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AT& T, Verizon Plan Wireless Future
Winners in FCC Auction Talk of More ‘Open’ Networks

By Cecilia Kang
Washington Post Staff Writer
Saturday, April 5, 2008; D01

Verizon Wireless and AT&T said they plan to create faster and more robust networks with a new chunk of radio spectrum they won at a recent federal auction of airwaves. They also talked about moving toward more “open” networks, offering consumers the ability to use a greater number of devices and more applications over their handsets.

The companies disclosed plans for their purchase of 700-megahertz radio frequencies after rules restricting them from discussing the Federal Communications Commission’s auction were lifted Thursday night.

Carriers currently control the types of phones and services their wireless subscribers can use.

Even though the companies touted their new networks as open, some said they won’t offer the extent of consumer choice that some public-interest groups and Internet companies sought.

The carriers’ definitions of an open network vary. AT&T argues that its use of SIM, operating and memory cards already allows the use of any device with those technologies on its network. It said it invites developers to create technologies for its networks, but it must approve their use.

Verizon Wireless, meanwhile, refused to elaborate on how it defines “open access.” It purchased a segment of airwaves at the auction that came with a requirement that it must build a network open to all devices and software applications. The company said it would begin testing technologies on its existing network by June.

“We don’t want to get into definitions at the moment that are ‘regulatory-ese.’ We want to get people to close their eyes and imagine all the possibilities,” said Verizon Wireless spokesman Jeffrey Nelson.

Google, the Internet phone service provider Skype and some public-interest groups had hoped to push the FCC and carriers to offer more unfettered consumer access. They also sought clearer regulatory definitions from the FCC.

“Our objective is to bring the ethos of the Internet to the wireless world . . . gathering the world’s information, making it universally accessible and easy to use,” but carriers still can control what users can do over the wireless network, said Rick Whitt, telecom and media counsel for Google.

Google, which bid in the airwave auction but didn’t win, said it will continue to stay involved with the implementation of rules to ensure that Verizon Wireless carries out the openness principles.

Wireless carriers, meanwhile, said they are being friendly to consumers.

Verizon Wireless chief executive Lowell McAdam said yesterday that the company’s purchase “will make Verizon the preferred partner for developers of a new wave of consumer electronics and applications using this next-generation technology.”

McAdam reiterated the company’s position that legally requiring openness was unnecessary. Both Verizon Wireless and AT&T declared victory this week after FCC Chairman Kevin J. Martin announced that he would try to dismiss a petition by Skype asking the commission to codify wireless openness principles in the law.

“The phone companies are probably sorting through right now how far they are willing to go and what their limits are,” said Rebecca Arbogast, an analyst at Stifel Nicolaus. On the one hand, carriers want to appear consumer-friendly and encourage the use of more devices on their networks. On the other hand, they are trying to avoid committing to strict definitions of openness so that they can maintain control over their systems, she said.

Earlier this week, AT&T Mobility chief executive Ralph de la Vega offered a case-in-point example of the balance carriers are trying to strike in the openness debate.

De la Vega said at the CTIA Wireless convention in Las Vegas that his company is moving closer to joining Google’s alliance in trying to develop an open-source mobile system called Android. But he said in an interview that AT&T will still decide which approved devices can be used over its network.

Markham Erickson, executive director of the Open Internet Coalition that is pushing for net neutrality rules, said De la Vega’s remarks fall short if AT&T maintains approval over which devices and applications can be used.

“That is still a walled garden, and the garden can be big and get bigger, but it is still a walled garden,” Erickson said.

De la Vega said in a conference call Thursday night that AT&T avoided bidding on the swath of spectrum won by Verizon Wireless because the open network rules were not clear. Instead, AT&T and other companies bid higher on regional slices of airwaves that weren’t subject to such rules, he said.

“People put a premium on the spectrum because it was not encumbered by excessive regulation,” he said.