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The Rural Cellular Association contends that exclusive deals made between handset makers (like Apple and its iPhone) and huge telecommunication companies violates federal anti-trust laws. If you want an iPhone, you have to join AT&T, for example. The federal Department of Justice appears to think the charge has merit and is in the early stages of an investigation aimed at determining if Big Telco is impeding competition. These ties between big telecom companies and handset makers hit rural providers the hardest. “Regional and rural carriers cannot gain access to the latest cutting-edge devices, which gives large carriers a key competitive advantage,’’ said Victor Meena, chief executive of Cellular South Inc. of Ridgeland, Miss.
Key U.S. Senators are said to be in favor of the investigation. Former Federal Communications Commission chair Michael Copps said in June that the agency should determine whether some of these arrangements adversely restrict consumer choice or harm the development of innovative devices, and it should take appropriate action if it finds them.”
The rural argument here is key, according to the Wall Street Journal. Rural telecom carriers “claim today’s wireless markets are increasingly uncompetitive and underserving rural areas. Hu Meena of Cellular South, a Mississippi-based carrier with about 750,000 subscribers, told Congress that ‘the industry is trending back towards consolidation and the days of Ma Bell.’ Regional and rural carriers, he said, can’t gain access to the latest gadgets because larger carriers have cut these exclusive deals.” The Journal says that 96% of rural residents have a choice of at least three carriers.