Cellphone Perestroika

As regular readers know, I have frequently attacked the U.S. wireless phone carriers for exerting near-total control over what phones, software and services American consumers can use on their networks. In fact, since 2005, I have dubbed the carriers “the Soviet ministries,” for inserting themselves between the producers of mobile hardware and software and the people who might want to use these products. My most recent essay on this topic, called “Free My Phone,” ran in The Wall Street Journal and here on Mossblog only last month. You can read it here.

So it’s only fair that I commend Verizon Wireless for its announcement this week that, starting in the second half of 2008, it will allow “any device” and “any application” to run on its cellphone network, without any restriction, or interference. The only requirement, Verizon says, will be that the devices–phones, computers, anything else–must meet a “very minimal set of technical requirements” to show that they can run on the Verizon network without damaging the network or other devices or services that run on it.

This new, open approach won’t replace Verizon’s current walled-garden system, with its heavy controls. It will exist alongside the current system, as a sort of parallel universe.

Still, this is potentially a huge step, a sign that perestroika has arrived among the Soviet ministries that rule the American cellphone industry. If Verizon Wireless does what it is promising, it could be even more significant than Google’s plan for an open cellphone operating system and its creation of a coalition of companies to support it. The reason is that anyone, not just the companies belonging to a particular alliance or group, should be able to build a phone, a data device, a software program or service, and run it on Verizon’s strong, fast, extensive network.

But, as the saying goes, “the devil is in the details.” And there are a couple of details of the company’s plan that could diminish the sweep and importance of its new commitment to openness.

First is the question of what Verizon means when it says a product must pass a sort of certification to run on the network. In a conference call explaining the plan, Verizon officials insisted that the testing and certification process would be much simpler and less onerous than the hoops companies must now jump through to get onto its network. They also promised the certification process would be “relatively short” and that the fees for certification would be “surprisingly reasonable.”

But until we learn the details next year, we won’t know if the certification process will be a mere technical formality, or a barrier to entry.

Even more worrisome is another issue: user pricing. Verizon officials made clear that, because they won’t be able any longer to limit the types of devices and applications that will run on their network, they will be applying “usage-based” data pricing. While they said this pricing would be “competitive,” any system that charges by the kilobyte or megabyte could be a real deterrent to the blossoming of the wireless Internet that Verizon’s open plan promises.

To be sure, Verizon has real concerns here. The bandwidth available on the cellphone networks is much more limited than that on landline networks. If somebody starts running Internet TV networks, or Web servers, or massive online games over the Verizon network, it could put a serious strain on the system.

But there’s a difference between setting higher fees for truly unusually high usage and erecting a payment system where everyone pays by the byte for even simple, common tasks like email, Web browsing, casual gaming, instant messaging, or simple video or audio streaming.

Taken to its extreme, that kind of metering could–intentionally or unintentionally–kill off the kind of innovation Verizon Wireless says it wants to encourage. That’s because the kind of innovative devices, software and services people are hungering for aren’t about making better voice calls. They’re about using the Internet, consuming those bytes that Verizon wants to meter.

So, let’s give credit where credit is due, but let’s watch how those details play out in the coming months. Verizon Wireless should be praised for giving up some of the control that was stifling wireless innovation in America, in my opinion at least. But, just how praiseworthy the move will be depends on some things we don’t know yet.