Next cell trend lets users hold the phone
The surprise announcement Tuesday could force other wireless companies to follow suit, which in turn would spur carriers to compete more aggressively on pricing and service. This could lead to cheaper and more feature-packed cellphones.
Kevin J. Martin, chairman of the Federal Communications Commission, said he envisions "an exciting new era in wireless technology for the benefit of all consumers."
"I continue to believe that more openness -- at the network, device and application level -- helps foster innovation and enhances consumers' freedom and choice in purchasing wireless service," he said.
Verizon may be committed to network openness, but its move was also guided in part by good old-fashioned self-interest.
Federal authorities are preparing to auction a coveted block of wireless spectrum: additional airwaves that would turbocharge Verizon's network for next-generation mobile services. Opening up to rivals' phones and applications is a condition set by the government for submitting bids.
Deep-pocketed Google Inc. has made no secret of its intention to bid for a big chunk of that spectrum, and the Silicon Valley search giant already is in bed with the likes of Verizon rivals Sprint Nextel Corp. and T-Mobile USA.
"Verizon has read the writing on the wall," said Harold Feld, senior vice president of the Media Access Project, a Washington advocacy group focusing on telecom issues. "The company desperately needs to win a huge amount of spectrum in the upcoming auction."
Verizon Wireless' chief executive, Lowell McAdam, called the spectrum play "hogwash."
"We don't pay attention to regulators and lawmakers," he said. "We pay attention to the marketplace."
A more competitive wireless market won't happen right away -- probably not until late next year. And it will target, at first, primarily those consumers willing to spend hundreds of dollars for their own handset, as opposed to having a cellphone whose base cost is largely subsidized by a wireless provider.
But in the long run, a shift to more open networks would result in lower handset costs as manufacturers -- not mobile carriers -- play a greater role in determining which features will be offered on their products.
Not all phones would run on Verizon's network. For example, the popular Apple Inc. iPhone runs only on the AT&T Inc. network, which uses a standard called Global System for Mobile Communication (GSM).
Verizon's network is powered by a technology called Code Division Multiple Access (CDMA). CDMA cellphones won't work on GSM networks, and vice versa. But greater network mobility could usher in a new wave of cellphones that work with both standards.
Whatever else, Verizon's policy switch came none too soon for Tom Underhill, a Yorba Linda commercial real estate broker. He used to be an AT&T customer but was dissatisfied with the carrier's coverage area. So Underhill, 67, gave his handset to his grandchildren as a toy and switched to T-Mobile. Lately, though, he said he's been unhappy with T-Mobile's service, even though he got a slick new Razr handset in return for extending his contract.
If Verizon offered better coverage and service, and if his Razr phone had the capability to run on Verizon's network, Underhill said he'd definitely be interested in switching over, even if that meant swallowing a T-Mobile termination fee.
"If a company can't cut it in service, they don't deserve to be able to tie you to them," he said of the current industry practice of linking specific handsets to specific networks.
Verizon said it would release its technical specs to developers early next year so they could make other handsets and applications work on the carrier's network. "Any device that meets the minimum technical standard will be activated on the network," the company said.