Tim,

you're way off base this time. I usually like the work of FreePress and enjoy getting the email updates and commentary. But in the instance of the recent avalanche of "Free My Phone" commentaries I just had to reply to you and tell you that I think you are dead wrong. In fact, I think your opinions on the cell phone exclusivity model are actually anti-democratic. Allow me to explain why in a few points.

First, I notice all the commentaries I have read so far authored by you, Josh Levy and others go to great lengths to vilify the cellular service providers. If you believe exclusive distribution deals for cellphones and pda devices are wrong or bad for consumers, then the manufacturers who sign those agreements are AT LEAST 50% responsible. Your recent opinion pieces in various venues (including my email inbox) railed against AT&T for locking up the iPhone. But do you really think that AT&T or any other entity could tell Apple (one of the greatest marketing organizations ever built) how they had to distribute their phone? If anything, Apple had more say in the matter than AT&T ... and they absolutely could have chosen to distribute the phone through multiple service providers. There is no way AT&T could have said, "Well, if you don't give us exclusivity, we won't sell it." So Apple is MORE to blame than AT&T, and you should hold them accountable in your posts as least as much as you criticize AT&T. That would be the "democratic" thing to do.

Second, why do companies like Apple choose to sign these exclusivity deals? Well, I know there is one simple reason why Apple did it. Because their goal was to sell as many iPhones as possible. And if a particular phone model is distributed through mutliple carriers, none of those carriers will spend a large amount of advertising promoting that particular device above and beyond the other products in their line-up. But if there is an exclusive deal with one carrier, then that carrier will spend a lot more money touting their "special device".

Here's an example that proves the point. Ask an average person which cellular carriers sell the BlackBerry Curve, and they might know one or two names, possibly with some hesitancy. But ask that same person which carrier sells the BlackBerry Storm, and I am confident that they will know the answer unless they just never watch TV. Apple knew they would sell more iPhones this way and they were right. And AT&T simply signed the deal because they knew it would attract more customers. This is just free-enterprise working the way it should.

Third, there is a dangerous misconception that somehow a company that sells a service is misbehaving if they sell you a device and insist you use their service with it. This misconception is driven by consumers who want to use alternate services on the devices paying alternate prices and still want to get a discounted price on the handset, but don't want to use their own ingenuity to find a solution. Instead, they think it should be their right to insist that the service provider change their business model to suit the consumer's desires. The customer isn't always right, otherwise everything would be free.

To ask a service provider to sell you a service delivery vehicle at a discounted price and then say they should help you use it with a competing service is an unrealistic expectation. It's like walking into a tavern and saying, "Hey, they're giving away free beer at the bar across the street, but they ran out of glasses. I see you sell people a beer mug at a reduced price if they purchase a pitcher of beer. Can I just get the mug at the reduced price without buying the beer?" This is unfair to the service provider, their employees and their shareholders. And it is undemocratic.

Fourth and finally, people do have choices. If they want the iPhone but just want to use it with free WiFi instead of with AT&T's cellular data service, just buy an iPod Touch instead. If you still need a phone, carry a pocket-size one with a simple plan with any carrier you like. Or you can go online and buy an unlocked iPhone from a third party vendor and use it with another carrier by putting their SIM chip into the device. The means by which this can be accomplished is well documented on the internet. There are other devices that access internet on WiFi, from netbooks to the Nintendo DS, solutions that fit a variety of budgets and needs.

So instead of insisting that AT&T stop trying to market the iPhone and their data service together, why don't you just accept that the consumer has never had more choices for accessing the internet on the go. This IS democracy in action.

signed,

a PDA and cellphone user for over 10 years.

Hi,

I appreciate this opinion and I am the last person that wants to come to the defense of the wireless phone carriers, but I think the argument misses a crucial point. The reason for the contracts and the reason for the exclusivity has to do with carriers recouping THEIR investment in the device.

The iPhone for instance is NOT a $99 device, but it can be "purchased" for $99 from AT&T because AT&T pays Apple a significant portion of the purchase price of the device on the customers' behalf. The reason they pay is because they lock the customer up into a 2 year contract in which they will be assured of earning back their investment through the monthly charges for the phone service. In essence the relatively higher service charges associated with wireless devices and cellular based internet access subsidizes the relatively low cost of the device itself.

As the video points out for $99 we get a device with capabilities approaching those of a laptop, yet we pay a small fraction of the price of a laptop. The iPhone is a splendid device, a platform that has without question completely changed the wireless phone marketplace forever. It has done that through intensive investment in R&D by one of the most innovative companies in the marketplace. One can just as easily argue that the current arrangement where carriers subsidize the cost of the devices actually puts the device in the hands of MORE people than the lack of choice in carriers restricts that access. When I tell people they can get an iphone for $99 they can't believe it and frankly I think the price point is quite exceptional as well. If Apple were to get paid $99 for the device they would lose money and we would all lose out on the innovation that has occurred in the last few years.

I think if you want to pursue this argument you really have to argue that carriers should not subsidize our device purchases at all. This practice has gone on since the very beginning of the cell phone market. Never has a customer paid full price for the phones and I expect if they were to start doing so now it would create a much larger consumer uproar than the lack of carrier choice. In time I am sure that all these devices will become available on other carriers, but I personally don't think it unreasonable that any of them would want to get paid for the device before the customer switches to another carrier.

I understand why the iPhone makes such a good target. A headline like "The New iPhone Sucks" (sent as subject of a recent email) iss certainly going to draw some readers, but I so far am not seeing the whole story get told here.

Thanks

Wesley Rosner
wrosner@mac.com

Verizon uses CDMA, AT&T uses GSM. There is no way to make an iPhone--which uses GSM--to work on Verizon Wireless--which uses CDMA. Now granted, a lack of handset exclusivity would allow Apple to make a CDMA iPhone, but there is no way to make a GSM handset talk on a CDMA network and vice versa.