FCC chair nominee: I'd investigate exclusive carrier deals

The Obama administration's candidate to chair the FCC says he agrees that exclusivity deals between cell phone manufacturers and carriers need more scrutiny, and promised to review such deals if he's confirmed by the U.S. Senate.

Reuters reports that Julius Genachowski, who's been tapped by President Obama to lead the FCC, wrote that he would "act accordingly to promote competition and consumer choice" as part of his confirmation testimony last week.

He also affirmed that he would review a petition by the Rural Cellular Association, which has criticized exclusive carrier deals for locking out smaller carriers in outlying areas from such hot handsets as the iPhone and the Palm Pre.

The news comes in the wake of last week's letter to the FCC from four senators—three Democrats and a Republican—calling for an investigation into carrier exclusivity agreements, which might (according to the letter) "unfairly restrict consumer choice or adversely impact competition in the wireless marketplace."

As I wrote last week, exclusivity deals between carriers and cell phone manufacturers seem to be getting more and more common. For starters, you've got AT&T and the iPhone, Sprint and the Palm Pre, Verizon Wireless and the BlackBerry Storm, and T-Mobile and the upcoming, Android-powered myTouch 3G. But dig a little deeper and you'll find the LG enV3, only on Verizon, the Samsung Instinct for Sprint, the BlackBerry Bold on AT&T … the list goes on.

Of course, the whole issue here is whether exclusivity deals are good, bad, or indifferent for consumers.

On the one hand, AT&T's exclusive on the iPhone spurs competition from all the other big carriers, who are upping the ante—hopefully in terms of quality, features, and price—to answer AT&T's challenge. On the other hand, a Sprint subscriber who's locked into a two-year contract can't get an iPhone without paying a hefty penalty, while chatters in rural areas not served by AT&T can't buy an iPhone at all (hence, the petition by the RCA).

In any case, with Genachowski's confirmation as FCC chair looking all but certain, you can be sure that the issue of carrier exclusivity vs. consumer choice isn't going way anytime soon.

So, what do you think: Should the FCC ban carriers and cell phone manufacturers from striking exclusivity deals? Should the government step back and let the market decide? Or is there some middle ground here?

Update: BetaNews has a lengthy post detailing last week's Senate Commerce Committee hearing on this very issue—complete with compelling arguments on either side—right here.

Related:
FCC chair-designate to look at mobile handset deals [Reuters]