Verizon changes the tune


The tune around open-access, that is.
After suing the FCC around the spectrum-auction rules, the wireless carrier decided to reverse itself and embrace an open network. This is an unusual move, because until now telcos have jealously guarded access to their channels. Not content to passive data pipes over which other people build higher-margin services, they have been trying hard to move upstream in the value chain. Keeping tight control over the devices that can connect to the network is one way to fend off any potential competitors in this already difficult uphill battle.

Verizon points to the innovation that will result from lower barriers to entry and this story makes for very good PR on paper. Not that the business side will necessarily suffer from this act of altruism– if the vision is realized, the new devices and services will drive more customers who will still be paying Verizon $$$ for air-time. In that sense the only downside is loss of incidental revenue from sales of phones and other equipment. But considering these were heavily subsidized to start with, the only collateral damage may be the close relationship with Motorola, Nokia, LG and other manufacturers who will lose their lock-in effect on Verizon customers.

That said, until other telcos allow their customers to use existing devices with a competing network– something they have no incentive for and unlike Europe, no legal obligation to provide by unlocking phones– this is still one-hand clapping. Any increased customer choice will have to come from new devices yet to be designed, not the potential to use an existing device from another provider with the network.
cemp

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