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7/20/2009
10:44 PM
Ed Hansberry
Ed Hansberry
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Verizon To Limit Device Exclusivity Agreements

Verizon is going to be shortening the time it keeps an exclusivity agreement for a particular device for the benefit of smaller cellular carriers around the country, namely those with 500,000 subscribers or less. That's good new for those that don't need a national carrier.

Verizon is going to be shortening the time it keeps an exclusivity agreement for a particular device for the benefit of smaller cellular carriers around the country, namely those with 500,000 subscribers or less. That's good new for those that don't need a national carrier.I sometimes forget there are more than four carriers in the US - Verizon, AT&T, Sprint and T-Mobile. There are a lot of people though that don't care if their carrier services anything outside of their hometown. What has been frustrating for them though is if they wanted a cool device, like the Blackberry Storm or Palm Pre. Carriers tend to try and lock up device exclusivity agreements so that users that want a given device will have to switch to the sole network that carries it. I am not sure of the number, but I'd wager thousands if not hundreds of thousands of people have switched to AT&T in the past two years just to get the iPhone.

These deals keep the big four battling with each other, but it crushes the little carrier who has no hope of ever getting a device exclusivity agreement of their own. According to the Wall Street Journal, Verizon will be self-imposing a limit on how long those exclusivity agreements apply to the little guy. Now, six months after the device is out, Verizon will work with the small carriers and allow them to carry devices. The other "big four" carriers will just have to tough it out.

Be forewarned though, those looking for a Blackberry storm on their local provider don't need to get too excited. This only applies to new arrangements, not existing ones.

"Any new exclusively arrangement we enter with handset makers will last no longer than six months -- for all manufacturers and all devices," Verizon Wireless CEO Lowell McAdam wrote in the letter. However, Mr. McAdam defended the practice of locking up phones with exclusive deals, and said the new policy wouldn't apply to existing arrangements, such as Verizon's exclusive deal to carry the BlackBerry Storm from Research In Motion Ltd.

According to Consumer Reports, this will only affect 5.6% of subscribers as the other 94.4% are either with the big four or are on regional carriers such as Virgin Mobile. We'll have to see if other carriers follow suit with similar arrangements.

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