Is AT&T going to charge extra for new iPhone services?

AT&T's strange delay on iPhone tethering and MMS may be an early warning that the new services will pack a hefty price tag. It's time to say no

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Apple's new iPhone 3G S and iPhone 3.0 are loaded with important new features and upgrades, including more speed and probably more memory. But AT&T can't keep up. The latest example: delays and confusion over the future of tethering and MMS. If there was any doubt that the exclusive arrangement between the companies is an ugly roadblock on the way to true handheld computing, it's now gone.

Fortunately, there's a lot of motion at the federal level, including both houses of Congress and the FCC, to do something about the sad state of competition in the wireless world.

[ Take InfoWorld's visual tour of the iPhone 3.0 OS | Read about the new iPhone's new features. ]

A hearing by the antitrust subcommittee of the Senate Judiciary Committee next week will focus on text messaging rates and broader competitive issues. Given the workload of a committee occupied with hearings on a Supreme Court nominee, that's a signal of significant interest in those issues, says Chris Riley, policy council for Free Press, a nonpartisan public interest group working to reform the media.

I've beat on this issue before, and some readers have said, "No one has a right to an iPhone. If you don't like it don't buy it." Fair enough. Or is it? "No has the right to an iPhone," agrees Riley. "But this is about the right to consumer choice. Exclusive deals are impediments to innovation and competition."

Exactly. Just as the old AT&T stifled landline innovation in the 20th century, the new AT&T is stifling wireless innovation in the 21st.

High price for tethering?
At Tuesday's launch of the new iPhone at the World Wide Developers Conference, AT&T was very conspicuous in its absence from the list of providers who will support tethering and MMS. Not surprisingly, the audience noticed it immediately and their jeers were quickly echoed around the Web in blogs and news stories. By Wednesday, AT&T was backpedaling furiously, saying it will offer both services -- later in the year.

I don't like to be overly suspicious or conspiratorial, but something nasty is going on. As Apple's exclusive U.S. partner, Ma Bell has plenty of insight into upcoming iPhone features and revenue opportunities. Yet AT&T said nothing about two widely anticipated features until the next day. The company couldn't have been surprised or suddenly discovered the billing and network issues it cited as reasons for the delay.