AT&T's iPhone deal under scrutiny

As a stronger regulatory breeze gusts through the nation's capital, wireless phone companies are feeling the heat to change some of their business practices. Front and center is AT&T Inc. and its cozy two-year relationship with Apple Inc. and the popular iPhone. AT&T is the only U.S. carrier allowed to sell the device in a practice known as handset exclusivity. If consumer groups and some policy makers have their way, handset exclusivity would be banned and the iPhone would become available on any compatible wireless network. Ditto for the BlackBerry Storm, currently sold only through Verizon Communications Inc., and the Palm Pre, sold exclusively via Sprint Nextel Corp. Critics say exclusive handset deals limit consumer choice and they argue that innovation would occur just as rapidly even if the practice were eliminated. Both sides will get a chance to state their case after the Federal Communications Commission voted late last week to conduct a fresh review of the wireless industry. The outcome is far from certain, however, and it's not even clear if the FCC has the authority to ban handset exclusivity.