Verizon Wireless' open access move: The historic details

There was more than a subtle implication that this move could instantly change the economic model for companies wishing to deploy devices in the US that may not have the manufacturing capability to be chosen by a major network like Verizon. That includes companies that produce handsets using the Android platform advanced by Google.

"I would say that the Google Android OS, the Microsoft [Windows Mobile] OS, the Palm OS, [or] any number of different operating systems and other contributing technologies, could be utilized by a provider to create a device and application set and bring it onto our network," said CMO John Stratton. "There's no reason to preclude it."

CEO McAdam added that when his company makes a bet on a full-service device it wants to offer its customers directly, "if it's not going to sell hundreds of thousands of devices, it's very difficult for us to get our heads around it, because of our scale. With this approach, with only the testing that needs to be done in Dick's labs, it doesn't matter whether it sells five devices to us, or whether it's 500,000 devices. It encourages anyone who wants to get into the game, to get into the game."

If someone wants to bring to the Verizon Wireless network a device from another CDMA provider, McAdam said, all that's required for it to be welcomed is to meet the minimum standards. Sprint customers, he later said, would be among those welcomed. But here is where VZW avoided a touchy issue: how carriers such as Sprint are likely to respond, especially when carriers have notoriously contended (whether this is legally accurate or not) that the phones they sell are subsidized for customers by way of long-term service contracts.

"This philosophy is just similar to local number portability," McAdam responded to a question from BetaNews on this topic. "The same arguments were made when we debated that within the industry. So now a customer who's paid for their handset should be able to bring it between carriers; and if it's CDMA, that's exactly what we're suggesting."

Thus the question is bound to come up: Will customers of Sprint, Alltel, Qwest, and US Cellular -- all of which operate CDMA networks -- find themselves being told by their existing service providers that they don't really have the right to move their phones to Verizon Wireless? While legal precedent may be on VZW's side of this issue, it's difficult to imagine its competitors giving up its customers without some kind of fight.

While VZW execs pledged to be very clear going forward, it's quite clear for the nonce that the company has yet to come up with a marketing program around this concept. In fact, it doesn't really have a name; McAdam tossed "open access" out there as a jump ball, and both McAdam and Lynch referred to it as "bring-your-own, so to speak."

What also is not known is the price. But what we do know today is that VZW intends to obtain some revenue from two sets of parties: first the end customer, although the amount and terms of contract VZW execs declined to reveal at this time. Second is the device manufacturer, which VZW execs confirmed today would be charged some fee.

CTO Dick Lynch provided only a few details: "The provider of the device, when they bring it to the lab, we'd have some fee that they would pay. I think it's going to be surprisingly reasonable, as I'm sure many of you have assumed that it's going to have many, many zeroes on the back. Not true. It'll be certainly very reasonable fees, and we would expect that essentially it's for professional services rendered."

The technical specifications for network interfacing will be revealed during a conference event that will take place sometime in early 2008, CEO McAdam said, though the precise schedule has yet to be determined. Testing in CTO Lynch's labs will begin at that time, and then availability of Verizon Wireless service to "bring-your-own" customers will begin sometime in the second half of the year.

Customer service for the third-party device, McAdam stated, including applications support and troubleshooting, will be the sole responsibility of the device manufacturer. However, customers would be expected to call VZW's support to verify connectivity for their device.

At one point, McAdam touched ever-so-tangentially upon the fact that his company is planning its 4G services rollout. "We believe this move sets the table for the next big leap in wireless growth and innovation," he said. "Soon we will be advancing our network to its fourth generation technology. We expect new network capabilities with higher data speeds and throughput performance to usher in a whole new era of wireless devices and applications."

By saying that, the CEO naturally flung the door wide open for questions -- probably intentionally -- about whether open access would at some point extend to 4G systems. One set of answers came in a kind of good cop/bad cop fashion, first from CTO Lynch who said his company had yet to make that decision, followed up by CEO McAdam who said he's ready to accelerate the pace of 4G. It was a guaranteed definite maybe.

"Clearly this is a whole new model, a whole new paradigm, not just for Verizon Wireless but within the entire wireless industry," the CEO pronounced. "So why are we doing this now? Well, I can tell you we've been looking at this for a very long time, we constantly monitor market forces, and have seen that the accelerating pace of innovation and the expanding needs of customers demands multiple business models. This additional alternative is something that some of our customers, and some of our competitors' customers, have told us they want. They don't need the full-service offering; they want another option, but they want it on the Verizon Wireless network. We believe it makes good business sense at this time in our evolution."