Update: Verizon Wireless opens up network to outside devices

Verizon Wireless yields to customer demands and will begin letting mobile customers run any application they choose on approved devices by the end of 2008

Verizon Wireless will open its network to outside mobile handsets, devices, and applications by the end of 2008, the company announced Tuesday.

[ Analysis: Verizon's move an opening for the industry ]

The company will publish technical standards for the development community by early next year, the company said. Any device that meets the minimum technical standard will be activated on the Verizon Wireless network, the company said. In a break from the traditional closed network model in the U.S. mobile phone industry, Verizon Wireless will allow customers to run any application they choose on approved devices.

Devices will be approved in a testing lab that the company has poured $20 million into this year, company officials said in a press conference. Verizon Wireless will accept any wireless device that passes minimal connectivity tests, including gaming devices, vehicle-based devices, and wireless handsets from competitors, company officials said.

"If someone has the technical capability of building something in their basement on a breadboard ... have at it," said Dick Lynch, Verizon Wireless' CTO.

The open network should give small-scale device makers new opportunities, added Lowell McAdam, the company's president and CEO. In the past, it was difficult for Verizon Wireless to market devices that would sell less than hundreds of thousands of copies, he said.

Devices won't "need to have the traditional distribution or the traditional volumes," he added. "With this approach ... it doesn't matter whether it sells five devices."

Right now, devices will need to use the CDMA (Code Division Multiple Access) wireless standard to connect to Verizon's network. The company will look at other standards as it expands its network, officials said.

Officials declined to discuss pricing details, only saying prices would be "competitive." More pricing details should be available after a developers conference early next year, they said.

The decision comes as consumer groups and some U.S. lawmakers have called for wireless providers to open up their networks to outside devices and applications. The U.S. Federal Communications Commission has required a portion of spectrum to be auctioned starting in January allow outside devices and applications.

Some consumer groups have criticized Apple and Verizon competitor AT&T for their exclusive agreement that allows the iPhone to be used only on AT&T's wireless network in the U.S.

But Verizon Wireless' decision was not driven by pressure from Washington, D.C., McAdam said. Instead, the company saw a demand for an open network, from its customers and customers of competing wireless services, he said.

"Customers' needs are increasing and diverging," he said. "Soon, Verizon Wireless will not be able to meet every customer's needs with our specific portfolio of devices and applications."

McAdam called his company's new "any apps, any device" policy a major change. There's a small but growing number of customers who want a choice that doesn't include full-service phones and applications, he said.

"Clearly, this is a whole new model, a whole new paradigm, not just for Verizon Wireless, but for the entire wireless industry," he said. "We pay attention to our customers. That's exactly what we're doing now."

Verizon Wireless will continue to provide a full-service offering, including retail stores and optimized software applications, the company said.

Art Brodsky, spokesman for open access proponent Public Knowledge, said he had questions about pricing and about the ability of customers to bring mobile phones from other carriers.

"What good will Verizon's announcement do me until or unless other carriers change their plans also?" he said. "Unless I miss my guess, most phones are sold today geared to one carrier. There are open phones, but those are generally more expensive. If I have to pay $300 for an open phone and $49.99 for the same phone under a wireless plan, I haven't gained much, have I?"

Copyright © 2007 IDG Communications, Inc.