02/26/2008, 6:20pm, EST
Tuesday, February 26th
Draft bill could unlock iPhone in U.S.
A new draft law in the U.S. sponsored by Rep. Ed Markey (D-Mass.) would require every mobile provider to offer subsidy-free wireless customer equipment, effectively breaking the exclusive deal between Apple and AT&T over the popular iPhone and allowing all owners of that device to subscribe to a wireless carrier of their choice. A hearing is scheduled on the draft bill for tomorrow morning, and a lobbyist for CTIA-The Wireless Association representing the major wireless carriers is already scheduled to speak about the bill.
The bill, titled 'Wireless Consumer Protection and Community Broadband Empowerment Act,' would establish new rules for wireless carriers that include offering unsubsidized service as well as clearly disclosing rate plans to customers in a "clear, plain, and conspicuous manner," according to News.com.
Under the draft law carriers would be obligated to provide more detailed maps of their network coverage areas, and would be forced to allow customers to cancel contracts for any reason without penalty within the first 30 days as well as prorate any fees associated with leaving a contract early. Wireless carriers argue that early termination fees help cover the cost of subsidized cellphones that come as part of various plans, and customers currently looking to purchase an iPhone are required to sign up for a 2-year service contract with AT&T in order to use the cellular handset in addition to paying the purchase price of the device.
A sizable portion of iPhone purchases are also estimated to wind up in the hands of 'unlockers,' or users who purchased the device without intending to sign up for an AT&T service plan but instead use software hacks to 'unlock' the phone for use with a carrier of their choosing. Apple has fought a constant battle since it began shipping the iPhone in late June, releasing software updates that routinely break various hacks released to unlock its handset for use with non-AT&T providers.
Filed under: iPhone, Apple, Investor, industry
Other story tags: AT&T, wireless, mobile
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They are so gonna be surprised to see it up over US$1000!
This is of very little concern for Apple (or any other handset maker, for that matter). The US market has so far mostly been shielded from the actual prices of mobile handsets due to these convoluted contracts and subsidies. With this legislation in place, it will be apparent how much these phones actually cost (some are more expensive than cheap laptops). Many EU jurisdictions have such laws and they haven't really killed the game for the carriers (nor for the manufacturers). Contracts continue to be popular, for obvious reasons (seemingly free phone, in exchange for something one would be probably paying anyway).
If I have to pay a high price for the phone to not get locked into a contract, I'm all for it. So if my carrier gives me crappy customer support, I can take my business somewhere else and not have to be held hostage for 2 years. As it is now, if you are locked in for 2 years, customer support isn't an issue because you are going to get screwed one way or the other.
This will have no effect on iPhone.
Since the iPhone is a GSM-based phone, the only other carrier "of choice" in the US would be T-Mobile, which is about 1/5th the size of AT&T. As Verizon and Sprint are both CDMA-based networks, the bill as it stands gives little additional choice to iPhone users.
This is not true. It is only true in a few small selected markets. I have both and their coverage areas almost everywhere are much different. T-Mobile had at one time a webpage that told which areas they had agreements with AT&T about.
Also, remember that T-Mobile is 1900mhz only while AT&T is both 850mhz and 1900mhz. The 850mhz markets are where AT&T (or its predecessors) held one of the two (A or B) analog wireless franchises back in the day and when they came out with digital, they overlaid it on their analog networks. Those places with AT&T at 1900mhz are where AT&T did NOT have the analog franchise and came in as a digital only competitor later on. (Or they run 1900mhz and 850mhz in the same area).
Are we to believe that just the phone part of the iPhone costs Apple around $600 (or even half that)?
Bollocks ...
This bill is ridiculous. The whole reason iPhone is locked to AT+T is because it required AT+T to make a significant investment in its network in order to accomodate it. What was the last handset which demanded a carrier to upgrade its system?
If you really want an iPhone, you should be alright living with AT+T's network. If not, there are so many other phones you can buy unlocked and unsubsidized. No one has a constitutional right to an unlocked iPhone.