that should be addressed directly. Current government policies create an absurd amount of artificial spectrum scarcity. Edit: Obviously I wasn't clear here -- I should have been straightforward rather than going with a clever turn of phrase. I meant to say, as a point of accepted definition, that government-granted monopolies are not 'natural monopolies.' Natural monopolies are monopolies that occur 'naturally' in the market because of conditions or extreme capital requirements.
  - BrentRitterbeck 17y ago
    "Natural monopoly" is an economics term. http://en.wikipedia.org/wiki/Natural_monopoly http://en.wikipedia.org/wiki/Natural_monopoly
    - tc 17y ago
      Please identify whether a "sweetheart municipal franchise agreement" is a "natural monopoly" or a "coercive monopoly." http://en.wikipedia.org/wiki/Coercive_monopoly http://en.wikipedia.org/wiki/Coercive_monopoly [Edited]
scott_s 17y ago
I see no reason why Apple and AT&T - who are corporations, not people - should have the right to do as they please. Our government grants corporations the ability to exist because doing so is beneficial to society. If a corporation is doing something that is harmful to consumers - and potentially society as a whole - then I want the government to step in.
- tc 17y ago
  Corporations are just collections of people (except for the grant of limited liability, which is really an abuse). Too often, I think, we judge 'harmful' by the impossible standard of "could I imagine things being better if I could force others to do things exactly my way" rather than "would we be better off if they didn't exist at all." So that is to say, sure, if a company is actually causing a harm, in the legal sense of the word (committing fraud, breaking contracts, etc.), then they should have to pay restitution for that. That's what the law is for. Not to second-guess how companies could better serve their customers.
  - scott_s 17y ago
    Corporations are also legal entities that are separate from the people that comprise them, so they shouldn't have the same kind of rights an individual would.

by tc 17y ago

neilk 17y ago

Not necessarily. Some of the FCC's questions are simply about clarifying policies. Maybe the average consumer won't read through (or care about) a list of prohibited app or app categories, but it sure would help developers.

tc 17y ago
That's nice and all, but no one is forcing developers to support Apple and AT&T either. Apple was never really thrilled with the idea of having third-party developers. Let's not be too patronizing to AppStore developers -- they all knew (or should have known) what they were getting into. Apple's agreement has always put developers at their mercy.
- bonaldi 17y ago
  No one is forcing Apple to develop for public airwaves, either.
  - tc 17y ago
    Would we really be any better off if they never had? Even considering the App Store policies which are objectionable to some?

jwhitlark 17y ago

Not true. AT&T does not own the spectrum they use, it is a publicly owned natural resource, licensed to them under specific rules, and can be revoked by the FCC for failing to comply with the regulations. The government is not getting involved because people want to have their cake and eat it to, (although that is a pretty good default assumption), but because there appears to be collusion involving regulated resources.

tc 17y ago
You are being over-broad with the scary word collusion. Collusion would be AT&T, Sprint, T-Mobile, Verizon, etc. agreeing to keep voice revenues for the industry high by crippling mobile data. Nothing in a carrier's agreement with a handset vendor could possibly qualify for collusion. As for violating regulations, please find for me the regulation that they have violated. It seems to me that their present sin consists of doing something unpopular.
- boryas 17y ago
  This is a valid point, but I'm not convinced that it's OK for companies to act/co-operate in a way that is this detrimental to their customers just because they aren't supposed to be competitors. Based on the questions asked, the FCC seems to be trying to find out if this exclusivity agreement is harming consumers or not, which seems like a decent goal. If this inquiry leads to some transparency from Apple/AT&T, so much the better, right?
  - rottencupcakes 17y ago
    No! You can't think like that. Apple and AT&T should have every right to be as opaque as they want. If you don't support their policies and pricing, switch to another carrier and buy another phone. In a completely non-monopolistic scenario, which this is, the government should have no concern whether a company's action's harm customers or not, since the customer has complete choice in whether to buy the service or not. This is precisely a situation in which the customer wants to have his cake and eat it too. Regulated resources are by definition a case when the customer wants to have his cake and eat it too.

antonovka 17y ago

This can't end well. At the end of the day, Apple and AT&T have the right (or should have the right) to make any agreements they find necessary ... So can I have the right to broadcast my own GSM signal in the 900 MHz range, or a perpetual sweet-heart franchise agreement with my local municipal government to run last-mile internet to my neighborhood's houses? These are natural monopolies we're dealing with. My options are constrained to carriers that have been granted guaranteed access to public airwaves by the FCC. The carriers then use technical (carrier locks), legal (contracts), and social (difficult cancellation processes) means to lock consumers in. The carriers then collude with handset makers to restrict consumer choice further by locking handset features, and restricting the applications that they run. There are ways around this (such as buying third party unlocked, unrestricted phones), but carriers and handset makers leverage their government-backed market position to discourage consumer adoption.

tc 17y ago
These are natural monopolies we're dealing with. There is nothing natural about a monopoly (or in this case, oligopoly) ordained by government. And that is the problem that should be addressed directly. Current government policies create an absurd amount of artificial spectrum scarcity. Edit: Obviously I wasn't clear here -- I should have been straightforward rather than going with a clever turn of phrase. I meant to say, as a point of accepted definition, that government-granted monopolies are not 'natural monopolies.' Natural monopolies are monopolies that occur 'naturally' in the market because of conditions or extreme capital requirements.
- BrentRitterbeck 17y ago
  "Natural monopoly" is an economics term. http://en.wikipedia.org/wiki/Natural_monopoly http://en.wikipedia.org/wiki/Natural_monopoly
  - tc 17y ago
    Please identify whether a "sweetheart municipal franchise agreement" is a "natural monopoly" or a "coercive monopoly." http://en.wikipedia.org/wiki/Coercive_monopoly http://en.wikipedia.org/wiki/Coercive_monopoly [Edited]

scott_s 17y ago

I see no reason why Apple and AT&T - who are corporations, not people - should have the right to do as they please. Our government grants corporations the ability to exist because doing so is beneficial to society. If a corporation is doing something that is harmful to consumers - and potentially society as a whole - then I want the government to step in.

tc 17y ago
Corporations are just collections of people (except for the grant of limited liability, which is really an abuse). Too often, I think, we judge 'harmful' by the impossible standard of "could I imagine things being better if I could force others to do things exactly my way" rather than "would we be better off if they didn't exist at all." So that is to say, sure, if a company is actually causing a harm, in the legal sense of the word (committing fraud, breaking contracts, etc.), then they should have to pay restitution for that. That's what the law is for. Not to second-guess how companies could better serve their customers.
- scott_s 17y ago
  Corporations are also legal entities that are separate from the people that comprise them, so they shouldn't have the same kind of rights an individual would.