Giving them what they want: Verizon Wireless goes ‘any device, any app’: Embrace of open access stands as significant change in VZW position

Verizon Wireless announced this morning a major shift in its position on non-carrier-offered devices and applications, saying it will begin activating any device that meets a “minimum technical standard” and will allow “any application the customer chooses” to be used on the devices. The carrier said the new option will be available to customers throughout the country in the second half of next year.
Verizon Wireless’ embrace of open-access principles precedes the January start of the 700 MHz auction, which includes an open-access provision. It also follows the settlement of a recent class-action lawsuit over handset locking.
However, Verizon Wireless President and CEO Lowell McAdam declared that the decision had nothing to do with discussions in Washington or the 700 MHz auction, but was sparked instead by wanting to give customers what they want as well as leverage a competitive advantage that the company believes it will get by opening the network.
“This is a transformation point in the 20-year history of mass market wireless devices-one which we believe will set the table for the next level of innovation and growth,” said McAdam. He added that the company “is not changing our successful retail model, but rather adding an additional retail option for customers looking for a different wireless experience.”
Verizon Wireless said that while it expects most of its customers to prefer its current model of “full service,” it is “listening . to a small but growing number of customers who want another choice without full service” but still want to have access to Verizon Wireless’ network.
Verizon Wireless said that early next year it plans to publish technical standards for developers to design products that will interface with the carrier’s network. The carrier said that “any device that meets the minimum technical standard will be activated on the network.” The carrier also plans to host a conference to explain the standards and get input from the development community on “how to achieve the company’s goals for network performance while making it easy for them to deliver devices.”
VZW CTO Dick Lynch said in a conference call that the testing would focus on basic, network-level functions-not the more rigorous application-layer and user-interface testing that Verizon Wireless currently requires and will continue to require for the applications and devices it sells as part of its full-service model.
“If somebody has the technical capability of building a device on a breadboard in the basement and they want to bring it to us to be tested, the philosophy and structure of this program says, ‘Have at it,’ ” Lynch said.
The open-access option will be available on Verizon Wireless’ 1x, EV-DO and EV-DO Rev. A systems.
However, the device providers will be on the hook for the fees related to the testing of the device. Lynch did not specify what those fees will be, except to say they would be “surprisingly reasonable” given that many would expect such fees to have “many, many zeros on the back.”
Testing and approval will take place in a Verizon Wireless lab, which, according to the operator, “received an additional investment this year to gear up for the anticipated new demand.”
Also, company executives confirmed that as long as the phones meet the carrier’s CDMA standards, device vendors can choose whatever operating system they wish. Device vendors can also elect to support Java and Java applications. Verizon Wireless currently supports only BREW-based applications.
“It is not ours to make that determination,” said Verizon Wireless CMO John Stratton. “It will be up to the provider.”
Lynch said that Verizon Wireless had not made any changes to its network in anticipation of additional customers.
How Verizon Wireless’ announcement will affect its rivals is unclear. AT&T Inc.’s stock remained relatively unchanged following the announcement, while Sprint Nextel Corp.’s stock was down around 2%.
Verizon Communications Inc.-a parent company of Verizon Wireless-saw little changes in its stock price after the announcement; Verizon Communications’ stock hovered at $44 at midday.