Verizon Offers Compromise In Exclusivity Debate

For about a month now, Congress and the FCC have been investigating the exclusivity deals between mobile carriers and phone makers which require that certain handsets only operate on certain networks (for example, the iPhone on AT&T). Now, Verizon has volunteered a compromise to Rep. Rick Boucher (D-VA), chairman of the House Energy Subcommittee on Communications, Technology and the Internet, which would allow smaller carriers access to the restricted phones after a six-month delay, while continuing to block the major carriers. "From now on, when Verizon strikes a deal with a manufacturer for exclusive access to a handset, it will allow the phone be sold after six months to any carrier with fewer than 500,000 customers." In a letter to Boucher, Verizon said, "Exclusivity arrangements promote competition and innovation in device development and design. We work closely with our vendors to develop new and exciting devices that will attract customers. When we procure exclusive handsets from our vendors we typically buy hundreds of thousands or even millions of each device. Otherwise manufacturers may be reluctant to make the investments of time, money and production capacity to support a particular device." Many remain unimpressed by Verizon's generosity.

Hmm.

[ground.zero.612]

Exclusivity arrangements promote competition and innovation in device development and design.

Citation needed.

I would argue that it is either an antitrust [wikipedia.org] issue, or dances on the fine line. To make a car analogy, wouldn't it be illegal if Ford and BP paired up to make Ford's only run on BP gasoline/diesel? Of course IANAL.

Understandable

[sanosuke001]

I would love to see the major carriers have to compete with their services alone, but Verizon does make a valid point.

However, they also talk out of their asses. "Exclusivity arrangements promote competition and innovation in device development and design" but they fail to realize that we want a choice for where to go with whatever phone we want. Handset manufacturers would make new handsets regardless; I don't think the major carriers have as much influence as they think they do. Unfortunately, its tough to force them to do anything because people are tethered to their cell phones; a boycott would be impossible since nobody cares enough to do so. They care enough to complain but when push comes to shove, nothing.

Re:Why Should Verizon Compromise At All?

[Darkness404]

It should be regulated so long as we have draconian laws that let Apple say that jailbreaking violates copyright ( http://news.cnet.com/apple-iphone-jailbreaking-violates-our-copyright/ [cnet.com] ) and so long as we have a legal system that awards outrageous "damages" for "infringements" we need regulation to keep them in check.

Everything is supposed to be a compromise, if the government didn't help businesses at all, than we wouldn't need laws protecting consumers, similarly when the government over-protects consumers you need balance by giving businesses certain rights. With copyright you have a few publishers screwing the masses and so long as the DMCA and other similarly absurd copyright laws are in effect, you need government protection to protect you from them.

Re:Hmm

[Anonymous Coward]

As a consumer, which do you like more:
      1. AT&T pays 80% of the cost of your iPhone, so the phone only costs you $99 (but you have to use AT&T in order to get that amazing deal)

      2. You pay the full $600 price for your iPhone and you can choose between the only 2 carriers (in the US) and 1 of them will be AT&T anyway.

Worst idea ever ?

[wimg]

So what happens if that small carrier gets 500.001 customers ? You can't use your iPhone on their network anymore ?
So small carriers will need to stay small... ofcourse Verizon loves that idea, because then they can keep the status quo in the market !

Re:continued crappy service & coverage

[tomz16]

All this does is allow infighting for handsets but doesn't solve the problem of crappy service over the US. If the war torn middle east and mount everest can get cell coverage why can't we get decent coverage in maine. Mount everest has people on it 1 month a year, there are over a million people in maine at any given time! I can't use my phone is 1/2 the counties here and that's with the AT&T.

DING DING DING DING... There's your problem! GSM service in North America is a complete joke in my experience. ESPECIALLY once you venture out of any major city or highway! Just look at the coverage maps for each carrier!

I've had both a CDMA and GSM work phone for many years. Traveled through much of the US. I always chuckle when I see some reviewer favorably comparing the two, ESPECIALLY on coverage.

I was actually up in Maine (Bangor and Bar Harbor) just last week. I had my personal verizon phone with me, and a GSM work phone. The GSM phone had a t-mobile sim but all of the carriers seem to mutually roam in Maine. The phone could associate with banner (company) : Cingular (AT&T), US-890 (Unicel), and T-mobile (T-mobile). It autoregistered to any one of those networks depending on the strongest signal. All THREE of those GSM networks combined were completely dwarfed by Verizon's native CDMA coverage. I mean it wasn't even remotely close! Hell, I had full EVDO revA coverage in areas that couldn't even get a regular GSM/GPRS signal.

In my experience, GSM in Canada is no different. For example, I continued up to Cape Breton after Maine. At one point, the closest GSM tower (Rogers) was a hundred miles away! Full CDMA coverage almost all the way up there, and many spots with EVDO!

So... In my opinion, the easiest way fix to your problem with coverage in the boonies is to go visit a verizon store, and just bite the bullet on the BS craptacular locked-down handset they will give you. At least you'll be able to use your phone to... you know... make phone calls...

Re:Why Should Verizon Compromise At All?

[QuoteMstr]

Of course exclusivity deals are terrible for ordinary people. That's not factually in doubt. Instead, I'd like to explore why you'd post a comment like this. As I see it, there are three explanations:

1. You're a paid shill: not unheard-of. It would explain your posting as an Anonymous Coward, and would explain the completely idiotic thought wrapped up in perfect grammar and spelling.
2. You're just trolling: in that case, you've succeeded, though you certainly could have done better.
3. You genuinely believe the schlock you spewed: this is the least likely and most depressing possibility. This belief would indicate that you really do lack even the most basic grasp of your own economic best interests, and possibly some kind of childhood trauma that created in you an unflinching obedience to authority. Do you vote Republican by any chance?

I sincerely hope the correct option is one or two. People who genuinely believe the crap you posted are responsible for most of the human misery in history.

Astro lawn (Re:continued crappy ...)

[unixan]

So... In my opinion, the easiest way fix to your problem with coverage in the boonies is to go visit a verizon store, and just bite the bullet on the BS craptacular locked-down handset they will give you. At least you'll be able to use your phone to... you know... make phone calls...

Your impressive [google.com] list of Verizon's [slashdot.org] virtues [slashdot.org] seems a little suspicious.

Especially when you seem rather sympathetic [slashdot.org] or unusually [slashdot.org] knowledgable [slashdot.org].

Re:Understandable

[Anonymous Coward]

AOL has been available to Mac users for 20 years

what exactly is Verizon thinking?

[tmach]

Isn't Verizon kind of shooting itself in the foot with a "compromise" like this? After all. it's been trying to get Apple to make a CDMA iPhone for ages, once it's deal with AT&T is up. Under it's own plan, it still wouldn't get to have an iPhone. I don't really have a problem with exclusivity agreements in principle. In the case of the iPhone (and really that's what it's all about--nobody was complaining about exclusivity before it came along) the deal with AT&T has just forced every other company from LG to Motorola to Samsung to HTC to try to come up with that "iPhone killer". They haven't done it yet, but the more they try the better phones in general get. Also, these deals tend to have expiration dates. Apple's agreement with AT&T is up next year, I believe. At that point, it will have to be renegotiated. Apple will have to decide if whatever AT&T is paying them is more than what it would be making by selling the iPhone to other carriers as well--and if it's possible to keep up with the demand doing so would generate. Unfortunately, if AT&T shells out enough to make Apple stick around, it will probably have to jack up the price AT&T customers pay per month for all the neat things the iPhone will do. That rate already seems pretty high.