Cellular South's Cease and Desist Letter to Verizon Wireless

Writer's Direct Dial
703-584-8661
E-Mail: dnace@fcclaw.com

June 17, 2009

John T. Scott, III
Vice President & Deputy General Counsel
Verizon Wireless
Suite 400 West
1300 I Street, NW
Washington, DC 20005

Dear Mr. Scott:

We are writing to ask that Verizon Wireless ("Verizon") cease and desist from making factual misrepresentations regarding the agreement that Verizon made with the Associated Carrier Group (ACG) regarding the limiting of Verizon's exclusive agreements with both LG and Samsung on wireless handsets to no more than six months.

According to numerous published reports, Verizon spokespersons are alleging that Cellular South has failed to acklowledge this agreement publicly and before Congress, when in fact, we believe that Verizon abrogated the agreement in an attempt to further consolidate its market power in the wireless voice market.

Specifically, the agreement between Verizon and ACG members was intended to provide ACG members with access to devices and specifications prior to the Verizon launch. As you know, such access to a device and its specifications, well prior to Verizon's launch, is required for ACG members to properly configure their networks so that they can bring the product to the market immediately after the six-month Verizon exclusivity right expires.

To our utter surprise, however, Verizon changed the terms of this agreement almost immediately after it was signed, in a way took the intent of the agreement and stood it on its head. More specifically, several weeks after the agreement was made (during which the parties began working under terms of the agreement) ACG was notified by Verizon that ACG members could not have access to the devices and specifications until after Verizon releases a device to market to the general public.

Thus, by so altering the terms of the agreement to give ACG members access to the device at the same time it is made available to the public, Verizon is in fact agreeing to very little more than a ruse. And because it can take nine months or more for a carrier to reconfigure a network and device to work on its network, Verizon's unilateral change in terms effectively extends its market-power-exclusivity arrangement to at least nine months.

Accordingly, we would ask that your spokespersons cease and desist from misrepresenting the agreement with ACG when in fact Verizon unilaterally altered the terms to extend its period of handset exclusivity and prolong the anti-consumer consequences that such exclusivity entails.

Sincerely,

David L. Nace