Seeking more smartphones for rural areas, group asks FCC to ban exclusive maker-provider deals

Technology has the potential to advance the lives of individuals, the ingenuity of businesses, and the productivity of communities, but only when such devices or services are available. The Rural Cellular Association filed a petition May 20 asking the Federal Communications Commission to ban exclusive agreements between cellular phone makers and service providers, which RCA said would provide rural residents with more opportunities to acquire the most recent cellular technology.

The association of 82 small and rural cellular service providers "contended the exclusivity agreements are 'anticompetetive' and 'unfair' because they stifle consumer choice and often mean premium prices for users," writes Scott Carlson for the Argus Leader in Sioux Falls, S.D.: "The group also contended such exclusive arrangements are creating another 'digital divide' between urban and rural America. Those consumers affected usually live in rural areas where service is not available from some wireless carriers who also control the sale of advanced handsets, the group said in its petition."

The petition mentions several specific devices, including the Apple iPhone, Verizon's Voyager, and the Samsung Ace, that utilize multimedia and Internet technology. Many national cellular phone companies "do not offer adequate coverage in rural areas," writes Chase Higgins on Phonemag.com. "Some customers have no choice but to be with the smaller carriers. The petition claims these subscribers should not be left out in the cold when it comes to new handsets" and the technology that accompanies them.

RCA says many consumers wind up "being channeled to purchase wireless service from a carrier that has monopolistic control over the desired handset and having to pay a premium price for the handset because the market is void of any competition for the particular handset." The group said in its petition, "Americans living in rural areas who cannot get any coverage from the carriers benefiting from these exclusive arrangements are also harmed, since they are denied the technological benefits of many of the most popular handsets available today. The Commission must ... reverse the increasingly common practice of exclusive handset arrangements that deprive rural area residents of the benefits of evolving technology."

The petition, which claims all rural areas are affected by "these exclusive arrangements," cited rural areas from 16 states. "The agreements essentially increase the digital divide between urban and rural areas" RCA counsel David Nace told the Times-News in Twin Falls, Idaho,