Apple Inc (AAPL)

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07:54 AAPL Apple: AT&T/iPhone deal under scrutiny by government, Verizon - AppleInsider (132.39 )

AppleInsider reports Apple's multi-year iPhone contract with AT&T (T) has become the poster child for the ills of the cellphone industry in a U.S. House committee debate, with Verizon also casting its own doubts on the device.

Although the debate on Wednesday was officially held to discuss the possibility of forbidding individual states from setting their own laws for wireless use, the focus quickly shifted towards what many believe are abuses of the open mkt that prevent genuine competition.

Representatives from Congress specifically accused exclusivity deals, like AT&T's agreement for the iPhone, of trapping customers. These terms have forced users to stay with their providers as long as they want to use certain devices, no matter the conditions.

Subscribers using the iPhone can't switch once their contracts expire or if they are unhappy with network quality, members of Congress said. AT&T's primary challenger in the wireless industry, Verizon (VZ), indirectly used the iPhone as proof that exclusive models were no guarantee of success.

A high-profile launch aside, the long-term future of the iPhone was still in doubt and Verizon felt no qualms about turning down the iPhone deal because it wasn't the "right opportunity" at the time, said the carrier's legal counsel Steve Zipperstein.