Friday, July 13, 2007

The iPhone economics or is it ATT shackle

I am hearing this word `oligopoly’ more often now. Yesterday when I came across it, I curiously brushed up on my Economics. Today I heard it again as iPhone came in for some Capitol criticism.

Buying iPhone would mean sticking with ATT wireless is old news. What strikes its owners now is the $ 175 early termination fee that a customer will have to pay AT&T if he quits the network before 2012 – despite reducing iPhone to an expensive paperweight minus the service.

Timothy Wu, a law professor at Columbia University and commentator on technology issues, described the cell phone industry as "spectrum-based oligopoly" where customers have given up their property rights.

"Imagine buying a television that stopped working if you decided to switch to satellite," Wu said. "Or a toaster that died if you switched from Potomac Power to ConEd."

The more we think we’re liberated, the more we’re shackled….

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