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Verizon Wireless 'Opens' Up Before It's Forced To

Verizon Wireless is promising to open up its network to a variety of mobile handsets it doesn’t sell – a move it’s making before government regulators can beat the industry to the punch. 

According to the wireless carrier’s announcement Tuesday, it will "provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications not offered by the company" before the end of 2008.

Verizon Wireless said it will publish technical standards for developers to design products to run on its network early next year. "Any device that meets the minimum technical standard will be activated on the network," the company said, after being tested and certified in a $20 million lab.

The move is clearly intended to forestall new regulations regarding "open" access. Dial back to late October, and here’s what Verizon Wireless vice president of corporate communications Jim Gerace had to say on the issue in a blog post on the company’s site, in a response to an essay by Wall Street Journal technology columnist Walt Mossberg, who had likened big mobile carriers to "Soviet ministries":

The Wall Street Journal article (“Free My Phone,” Oct. 22) urges “government action” to “free” a vibrant handset marketplace.  Put aside for a second the fact that in less than three years U.S. operators have introduced over 2,500 devices.  The Journal makes an increasingly popular but mistaken assumption that the European government-mandated model of unlocked handsets means better consumer choices. 

Let’s start with the European experience.  Viruses and Trojans are part of the unlocked handset experience.  Just imagine children’s mobile phones receiving some of the indecent messages that come into e-mail boxes everyday.  “Open” devices simply lower standards. 

In announcing it will voluntarily "open" up its network, the wireless carrier may have learned a lesson from cable. The cable industry is now in another round of fighting consumer-electronics companies to provide "open" access to third-party TVs and set-top boxes, using a schema proposed by the CEA. If the FCC goes along with the CEA’s DCR+ proposal, cable lobbyists warn, it will cost the industry hundreds of millions of dollars to develop and deploy.

The CEA has rejected cable’s preferred standard (OpenCable) for providing access to two-way cable services as too cumbersome. It remains to be seen whether Verizon Wireless’ proposed open standards will satisfy those same industry players.

And, of course, another big reason for the Verizon Wireless "open" gambit is Google’s Android, an initiative that promises to provide open-source software for mobile phones. The Google-led Open Handset Alliance – whose 34 members include Sprint Nextel, T-Mobile, Motorola, Samsung Electronics, HTC and Qualcomm – has released the software that will, its backers claim, unleash a myriad of new mobile Internet applications and devices.

As the New York Times notes, many details of Verizon Wireless’ plan have yet to be worked out, including the cost of service and what rules would apply.

Some observers were unimpressed, characterizing the announcement as more of a P.R. stunt than an industry-changing shift.

ThinkEquity Research analyst Anton Wahlman wrote in a research note Tuesday: "Our takeaway from the Verizon conference call about the ‘any apps, any device’ announcement is that while this is obviously a step in the right direction, it is much ado about nothing. We did not hear anything in this announcement that said anything except that Verizon’s CDMA network should start to function (almost) like GSM networks have done from the beginning, in 1992. We find this announcement at the same time hysterical, and also a testimony to Verizon’s PR machine that this is somehow a big deal for the industry." 

Still, Wahlman noted, the move represents a change of strategy for the wireless carrier. "In the past, Verizon has fought ‘alien’ applications vigorously at times," he wrote, adding that other carriers like AT&T and T-Mobile that use GSM technology have far more open to third-party applications.