Ring! Ring! Ring! Government-Phone!

In one of those odd sort of moves that I suspected for a while, Verizon is moving to cut its exclusive contract with cell phone makes (such as LG and RIM) to six months.

On one hand, there is a lot of talk within much of the websphere about how this sort of deal will affect the likes of Apple, and its contract with ATT&T .  This deal is about to expire, but, as my as habits of conversing on subways with random strangers, even the little old French Grandmother characters are desirous of them (especially jail-broken ones that they can use with T-Mobile).  They are a beautiful merger of form and functions, and the App store has proven wildly successful as an example of what one can do on the go.

For a lot of people, this deal allows Apple, if it so chooses, to open into a wider playing field  of customers.  There is some speculation that this, plus the introduction of newer technologies, will help end some of the tech wars primarily between CDMA and GSM.

Although the tech and corporate world has a huge impact in these decisions, a very poignant point has  to made about any consumer in the United States: If it touches the consumer, it is regulated, in some way, shape or form,usually by at least one Federal Agency, though there may be more both at the Federal and State/Local levels. As a result, it is worth noting that the other big news always attached to these articles is the following:

Both the Department of Justice and the Federal Communications Commission (the FCC) are investigating the issue.

It is one thing to hear the Department of Justice.  It is one thing to hear the FCC.  Both in tandem, should strike fear in someone’s heart, and joy in others.  This is due to one very famous Supreme Court Case, Chevron USA, Inc. v National Resource Defense Council, Inc. The Chevron Defense, as it is called now, upheld the following for federal agencies:

• Agencies may step in to interpret the law
  1. If the statutes are ambiguous,

  or

  2. Congress purposely left space for agencies to interpret the statute.
• The courts will defer to the agencies’ interpretations if those interpretations are reasonable or permissible.

As a good friend of mine, a law student explained it to me:  It is like Godel’s Incompleteness Theorems.*  It is nearly impossible to find a case that doe not qualify under Chevron- agency’s can interpret because the law is continually self-revealing by agencies.  Their words are a form of the law.  What the agencies say generally tend to go in US courts unless it is completely wackjob and clearly uncostitutional- and that rarely happens.

The choice to have both the FCC and the Department of Justice means someone is looking at the cellular phone industry and wants to crush it as if whomever is starting this owned Thor’s Hammer.   To have these two particular departments work together looks as if someone is looking for the underlying Federal Case to either severely fine or prosecute.  The FCC could quickly make the law, and the impossibility of changing the system as it is right now gives the DOJ the ability to strike swiftly.  Law would be on their side, even if it is just the word of the FCC.  The blow would ring loudly through Telecom, and cause massive fallout, similar to that of the Breakdown of Ma Bell.  Why else would in side the notorious city on the Potomac would anyone choose to work together?

Update: So Congress is also involved.  Be wary.

*Much thanks to one Jesse Mermelstien for that comment many moons ago. If a law review paper ever appears in his name- the idea that administrative law is constantly revealing is his.  He’s starting his second year of amazing law school come September, and seems from what I get out of him, to like the business of lawyering, so if you ever run into him…Very Brilliant, just needs a firm!

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