Verizon Defends Exclusive Handsets, Except for Small Carriers

Verizon Wireless is defending AT&T’s right to keep the iPhone to itself.

The company today announced a policy that it says will give small wireless carriers more access to phones that Verizon had the exclusive rights to sell. From now on, when Verizon strikes a deal with a manufacturer for exclusive sale of a handset, it will let any carrier with fewer than 500,000 customers sell the phone after six months.

There has been increasing interest in Congress over whether wireless carriers are hurting consumers by shutting out rivals from hot phones. Of course, the hottest phone right now is Apple’s iPhone, which is sold only by AT&T in the United States.

It may not be a consumer issue. Much of the political pressure on the issue is coming from smaller wireless carriers that worry that they are being shut out from all the cool phones by a giant carrier.

Verizon’s move, announced in a letter to Representative Rick Boucher, the Virginia Democrat who is chairman of a crucial telecommunications subcommittee, appears to address the concerns of the small companies while preserving the right of big carriers to offer handsets their rivals can’t.

The letter defends these arrangements:

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.

In other words, please don’t make Apple sell us the iPhone because we want to have the next cool phone and keep it from AT&T.