Verizon Unlocks US Mobile Market

Implications: Verizon’s move represents the first major chink in the stone wall of locked mobile phones in the US. It seems unlikely that Verizon is really going to be totally open in the near future, but just the announcement represents a major step in that direction. Other carriers will be forced to follow, and over time all will really become open.

Analysis: The US mobile carrier market has represented a unified front on the locked phone issue. Even while Europe and others have allowed unlocked phones, carriers in the US have steadfastly resisted. The release of the Apple iPhone has provided considerable incentive to change this, as its status of being locked into AT&T’s network has generated huge publicity in the US. Apple’s somewhat heavy-handed approach to controlling the iPhone has guaranteed continuing headlines on a topic that was previously of little interest to the media.

The continuing headlines have guaranteed the issue would be front and center when the FCC allocates the 700MHZ spectrum, and made it likely the FCC would feel compelled to mandate some level of openness. Verizon’s past relationship with the FCC has been rocky, to say the least. Had they done nothing they could reasonably expect rules from the FCC that would force openness on them and the other carriers. Making a public announcement of openness at this time could have the effect of heading off FCC requirements, but that seems highly unlikely. The FCC has a long memory and is not likely to change their approach simply because of this announcement. Most people, including FCC members, are likely to view the announcement with considerable skepticism.

Even if Verizon’s motivations are less than perfect, however, the fact of the announcement is a huge break in the stone wall. They have now publicly acknowledged that openness is acceptable and even perhaps a good thing. They may have honorable motivations and truly want only to ensure all phones will work appropriately on their network. That is a reasonable requirement that no one can criticize them for. The real test will be how quickly they do the certification and what percentage of tested phones get approved. As long as they test reasonably quickly and certify a reasonable number of phones, they will BE open. If they fail on either of those criteria, pressure from the public, the media and likely the FCC will force them to comply.

If Verizon does not have honorable intentions and this is intended to be just a ploy to head off the FCC, it probably won’t make much difference in the ultimate result. They have demonstrated in the recent past they are sensitive to media storms, such as their recent alleged censoring issues, so it seems certain they really will have to comply with the spirit of this announcement, whether or not that is their intention today. Once a major US carrier such as Verizon becomes truly open, the other carriers will have little choice but to follow. It may not happen in the next three months, or even the next year, but this announcement is an indicator that it will happen, and in the relatively near future.