Market Beats Government: Cell Phone Edition

Jesse Blumenthal / July 21, 2009

This month, Senator Herb Kohl (D-WI) sent a letter to the Chairman of the FCC and the head of the Justice Department’s antitrust division, asking them to investigate cell phone exclusivity agreements. Exclusivity agreements are arrangements between cell phone makers and service providers to allow one carrier the exclusive rights to sell a particular phone for a period of time. One of the major objections by Sen. Kohl and others was that these agreements disproportionately hurt rural Americans, and those who were customers of smaller carriers.

Then, last week, Verizon Wireless announced that they were changing their policy. After six months, Verizon will allow small carriers (those with fewer than 500,000 subscribers) to sell the phones that it has the exclusive rights to distribute. Of course, those who favored a government solution were not impressed. (more…)