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Exclusive arrangements between wireless handset producers and carriers promote innovation in the marketplace and are not anticompetitive, argue PFF Senior Fellow Barbara Esbin and Visiting Fellow Berin Szoka in "Exclusive Handset Prohibitions: Should the FCC Kill the Goose that Laid the Golden iPhone?," released by The Progress & Freedom Foundation. The lack of immediate availability of certain handsets by consumers in rural areas does not warrant calls for FCC intervention in carrier and handset agreements, the authors state, because the U.S. wireless and handset markets are highly competitive.

In the paper, the authors counter claims in a recent petition filed by the Rural Cellular Association asking the FCC to investigate exclusive arrangements between wireless carriers and handset manufacturers as anticompetitive. Specifically, the petition claims large wireless companies have an unfair market advantage by giving their customers exclusive access to certain advanced smart phones, such as the Apple/AT&T iPhone. Because smaller network providers are unable to attract such exclusive deals, they claim the arrangements are unfairly discriminatory and anticompetitive.