Copps Responds to Senators, Orders Handset Agreement Probe

WASHINGTON, Thursday June 18, 2009 -  After a frenetic burst of activity on and off Capitol Hill, Acting FCC Chairman Michael Copps (D) announced on Thursday an investigation into whether consumers are being harmed by exclusive contracts between handset manufacturers and wireless carriers.

Senators John Kerry, D-Mass., Roger Wicker, R-Miss., Byron Dorgan, D-N.D. and Amy Klobuchar, D-Minn. kicked off the controversy Monday as they co-signed a letter to Copps demanding an investigation.

The senators asked Copps to examine exclusivity agreements in order to investigate the extent of their effects on consumers choice.  Following hearings on wireless industry business practices in both the Senate Commerce and Judiciary Committees, Copps told Broadband Policy Summit attendees Thursday that he would accede to the senators' request.

"We must open a proceeding to examine exclusive wireless handset agreements," Copps said, so consumers can "reap the benefits of a robust marketplace."

In a statement posted Tuesday on his website, Kerry had specifically singled out AT&T's iPhone and Verizon's BlackBerry Storm as prime examples of handset exclusivity agreements limiting consumers' choice of carrier.

Copps said he doesn't see any difference between how wireline and wireless broadband providers should treat customers' equipment choices, he said in an interview.

Wireless carriers shouldn't be able to mandate a specific phone any more than a cable company can require a Windows-based computer instead of a Macintosh, he suggested.  And Carterfone-type open access requirements should apply to the wireless network just as they do the wireline phone network, Copps said.

Free Press policy director Ben Scott said his organization was "grateful" to Copps for his decision. "The path to innovation is paved by openness," Scott said. "Unlocking devices is a good start."