Rural U.S. carriers unimpressed with Verizon offer

A sign of Verizon Wireless is seen at its store in Westminster, Colorado April 26, 2009.

WASHINGTON (Reuters) - The Rural Cellular Association, whose members include about 100 small and medium-sized carriers, said on Tuesday it was encouraged by Verizon Wireless's offer to limit new exclusive handset deals but the offer was inadequate.

Under pressure from U.S. lawmakers and smaller carriers, Verizon Wireless said last week that it would limit new exclusive handset agreements to six months, after which it would allow wireless providers with fewer than 500,000 customers to service the devices.

"While RCA is encouraged by Verizon Wireless' most recent exclusive handset proposal, RCA will continue to pursue modifications to the policy," the trade group said in a statement.

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

The group also noted that the offer, since it specifies new handset deals, would exclude Verizon's exclusive arrangement with the Blackberry Storm, by Research In Motion Ltd.

Verizon Wireless is a venture of Verizon Communications and Vodafone Group.

Verizon made the offer after reports that the U.S. Department of Justice's antitrust division was looking at whether major telecom companies, like Verizon and AT&T, abused their market clout.

Handset deals have been the center of some lawmakers' concerns about whether the practice hinders innovation and competition. The deals include AT&T Inc's exclusive U.S. rights to Apple Inc's iPhone and Sprint Nextel's deal with Palm Inc's for the Pre.

Verizon shrugged off RCA's criticism. "No individual company has to accept our offer. They don't need to accept the offer," said company spokesman Jeffrey Nelson.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)