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Verizon Breaks iPhone Exclusivity; Paves Way for Smaller Carriers

in Mobile Broadband/Wireless by

NEW YORK, January 25, 2011 – Verizon announced earlier this month that it declined to sign an exclusive deal with Apple to carry the iPhone, opening the door for other carriers to introduce the popular handset on their own networks.

The new arrangement with Verizon breaks a three-year exclusivity deal between AT&T and Apple. The new iPhone runs on a CDMA network, which is incompatible with AT&T’s GSM network. In 2009 Senators John Kerry (D-MA) along with Roger Wicker (R-MS.), Byron Dorgan (D-N.D) had sent a letter of complaint to the Federal Communications Commission questioning the exclusivity arrangement made between AT&T and Apple.

In a statement released by Verizon, the firm explicitly called out the fact that – unlike AT&T – it did not want to enter into an exclusive arrangement. Sprint, T-Mobile, and MetroPCS also maintain CDMA networks and could potentially carry the iPhone.

Verizon, which is the largest CDMA carrier in the United States, has not typically entered into long exclusive agreements with handset makers. Since 2009, the company has maintained a policy of only agreeing to six-month exclusivity deals with manufacturers. Previously, after the exclusivity period, small carriers were able to negotiate with handset makers for access

While Verizon offers a nationwide network it does not physically cover every part of the country and allows small rural carriers to offer their customers the same handsets that Verizon is able to offer its customers

When the CDMA iPhone was announced, many smaller carriers hoped to be able to gain access to the popular smart phone.

“I am delighted that other carriers will have access to the CDMA iPhone, and it will not be an exclusive Verizon offer.” said Rural Cellular Association President and CEO Steven K. Berry. “Further, I seek Verizon’s support in encouraging Apple to make the iPhone and iPad available to all RCA members within six months of their release.”

Verizon responded to the statement by indicating that the firm had not signed an extended exclusive contract with Apple. It also encouraged the RCA to make a direct appeal to Apple for access to the handset.

In the past the firm had sent letters to handset makers supporting the ability of smaller carriers to gain access to handsets after the initial exclusivity deal had ended with Verizon. Even though no such deal exists with the iPhone, Verizon did ask Apple to contact the RCA to facilitate access to the handset for smaller cellular providers.

Berry stated that he hopes to be able to work with Apple in obtaining access for smaller carriers and commended Verizon for their previous exclusivity limitations.

Apple has contacted the RCA about obtaining the iPhone as a result of a request from Verizon.

Rahul Gaitonde has been writing for BroadbandBreakfast.com since the fall of 2009, and in May of 2010 he became Deputy Editor. He was a fellow at George Mason University’s Long Term Governance Project, a researcher at the International Center for Applied Studies in Information Technology and worked at the National Telecommunications and Information Administration. He holds a Masters of Public Policy from George Mason University, where his research focused on the economic and social benefits of broadband expansion. He has written extensively about Universal Service Fund reform, the Broadband Technology Opportunities Program and the Broadband Data Improvement Act

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