Verizon Wireless shortens exclusive cell phone deals

Verizon Wireless said Friday that it will modify its cell phone exclusivity deals to ensure that smaller carriers get access to hot new phones more quickly.

In a letter dated July 17, Verizon Wireless CEO Lowell McAdam told key members of Congress that Verizon Wireless, which is the largest wireless service provider in the country, would allow smaller wireless operators with fewer than 500,000 customers to offer phones it was offering exclusively to Verizon customers after six months. Some exclusivity deals that Verizon has had with handset makers have lasted years.

McAdam sent the letter after lawmakers on Capitol Hill have questioned the practice of large cell phone companies striking long exclusive deals with certain handset makers, essentially ensuring that smaller operators that often serve rural areas do not get access to the hottest phones. The Federal Communications Commission and the Justice Department have also been looking into the practice.

The most publicized exclusive cell phone deal is AT&T's multiyear contract with Apple to be the exclusive carrier of the popular iPhone. Consumer groups have long complained that consumers living in areas not served by AT&T have been completely shut off from getting the latest and greatest cell phone technology in the iPhone.

In what looks like an effort to head off any legislation from Congress or further action by the FCC and Justice Department, Verizon said it would amend its policy to ensure that smaller carriers get access to new phones as well.

"Any new exclusivity arrangement we enter with handset makers will last no longer than six months - for all manufacturers and all devices," McAdam wrote in the letter.

But McAdam also defended the practice of exclusivity deals and said that the company still plans to strike such deals with handset manufacturers.

"Exclusivity arrangements promote competition and innovation in device development and design," he said in the letter. "This new approach is fair to all sides."

It will be interesting to see if any of the other major cell phone operators follow Verizon's lead on shortening the time it has exclusive deals. If not, it seems unlikely that such a move by a single operator would be enough to appease law makers and government regulators.

[mordyk]

While in principle I agree that every individual should have the option of any phone on any network, I do appreciate the fact that for now exclusivity deals are an important factor in the wireless business, it is remains unfair to smaller carrier customers to have to wait even 6 months. I suggest a compromise of giving small carriers a mandated and enforceable option of aligning themselves with one of the large carriers and gain rights to sell any of the phones the larger partner has managed to secure exclusive selling rights.

[Renegade Knight]

Since wirless is rapidly replacing land lines, it's too bad the FCC didn't impose the same rules. Any phone must plug into any system. It would let the carriers compete entirly on their service. Quite frankly their services are overpriced and suck. A little competition on a level playing field would do the consumer some good.

Left alone, Business will alwasy strive to warp the playing field to their advantage. Some succede.

[Nocturnex]

I can say ATT will be the least likely to want to cooperate with this being that the iphone is a huge source of revenue from the outlandish contracts with it, also the fact that with the exclusivity of it they gain an obvious edge over competitors. How many People do you know that switched to ATT just for the iphone off the TOP OF MY HEAD i can think of at least 20.

[ewsachse]

The iPhone is not that huge of a source of revenue. They sell more cheaper "talk only" and other "smartphones" than they do iPhones.

Anecdotal evidence is not scientific, not is all the lovefest for Apple from C/net and Wired.

Only hard sales numbers count, and the iPhone, while popular, is not at the top of the list.

[CrashPad63]

ewsachse, damn straight Iphone sales really benefit Apple only. ATT is paying a huge premium for the priveledge. LMFAO

All the btching about exclusivity deals is ridiculous. If you live somewhere that ATT doesn't service it's just tough luck. What entitles people to get whatever they want? If no one would sell phones to MetroPCS, Cricket, Boost Mobile etc. then maybe that would be something to look into. The fact is that these small carriers have phone available to them many of which are quite decent. The plans on these smaller carriers are generally a lot less along with the size of their coverage areas. It would stand to reason that they wouldn't have all the best phones available on their network either.

Stop whining. Y'all are a bunch of babies who's parents probably never told you no. America is supposed to be capitalistic not communistic. Communists want everything to be equal and fair for everyone which does nothing but destroy an economy and the people in it.

[Renegade Knight]

You sound like a libertarian, or an anarchist. Either way you don't really understand poltiical systems, governments, and communism. Nor would you listen to the truth. I'll give you one nugget of it though just in case I'm wrong. The Soviet Union was socialist. Power concentrated in the hands of the government and in the government a few people controlled it. It was the socialism that destroyed the economy. Much like business would do in the USA if the government (which has fogotten they have a job to do for it's citizens) doesn't regulate the capitalism for the health of the country and it's citizens.

A well regulated wirelss industry would have multiple wireless companies competing on service, and we could buy our own phone at the corner phone store and use it on any carier. That would also encourage more phone makers to sell use better phones for less. We don't have that latter thing here, and we only have part of the former.

[libertyforall1776]

Good to see them taking some corporate responsibility! Just goes to show, everyone does not need to run to the government to solve every problem!

[cmhasan]

In my experience with AT&T in cell phone, land line, international calling plan, calling card etc for last 8 years or so I can say AT&T is the most disonest big company. iPhone is big deal for AT&T and without it it would not survive. After talking to several AT&T customer service depatrment for a dispute I can say they can go to any extent to monopolize anything they can.