If you own a cell phone, the giant telecom companies are likely holding you hostage right now.Apparently, Consumer Reports doesn't think much of the ex-ante competition among manufacturers to design popular products in order to obtain lucrative exclusivity contracts.
They know they can charge you what they want, give you spotty service, and even prevent you from getting the latest technology, because almost all the most popular wireless handsets on the market today are shackled by "exclusivity deals" — meaning if you buy a particular phone, you can only get service from one company.
Want an iPhone? You're stuck with AT&T. Own a Blackberry Storm? You have to deal with Verizon. These exclusive contracts mean your pricey phone is virtually worthless if you try to change companies. And forget about shopping around for a better deal.
...In Asia, 80 percent of wireless phones are sold outside of a wireless carrier contract. But in the United States, you're either stuck with one company, or your phone is effectively worthless. That's not a free market, that's just un-American.
Thursday, September 24, 2009
Consumer Reports Goes after Wireless "Exclusivity deals"
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The irony of CR trumpeting free markets and the American way is rich.
ReplyDelete"...In Asia, 80 percent of wireless phones are sold outside of a wireless carrier contract. But in the United States, you're either stuck with one company, or your phone is effectively worthless. That's not a free market, that's just un-American."
Of course, no mention of what that phone costs in Asia. Why, the price is similar to what you'll pay for a no-contract phone in the United States.
CR isn't complaining about contracts with phone companies and consumers, though. CR is blasting exclusivity deals with phone makers and mobile networks.
ReplyDeleteRight, but somewhat disingenuously, when they fail to point out that the competing tech standards in the US lead to as much phone-carrier lock-in as the contracts.
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