Behind the Scenes at the Apple iPad/Verizon Talks

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Published February 02, 2010

| FoxNews.com

I found myself scratching my head last week as Apple CEO Steve Jobs announced carrier partnerships for the newly unveiled iPad.

"AT&T is providing the service," Jobs announced, as murmurs ran around the room. "AT&T is throwing in free use of their Wi-Fi hotspots in the U.S. with this. No contract. And you can cancel anytime."

But where was Verizon? I thought it would be both carriers. As I reported before the event, Verizon appeared to be on board and was even working out the final details of the partnership. While refusing to comment on the Apple tablet, Verizon spokesman Jeff Nelson said last week that the company's network was built with these "types of devices" in mind -- a clear slap at AT&T's network, which Apple was forced to defend in its quarterly conference call last Monday.

What happened to cause this rift in the space/time continuum? According to sources at Verizon, the company is more interested in the lucrative iPhone contracts. But the two companies are still "very much talking and plan to bring an iPhone and an iPad" to the CDMA network this year, following the expiration of AT&T's exclusive agreement with Apple.

Still talking? These guys have been talking since 2006 before the launch of the first iPhone! Stop talking already and consummate the darn relationship -- or walk away. When asked for comment about these on-going talks, Verizon spokesman Jeff Nelson said, "no comment," so officially the company isn't talking about the talks.

Of course "still talking" doesn't mean anything. It would be ridiculous to think these companies aren't still talking: that's what big companies do. To be fair, these talks are very much in keeping with reports from Wall Street analysts who expect some Apple/Verizon partnership announcement this year. But I'll believe it when I see it.

Technology strategist Michael Gartenberg thinks it isn't coming any time soon, however, noting that even Verizon has acknowledged that its existing CDMA network architecture is obsolete. "Once Verizon moves to LTE, which is a next-generation wireless tech, it would make a lot more sense for Apple to partner."

Even if Verizon gets the iPhone or the iPad, it doesn't look as though AT&T will be going anywhere. A deal will just mean more choices for consumers.

According to my sources, AT&T was able to outbid every other GSM carrier with a $14.99 or $29.99 plan that gives customers 250MB or unlimited data, respectively.

I asked AT&T spokesman Mark Siegel if his company outbid T-Mobile and Sprint. He refused to comment, noting only that "we're very happy that Apple selected AT&T to be the main carrier partner on the iPad."

I must say I am impressed with AT&T's iPad data pricing structure -- and I wasn't alone given the amount of applause during the Apple event.

"I think the pricing speaks for itself," said AT&T spokesman Mark Siegel. "Apple sets the price for these plans and the $29.99 unlimited plan is comparable to our data plans for other devices."

Comparable? Actually AT&T brought its A game, offering much cheaper options for consumers than currently exist for netbooks. Consider the following plans: 

HP Mini 110 -- $60 for 5GB of monthly usage, or $35 for 200MB per month

Acer Aspire One -- $60 for 5GB of monthly usage, or $35 for 200MB per month

Apple iPad -- $29.99 for unlimited data and $14.99 for 250MB per month, with no contract, and you can cancel anytime

I'm no math wizard, but those numbers are clearly different.

To be honest I don't know that I care about a Verizon iPhone/iPad given AT&T's massive investment in building a more robust 3G network. Besides, speed tests by Engadget and others repeatedly show it has a faster network than Verizon, and reports last week indicated that AT&T is closing the gap on dropped calls.

In fairness, my iPhone dropped a few calls in San Francisco last week prior to the Apple event, and I had a difficult time sending text messages over AT&T's data network.

Ironically, journalists at last week's congested Apple event reported that Verizon's network screeched to a halt. I was able to send photos and video from my iPhone back to Fox over AT&T's 3G network without a problem, while Verizon Mi-Fi cards around me were unusable. One journalist remarked "I couldn't even send an e-mail on Verizon."

With Valentine's Day quickly approaching maybe we'll finally get some closure on this thorny relationship one way or the other. But until then, the talking continues.

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http://www.foxnews.com/tech/2010/02/02/exclusive-scenes-appleverizon-talks