In what might be seen as a concession to pressure applied by Google and others, No. 2 U.S. wireless carrier Verizon Wireless on Tuesday said it will open its network to independent application developers and device makers by the end of 2008.
The move comes after months of wrangling between Verizon Wireless and Google over U.S. Federal Communications Commission rules governing an upcoming auction of valuable 700 MHz spectrum.
Google, which has made it clear that it is considering a bid for spectrum in the auction, has lobbied the FCC heavily for rule changes that will accommodate an open network where Google, if it gets the spectrum, will act as a wholesaler, and independent developers will be encouraged to offer retail services.
Verizon Wireless countered that such rule changes represented unnecessary government intervention in the business process. The company charged that the rules being suggested by Google invite the government to determine how carriers should run their businesses.
But Verizon Wireless' executives seemed to have had a change of heart, because their Tuesday announcement opens its network to independent developers and device makers--a move it seemed to be against just a couple of months ago.
"This is clearly a step in the right direction, but only time will tell if this is a true Road to Damascus kind of conversion or a more modified and limited conversion," said Janice Obuchowski, chairman of Frontline Wireless, a Greensboro, North Carolina-based consortium of investors. The Frontline group also plans to bid in the 700 MHz auction and do basically the same thing Google plans to do.
Verizon Wireless said it will publish interface standards early next year for new devices connecting to its network, and independent developers or device makers will have to meet that minimum technical standard before they can attach any new devices to the network.
"We do not expect this to be a difficult or lengthy process and application testing will be the responsibility of the provider of the device and what applications are downloaded to the device is the choice and responsibility of the customer," Verizon Wireless CEO Lowell McAdam said.
Mr. McAdam in an obvious dig at both Google and Frontline Wireless, which both plan to use some of the spectrum licensed at auction for public safety use, said that independent developers and device makers will have access to "our entire nationwide spectrum not just a piece of spectrum that will be available for commercial use in 2011 or later."
But opening up a formerly "closed" network introduces a brand new, seemingly unwieldy, business paradigm in the U.S. involving both an open and a closed network business, but Mr. McAdam insisted that Verizon Wireless was not bowing to pressure from Google and Frontline Wireless.
"We've been looking at this for a very long time and we have seen that the expanding needs of customers demand multiple business models," Mr. McAdam said.
Analyst Sameer Mithal, senior principal at IBB Consulting, thinks that if Verizon Wireless is indeed bowing to outside pressure, it is doing so to its own advantage.
"Verizon Wireless has sixty-plus million subscribers and a huge head start over anybody involved in the open network business, and if you are a developer are you going to develop for Apple with one million subscribers or Verizon with 60 million?" Mr. Mithal said.
Verizon Wireless, with a $20 million testing lab could also prove seductive to mobile application and device developers, Mr. Mithal said.
The network would be open to anyone who meets the basic technical standard and that would include Apple's iPhone, Mr. McAdam said.