Why Verizon Went Open & What It Means
The about-face taken by Verizon Wireless today when it said it will open up its network and platform is, at first blush, a good thing for consumers and developers. But I just got off the company's conference call, and there are certain details that have left me with eyebrows raised.
Context & Ripple Effects
The announcement reverses the posture GigaOM documented in early 2006, when Verizon's contract terms and customer treatment drew 'unnecessary roughness' comparisons — the same carrier now says customers will be able to run any application on any compliant device across its nationwide network starting in 2008 under an Open Development Initiative.
The timing tracks the 700MHz spectrum fight: Verizon Wireless pursued a legal challenge against the FCC's open-access auction rules through October 2007, and the about-face lands weeks after that effort collapsed. The story traveled widely the same day — picked up by the New York Times' Bits blog alongside Verizon's own 'Any Apps, Any Device' release — though the analyst briefing left GigaOM flagging undisclosed details on exactly how open the platform will be.
First-order effects
- Independent developers and device makers gain a path onto the largest US wireless network without carrier approval for handsets or apps once the 2008 program launches — provided Verizon's unpublished technical and business rules prove workable.
- Customers locked into Verizon contracts get a credible route to third-party hardware, pressuring the carrier's own handset-attachment economics just as it pushes new smartphones into the holiday season.
Second-order effects
- AT&T and Sprint face pressure to match an 'any apps, any device' stance or cede the developer-and-enthusiast segment, turning openness from differentiator into table stakes among national carriers.
- Handset OEMs and mobile software startups gain negotiating leverage: with two of the top US carriers potentially competing for open devices, the traditional exclusivity-deal pricing model weakens.
Third-order effects
- If the pattern holds, the carrier moat shifts from controlling which devices touch the network to owning the network itself and the certification layer around it — the difference between nominal and usable openness becoming the battleground regulators and consumers will have to police.
- The FCC's open-access conditions attached to spectrum auctions emerge as the forcing mechanism for US carrier behavior, with the 700MHz rules serving as the template carriers comply with only after litigation fails.
The trend: US wireless carriers are being pushed by spectrum-auction rules from walled-garden gatekeeping toward open-network commitments whose real terms, not announcements, will decide whether openness is usable.