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A Tech-Econ Mashup with a Libertarian Flavor

Verizon: Saying One Thing While Doing Another

When I blogged at OpenMarket last month about four US Senators’ probe into wireless handset exclusivity deals, I argued that exclusivity agreements between wireless carriers and phone manufacturers are good for both producers and consumers, and that they bring prices down and speed up innovation. Imagine my surprise when I read today that Verizon plans to limit its exclusivity contracts to a mere six months:

 In a letter today to key lawmakers on Capitol Hill, Verizon Wireless’ President and CEO Lowell McAdam announced “Effective immediately for small wireless carriers… any new exclusivity arrangement we enter with handset makers will last no longer than six months – for all manufacturers and all devices.”

How generous and selfless of Verizon, right? Actually, it turns out that the “small wireless carriers” that McAdam speaks of are companies with fewer than 500,000 subscribers. From PC World:

How many people do you know who use such companies? The top four U.S. carriers make up a whopping 86 percent of the market, according to research by the CTIA, a nonprofit wireless industry association. Even within that remaining 14 percent, the number of carriers with fewer than 500,000 customers on-board is miniscule at best; in fact, one report suggests only seven networks exist in America with subscriber bases below 7 million. Translation: This isn’t exactly something with wide-reaching impact.

Verizon didn’t get to be one of the leading wireless service companies by having idiots at the helm.  Nor by embracing a corporate motto of selflessness and caving to the pressure of uninformed public officials. Instead, they’re just playing the PR game: announce that we’re making a compromise, without really compromising anything. 

As for the idea that handsets shouldn’t be tied to certain carriers: Please. This is such a trivial consumer gripe. Big freaking deal, you subscribe to the wrong wireless carrier and now you can’t get a “crackberry.” Let’s change the rules for the entire industry – which has given us newer and better phones at even lower prices year after year – just so a few rural technophiles can get their hands on the latest new shiny toy.

And for the record, I could care less whether Verizon gets the iPhone or not.

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Filed under: Politics, Tech Biz, , ,

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Whenever you find that you are on the side of the majority, it's time to pause and reflect.
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