Does Verizon Stand to Benefit From the FCC's Probe?

attcoverageThe FCC’s probe of cell phone contracts and exclusivity deals will reportedly focus on markets where the iPhone and the Palm Pre aren’t available — that is, where AT&T and Sprint don’t have service. FCC chairman Julius Genachowski told Bloomberg, “There are markets in the country where if you wanted an iPhone, if you wanted a Pre, you couldn’t get it — from anyone.” Indeed, a look at AT&T’s coverage viewer (see image) shows large chunks of the country that don’t have access to the carrier’s network; ditto for Sprint. So is Verizon onto something with its approach, which allows smaller carriers — including those that focus on rural areas — access to its “exclusive” phones?

Two weeks ago, Verizon changed its policy around exclusivity arrangements, agreeing to limit them to a maximum of six months, and to give smaller carriers (like those that focus on rural areas) immediate access to its “exclusive” phones. At the time, Stacey wrote: “These concessions on exclusivity are likely a response to heightened federal scrutiny around” handset deals. Aha! Putting two and two together, Verizon’s policy changes are a nearly perfect response to the concerns that Genachowski voiced above — and, as Stacey pointed out, puts Verizon in an excellent position to point fingers at the “anti-competitive practices” of its competition. Of course, giving up long-term exclusivity deals is easier for Verizon than its competitors because Verizon doesn’t have an exclusive deal on any hot phones like AT&T and Sprint do, with the iPhone and Palm Pre, respectively.

(Image courtesy of AT&T)

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