Verizon Wireless' Neutrality 'Offer' is Neutered

A Google News search on this week's neutrality announcement by VerizonWireless showed hundreds of articles and blog entries, most overwhelmingpositive in their praise of the wireless carrier. But don't be fooled:Verizon Wireless wants to curry consumer favor, and what it's offering withits 'Any Apps, Any Device' is really no gift at all.

Verizon Wireless' first 'offer': "technical standards the developmentcommunity will need to design products to interface with the VerizonWireless network". Are CDMA standards new? 3GPP2, the global standardsbody for CDMA technologies has been around for years. And if someone claimsthat the 3GPP lacks down-in-the-trenches relevancy, the CTIA performstesting plus there's the CDMA Certification Forum. Even if Verizon Wirelessdoesn't already have its own detailed standards, they definitely rely onthose from standards bodies, associations, and third-party testing companies(e.g. NEWS IQ and Intertek). You can be sure that manufacturers of CDMA products arewell aware of Verizon Wireless' requirements, after all, they're looking tomake sales, not dangle trinkets in a carrier's face. In fact, VerizonWireless has been so detailed in its requirements that some phone models hadspecific Bluetooth features disabled, which led to lawsuit which theysettled.

There's an additional but more subtle level of irony in the press release.From the language it's clear that consumers are part of its intendedaudience, but consumers aren't in the position to pay the money to get theirphones tested, not to speak of designing and bringing new devices to market.This 'offer' is also not going to be the catalyst that spurs a group ofentrepreneurs to create a new device. The existing handset and chipsetmanufacturers dominate the mobile device market, and anyone looking to buildsome kind of new device will more likely to talk to a component vendor suchNovatel Wireless or Sierra Wireless than design something on their own.Verizon's "bring your own device" offer means nothing to the consumer, whowill not be able to elicit anything more from the mobile device ecosystem inthe future than they could do today.

Verizon Wireless' second 'offer' around software applications is just ashollow. Verizon Wireless has never restricted applications per-se. It'strue that BREW created a somewhat closed application ecosystem, but featurephones also had a limited user interface and an operating system withlimited capabilities. With the rising market share of smartphones withlarger and color screens, and perhaps a keyboard or touch screen, cellulardata services, and running on mobile OSes such as Windows Mobile 5 or 6,Symbian, and RIM, significantly more advanced and complex applications arepossible. Developer toolkits for these mobile OSes have been around for along time and customers can install the applications on their own. Wirelesscarriers around the world are giving up trying to created a walled gardenaround applications, and real enterprise applications ran on smartphones,which were never closed. Again, Verizon Wireless doesn't offer anything tothe consumer that they couldn't already have with the appropriate phone.Understated but still significant is that CDMA-based devices are bit morecarrier inflexible than their GSM counterparts. Unlike GSM devices, where aSIM card (a removable card which associates the customer to their service)can be moved freely from one device to another, CDMA devices require carrierassistance and approval. For example, even if a customer purchased andbrought their own CDMA-compatible phone to a CDMA carrier such as VerizonWireless, Sprint Nextel, or Alltel, the operator might not associate thephone's ESN (Electronic Serial Number) to the account if it isn't on their'approved' list. What Verizon Wireless has done now, at the most, is bringparity with the GSM carriers such AT&T and T-Mobile.

Verizon Wireless' announcement is more about market positioning than trueconsumer friendliness. Verizon Wireless is no media slouch and is takingthe opportunity to pump up its media image.

Although the media fervor over net neutrality has quieted down from the peakit reached several months ago when there were Congressional hearings on thematter, the phrase has already become part of popular vocabulary. SprintNextel, their primary CDMA competitor, has heavily communicated their ownplans for device and application neutrality on their WiMAX network.Although Sprint's own hardware-neutral offer is suspect for the same reasonsas Verizon Wireless, it was a smart way for the struggling carrier to earnpublic support and enthusiasm for a yet unbuilt wireless network. No otherCDMA operators have made similar statements about their network, so bycoming out first Verizon Wireless appear to be the shining knight on a whitehorse.

Second, Google's own plans regarding Android and the associated Open HandsetAlliance have garnered significant positive press, and Verizon Wirelesslikely wants to ride the wave and benefit from the public good will thatGoogle has generated.

Third, this move may also be in preparation for its plans in the upcoming700 MHz auction, where one of the bands requires open devices. Although ithad protested the open access requirement even a few short weeks ago, itappears Verizon Wireless is trying to make lemonade out of a lemon.Fourth, the U.S. Patent and Trademark Office issued a ruling just over ayear ago essentially allowing consumers to unlock their phones. Why shouldVerizon Wireless try to fight against consumer opinion? Better to embraceit and look like a hero.

Fifth, just a few days ago the Federal-State Joint Board on UniversalService issued their report to the FCC, which recommended, among otherthings, to put a fixed cap on Universal Services funds allocated to wirelesscarriers. This announcement helps it score points for the wirelessindustry, as something worth supporting (and subsidizing).

Don't be flattered by Verizon Wireless' announcement -- it's not offeringanything that it isn't doing today or that's accessible to consumers.