Tuesday, November 27, 2007


Verizon "Tears Down the Walled Garden"

I still think it's huge and wonderful that Verizon has announced the opening of its wireless network. Harold Feld outlines most of the reasons why, but here's my list:

1. Apple not only got beat up for tying the iPhone to AT&T, but it also seems to have a real mismatch on its hands. AT&T is causing Apple some real business problems. Even the U.S. Congress beat up Apple. And the European Commission is giving Apple a hard time too.

2. Verizon didn't have a good iPhone competitor.

3. Google's Android, aka GPhone, is getting some big attention, e.g. from T-Mobile and Sprint. And Google looks like it will be a serious bidder in the 700 MHz auctions.

4. Then there's OpenMoko and Nokia's experiments with open handsets, e.g, the N800 and the N95.

5. Tim Wu's Wireless Carterphone paper was tactically brilliant to point out that the Four Freedoms didn't apply to wireless broadband. And it was perfectly timed.

6. Verizon Wireless made a big strategic decision not to pursue Wi-Fi as a business. And it is getting hurt by it, and it sees that its own spectrum licenses will become more valuable by adapting Wi-Fi's openness.

7. As big telcos go, Verizon is less clueless than most. Not only did it do FIOS while other telcos were being more "expedient," but also Dennis Weller, its Chief Economist, made a non-discrimination pledge at in public at TPRC a couple of years ago. In addition, while some of its Terms of Service are egregious, others are downright reasonable, as I wrote here and here.

8. Maybe Verizon realizes that networked value is like a handful of sand -- if you squeeze real hard, it runs between your fingers.

Feld says that Verizon's move is not due to the "magic hand of the marketplace" so much as to the very visible hand of impending regulation. If you interpret "the magic hand of the marketplace" expansively, so it means, simply, that open networks are good business, maybe it is bit more "magic hand" than Harold thinks. If you interpret it even more expansively, then the pro-neutrality movement is another manifestation of the magic hand too . . . that's stretching it.

In any case, I think this is a huge event, a sea change, approximately equivalent to when Dan Hesse, when he was head of AT&T Wireless, instituted AT&T OneRate -- destroying the domestic distance-minutes billing paradigm for wireless -- and fixed line long distance followed. Huge. Kudos to Verizon, and to everybody from Android to Wu who helped Verizon find the way.

Yes, we still need regulations mandating openness. Surely Verizon Wireless will no longer object.

UPDATE: Om Malik says, "My Inner Cynic says don't believe the hype." Thanks Jorge!

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David, I am publishing a book on Collective Intelligence, and want to include a piece from Jock Gill on open spectrum, and a short piece from you (4 pages, 1.8 margins all the way around) that fleshes out this post. You can see the ugly book at www.oss.net/CIB. Mark Tovey is the editor, it goes to the printer end of December for 1 February release on Amazon, and also free online as one pdf per chapter. Creating a new model for books--tokens on Amazon, free online.

Robert Steele bear@oss.net
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