Verizon's Concessions On Handset Deals Fail To Satisfy Rural CarriersVerizon's Concessions On Handset Deals Fail To Satisfy Rural Carriers

The Rural Cellular Association said the changes Verizon Wireless made to its exclusive deals don't go far enough.

Facing increased government pressure, Verizon said last week it would allow any carrier with fewer than 500,000 subscribers to offer devices it sells after a six-month exclusivity window. The RCA said the major flaw with this deal is that it only affects future handsets, and it excludes popular devices like the Verizon-exclusive BlackBerry Storm.

"The commitment does not go far enough to rectify the consumer and competitive harms caused by these agreements," the RCA said in a statement. "More than 180 million of the nation's wireless customers are unable to benefit from the new policy."

Exclusive handset deals are facing increased scrutiny from lawmakers, as the RCA and consumer advocate groups say these agreements limit choice and provide an unfair advantage for major carriers like Verizon, AT&T, and Sprint Nextel. Major mobile operators have argued that these deals represent a lot of risk because if the exclusive device isn't a success, the carrier will be left with excess inventories.

Additionally, AT&T has argued that its exclusive deal to be the sole U.S. provider of Apple's iPhone has benefitted consumers because it has brought "unprecedented competitive reaction." For example, to counter AT&T's iPhone, Verizon nabbed the Storm, Sprint is the sole provider of the Palm Pre, and T-Mobile is the only carrier to offer the T-Mobile G1.

AT&T likely will not adopt a similar exclusivity deal as Verizon because the iPhone has been the main driver of new subscriber growth over the last two years. AT&T is reportedly pushing to extend its iPhone exclusivity, but rumors suggest Apple will eventually bring an iPhone-live device to Verizon.

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