The most important developments in mobile technology have required creative funding streams that have necessitated carrier exclusivity agreements. For example, the iPhone’s “natural” cost would be well north of $600, were Apple not able to create a subsidy for purchasers through an exclusive partnership with AT&T.
Exclusive and exciting technology generates more subscribers to the carrier, which allows it to subsidize the technology on the front end. Further, exclusivity creates incentives for new phones to be developed in partnership with competing carriers. (Case in point: the Palm Pre.)
Enter the dark clouds of FCC regulation. The Commission is set to determine whether these private contracts between providers and manufacturers are “anticompetitive” and “contrary to the public interest,” which would be a reversal of its own decision in 1992. Unfortunately, the Senate seems eager for such a reversal; today the Commerce Committee is holding hearings on the subject.
If the iPhone had cost $600 it never would have existed. With this regulation, the next great idea won’t exist.
Internet Scofflaw 