The iPhone is starting to cause quite a bit of buzz, not only in the tech world but on Capitol Hill as well. A few weeks back I wrote about the iPhone and how you might as well forget about it here in South Dakota. Since then I have been following the progress of this device from the 500,000 units sold in the first week, to the problems with AT&T’s EDGE network that includes terrible connectivity speeds and system crashes, to problems with the phone itself which include up to 60% of the phones having bad batteries to the fact that, like the iPod, you cannot replace the battery yourself and instead have to pay up to $85 to have Apple do it for you.

It appears that I am not the only one that has been following the iPhone. Free Press, a national, nonpartisan organization working to reform the media is also not too impressed with the iPhone and Apple’s exclusive deal with AT&T and has started a campaign against exclusivity deals like this in the wireless industry. Congress is watching as well, and AT&T is directly in their crosshairs.

Why does Congress have a problem with this deal with AT&T? First off, as is the case with just about all cell phone providers, AT&T charges up to $175 for early termination for iPhone buyers, but unlike most cell providers, AT&T doesn’t give you a break on the cost of the phone charging full retail price. What is the big deal with that? Well in theory the termination fee is charged to help offset the money cell providers loose by giving discounts on phones to new customers. So in AT&T’s case, it is a win/win, they get full price for the phone and collect $175 on the off chance someone cancels their contract early. But therein lies the other problem, why would anyone cancel their contract early? Doing that will end up giving them a $600 paperweight because the phone will not work with any other provider.

So what is next? I doubt this will lead to the iPhone making it’s way to South Dakota anytime soon but what it has done is open a debate that could lead to a revamping in the telecommunications industry in general and the cell phone industry in particular. The industry has been fighting against open wireless standards from the beginning and the latest hearings have again brought that issue to the table.

The hearing also discussed the FCC’s upcoming auction of portions of the available wireless spectrum, formerly used for analog television broadcasts. Net neutrality supporters and consumer advocates have pushed for opening the spectrum for creating a nationwide wireless broadband network, which Consumers’ Union’s Chris Murray called a “positive development.”

Murray, the nonprofit organization’s senior counsel, testified that “[w]ithout open access to the full range of wireless services and devices, consumers will continue to face unfair charges for service modification or termination, inability to use innovative applications, devices that have been hobbled to minimize competition, and other troublesome practices currently used by the dominant cell phone and broadband providers.”

So while we will still miss out on the iPhone revolution, the next big technology thing might actually show up here in South Dakota and if that is the case, we will be able to thank AT&T, a company that has ignored us for years.