Open Network Mania: Verizon Does a 180, AT&T Rides the Coattails

Remember Verizon's lawsuit just a few months ago trying to get rid of the open access requirements in the 700MHz auction? Neither does Verizon, apparently. The company decided to allow anyone to bring any compatible device of their choosing to the network. The timeline? It'll be done by the end of 2008, about the time the 700MHz band opens up. Not to be outdone, AT&T decided to use the buzz over open networks to say they had open networks too. Of course, this is the way it's always been, yet a few reporters got sucked into the blatant PR move.

Verizon one-upped themselves just days later by signing onto Google's much-ballyhooed Android mobile phone OS. It already had support from AT&T, T-Mobile and Sprint, though Verizon getting in on it proved even bigger news.

The bigger news, however, is that Verizon is ditching CDMA to move to GSM. (You can bet that CDMA manufacturer Qualcomm isn't very pleased about this at all.) That leaves Sprint as the only remaining national wireless provider committed to CDMA along with a handful of regional providers like Alltel and Cricket. Considering how GSM dominates in the rest of the world, it could just be a matter of time before Sprint ditched both CDMA and the iDen network acquired from Nextel. Even with the high-profile breakup with Clearwire, there's rumors of a soft launch of its WiMax Xohm service and a renewed partnership with Clearwire.

With the upcoming 700MHz auction, this paints a disturbing picture. Within several months, it appears as if the national carriers have all agreed to use the same signal standards, allow any device on their network and use the same mobile phone platform. In fact, it looks as if they're all closing ranks in preparation for the inevitable competition coming their way Real Soon Now™. I'm not alone in my skepticism either: PC World goes so far as to place the telecom industry on their list of most anti-tech companies, including Verizon and AT&T.

So who's in on the wireless action? Cox Communications, Frontline Wireless, AT&T, Verizon and Google have all vocally voiced their intention to bid. Cable giants Time Warner and Comcast have bowed out as has Sprint. Google might not even be planning to win the auction, considering that the open device and open access rules are exactly what it wanted anyway. I'm thinking that AT&T and Verizon are bidding to bid rather than to fuel some expansion plans. Both of them have their hands full with U-Verse and FIOS respectively, both of which have already caused lots of problems with investors over the slow return on investment. Frontline is a bit of a small fry in the fight and might not have the deep pockets necessary to go all the way to victory. Google already got what it wants and I doubt they're really interested in running a national wireless network. That leaves privately-held Cox Communications, a company rumored to be replete with cash. My swami powers say that they'll be the one to watch.

Meanwhile, our neighbors to the north have added a new requirement to their airwave auctions to require that at least 40% of spectrum is sold to new wireless players. Sounds like the FCC could learn a thing or two from our Canadian friends.

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