Pick your handset or a network, not both

That’s because AT&T has an exclusive deal with Apple to distribute the iPhone - and because the company bars iPhone users from using its data service for voice calls.

And AT&T isn’t alone. The nation’s Big Four cellphone companies - the others are Verizon Wireless, Sprint Nextel Corp., and T-Mobile USA - all offer sophisticated smartphones available from no other carrier. And their policies limit what consumers can do with them.

Telecom activists, federal regulators, and members of Congress are considering rules that could end usage restrictions and make it easier for consumers to use the phones of their choice on any cellular network.

“As far back as 2007, I’ve held hearings warning that wireless carriers were exerting far too much control over . . . features, functions, and applications,’’ said Democratic US Representative Edward J. Markey of Malden, former chairman of the House Subcommittee on Telecommunications. “I do believe it stultifies innovation and unquestionably diminishes consumer choice.’’

Last month, the Senate’s Committee on Commerce, Science and Transportation held hearings on the cellular industry’s policy of doing exclusive deals with the makers of cellular handsets. For example, only AT&T offers the iPhone. Research In Motion Ltd.’s BlackBerry Storm is available only through Verizon Wireless. And Palm Inc.’s Pre is offered only by Sprint Nextel Corp., though Verizon is expected to offer it in the next few months. The Big Four carriers can strike such deals because they serve about 90 percent of the nation’s 270 million cellphone users and can offer phone makers a huge potential market.

Some critics say undue government meddling could reduce consumer choice and stifle innovation. But executives of smaller cellphone carriers have told Congress that handset exclusivity keeps them from offering advanced technology to their customers.

“Regional and rural carriers cannot gain access to the latest cutting-edge devices, which gives large carriers a key competitive advantage,’’ said Victor Meena, chief executive of Cellular South Inc. of Ridgeland, Miss.

A University of Pennsylvania law professor, Rob Frieden, told the committee that exclusivity hinders consumer choice by making it difficult and costly for phone users to switch between, say, a BlackBerry Storm and a Palm Pre.

But others testified that exclusive handset deals have been a boon to the public.

“I think a rule prohibiting exclusives would sacrifice the greater good of all consumers,’’ said Barbara Esbin, a senior fellow at the Progress & Freedom Foundation, a free-market-oriented think tank.

Esbin said the iPhone’s popularity has spawned a host of advanced handsets like the Pre, the Storm, the G1 Android phone from HTC Corp., and many others, resulting in more choices for consumers.

She added that exclusive deals are common in business; for example, TV personality Martha Stewart’s has an exclusive deal to sell household items at K Mart stores. “I would find it extraordinary if the government told Martha Stewart you have to sell at Target,’’ Esbin said.

Besides, American cellphone technology can make it tough to switch a handset from one carrier to another. Most of the world’s cellphones use a technology standard called GSM. But in the United States, two of the four biggest providers, Sprint and Verizon, use CDMA. (AT&T and T-Mobile use GSM.) As a result, an AT&T handset, such as the iPhone, can’t be used by a Sprint or Verizon customer. There’s no reason why a CDMA-compatible iPhone can’t be produced, however.

Democratic Senator John F. Kerry of Massachusetts, a committee member, said there were legitimate arguments on both sides. “We’ve made no decision,’’ Kerry said after the hearing. “We need to sit down and work through the realities.’’

The Justice Department, though, might act against exclusive phone deals. Citing unnamed sources, The Wall Street Journal reported the department has launched a review to determine whether they prevent smaller companies from offering advanced phones to their customers.

Carriers are also under fire for limiting the capabilities of smartphone software. The iPhone, BlackBerry, Palm Pre, and other smartphones are like pocket computers, capable of running thousands of software applications, called “apps.’’ But companies sometimes order software developers to limit them.

For instance, the iPhone can run a version of Skype, a popular program that can place low-cost phone calls over the Internet. IPhone users can make Skype calls when they’re in range of a wireless Internet link. But the iPhone version of Skype can’t place calls over AT&T’s cellular data network, which would be much cheaper than using the company’s voice service.

AT&T limits Skype to avoid undercutting its cellular voice revenues. “We absolutely expect our vendors not to facilitate the services of our competitors,’’ an AT&T executive, James Cicconi, told USA Today in April. “Skype is a competitor.’’

In April, the telecom watchdog group Free Press asked the Federal Communications Commission to stop cellphone carriers from restricting the software on smartphones. Both President Obama and FCC commissioner Julius Genachowski support “network neutrality,’’ the idea that users of data networks should be able to use any kind of software or hardware they choose.

Ben Scott, policy director at Free Press, called unlimited access to cellular data networks “a classical net neutrality issue.’’ He said the FCC last year barred Comcast Corp. from blocking a particular kind of data traffic on its landline network. The FCC ruled that Comcast could not treat one kind of Internet data differently from other kinds. “Wireless Internet access should be subject to the same principles of nondiscrimination,’’ he said.

But Wayne Crews, of the Competitive Enterprise Institute, said free-market competition is a better way to encourage neutrality. “IPhones aren’t the only option for people to do multimedia online,’’ he said. “All it takes is another provider that decides to go the other way.’’

For example, AT&T blocks Skype on the iPhone, but a rival company could permit Skype on its smartphones as a way to steal customers from AT&T. “That’s what markets do,’’ Crews said. “They provide you with that choice.’’

Hiawatha Bray can be reached at bray@globe.com.