The speculation has been ongoing for longer than I care to remember about what carrier will be next to get the iPhone. Not a single carrier has been left out from the rumor mill, and all the conjecture has been based on the assumption that AT&T and Apple had a two or three year contract that was fast approaching its end date. At the very beginning of it all, USA Today was reporting that AT&T and Apple signed a five-year exclusivity contract for the iPhone, leaving the exclusivity deal between the two running until sometime in 2012. However, until now no such confirmation of that report has been made.
Yesterday, Engadget - after doing some digging - managed to uncover court documents from a class-action lawsuit filed against Apple. Whoever filed the lawsuit claimed that Apple and AT&T were conspiring to create a monopoly with their exclusivity deal by having consumers sign up for a two-year contract and then forcing them to re-up for another three years when there were no other options. The case is ongoing, however, arguments made by Apple's legal team effectively confirm the five-year deal.
"The duration of the exclusive Apple-[AT&T] agreement was not 'secret' either. The [plaintiff] quotes a May 21, 2007 USA Today article – published over a month before the iPhone's release – stating, "AT&T has exclusive U.S. distribution rights for five years-an eternity in the go-go cellphone world."
"[T]here was widespread disclosure of [AT&T's] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years... Moreover, it is sheer speculation – and illogical – that failing to disclose the five-year exclusivity term would produce monopoly power..."
Now, before you get all hot and bothered, keep in mind that deals like this come with more caveats than you can possibly count on one hand. There's a good chance that if AT&T so much as sneezes in the wrong direction, that Apple has the right to pull out. Both TechCrunch and Engadget have pointed out that the two companies must have come together to reach an agreement on iPad plan pricing, and that there's a good chance the new iPhone (and their existing exclusivity contract) was part of the discussion--suggesting that nothing Apple and AT&T have in writing is set in stone
Another idea I'd like to throw out there is the possibility of a base contract with option years. This is how the government does business to protect themselves. Perhaps the original agreement between the two companies had Apple locked-in to AT&T for two years, with three available option years to exercise so long as AT&T keeps performing (and you can bet the specifics that define 'performing' are spelled out loud and clear). This type of agreement supports many of the varying rumors about the contract as it is technically a five-year contract, but can be broken down into less based on performance on AT&T's part. It also gives Apple the ability to change the terms after the first two years if they decide that going the one-vendor route isn't the best option (read: hello verizon).
So, where does this leave us? In my opinion, no better off than we were when we started. The only real change this makes is the knowledge that at one point there was a five-year agreement in place (with no detail of the agreement to speak of), but whether that contract is still in place, if its been amended or cancelled, no one seems to really know. TechCrunch reached out to AT&T to try and get some clarity, but the only thing they got was the following quote: “We have a great relationship with Apple. We don’t comment on the specifics of our relationship."
If you want to read even more of the nitty gritty, follow the source links below. And as always, please leave a comment, we're dying to know how you feel about this!