Verizon Wireless loosens grip on handsets

Letter to Congress said company OK with small carriers using its exclusive mobile phones — after six months.The so-called walled garden of the wireless world has lost yet another brick. On Friday, Verizon Wireless president Lowell McAdam issued a letter to Congress stating the company is open to smaller wireless carriers selling phones that have thus far been exclusive to the Verizon Wireless network.

In the letter, addressed to Rep. Rick Boucher (D-Va.), chairman of the Subcommittee on Communications, Technology and the Internet, McAdam said Verizon Wireless, in the Basking Ridge section of Bernards, will begin giving access to exclusive wireless phones and devices to carriers with fewer than 500,000 customers. Effective immediately, Verizon Wireless said it would limit its exclusivity agreements on devices to six months as they pertain to the smaller carriers.

McAdam described the six-month period as a reasonable time for the company to recoup its investment on the products it procures.

The move by Verizon Wireless follows arguments raised by U.S. Sen. Herb Kohl (D-Wis.), who asked the Department of Justice and the Federal Communications Commission this month to look into the exclusivity agreements between wireless handset makers and carriers. Kohl raised concerns on future pricing of cell phones, with large carriers holding sway over access.

Verizon Wireless and its more comparably sized rivals AT&T and Sprint , often use exclusive deals on the latest feature-rich phones to attract customers to their network. For example, the LG Chocolate is an exclusive to Verizon Wireless. The only official way to use the iPhone from Apple Inc. is on AT&T’s wireless network.

Verizon Wireless said it was approached in February by 24 smaller wireless carriers that requested the company reconsider its long-term exclusivity deals with handset makers Samsung and LG. McAdam said the company agreed to do so for those companies. Friday’s letter opens the field to all smaller wireless carriers in the country.

Email João-Pierre Ruth at [email protected]