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Verizon Wireless & Google Announce Open Platform Strategic Alliance, AT&T Reverses Course on Blocking Voice Over IP

ceosVerizon Wireless and Google this morning surprised the wireless mobile industry when it went far beyond a much-anticipated agreement between Verizon and Google to market smartphones using Google’s Android operating system, and instead seemed to embrace Net Neutrality for unrestricted use of online services on Verizon Wireless’ network.  Is this a consumer-friendly about face or a strategic effort to take the wind out of the sails pushing for formal adoption of Network Neutrality regulations?

Today’s announcement represents a complete reversal for Verizon Wireless, which announced opposition for wireless Net Neutrality in September.  Tom Tauke, Verizon’s executive vice president of regulatory affairs said then: “We believe that when the FCC reviews the record and looks at the facts, it will be clear that there is no current problem which justifies the risk of imposing a new set of regulations that will limit consumer choices and affect content providers, application developers, device manufacturers and network builders.”

Google and Verizon have been on opposite sides of the Net Neutrality debate for several years now.  The phone company spends millions of dollars lobbying Washington to keep Net Neutrality off its back, in direct opposition to Google’s strong advocacy for the consumer-friendly open network rules.  One might anticipate a joint webcast between the two companies would be reserved in tone at best.

It wasn’t.

In fact, Verizon Wireless CEO Lowell McAdam and Google Chairman and CEO Eric Schmidt fell all over themselves praising one another, and attacked Verizon’s nemesis AT&T.

McAdam took a shot at AT&T for the recent controversy over their decision to block Google Voice and other Voice Over IP services from working with AT&T’s wireless network.

“Either you have an open device or not. This will be open,” McAdam said.

Schmidt praised Verizon Wireless’ nationwide mobile broadband network, calling it “by far the best in the United States.”

AT&T understood the implication of the partnership between its biggest rival and the super-sized Google and announced it was reversing its decision to block Voice Over IP applications on its network.

Ralph de la Vega, chief executive of AT&T’s consumer wireless unit, said “the iPhone is an innovative device that dramatically changed the game in wireless when it was introduced just two years ago.  Today’s decision was made after evaluating our customers’ expectations and use of the device compared to dozens of others we offer.”

That’s a remarkable statement coming from a company that has routinely ignored the wishes and expectations of its iPhone customers for less expensive, higher quality, less restrictive service.

AT&T’s reversal was praised by FCC Chairman Julius Genachowski, who is pushing for adoption of Net Neutrality as part of FCC broadband policy.

“When AT&T indicated, in response to the FCC’s inquiry, that it would take another look at permitting VoIP on its 3G network I was encouraged,” Genachowski said. “I commend AT&T’s decision to open its network to VoIP. Opening wireless services to greater consumer choice will drive investment and innovation in the mobile marketplace.”

Have AT&T and Verizon suddenly realized taking a customer-friendly position of Net Neutrality is better for their corporate image?

Perhaps, but one might also consider the reversals to be part of a strategic effort to demonstrate a lack of need for Net Neutrality rules in a ‘remarkably open and free competitive wireless marketplace.’  Expect to see that line or something akin to it coming from the anti-Net Neutrality lobbying campaign within hours of today’s events.

AT&T has also spent millions on lobbying efforts in Washington to keep Net Neutrality and other telecommunications legislation at bay.  The prospect of a sudden role reversal for two of the biggest spenders on influencing public policy would be remarkable, if it actually happened for consumers’ sake.

Verizon Wireless & Google Joint Webcast — October 6, 2009 (18 minutes)
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Currently there are 4 comments on this Article:

  1. Tim says:

    “Have AT&T and Verizon suddenly realized taking a customer-friendly position of Net Neutrality is better for their corporate image?”

    Don’t count on it. I wish congress would stop these proprietary connections these phones use, purposely blocking the ability to put a ring tone on your phone or making it hard to do so, purposely blocking other software that might compete with the providers software such as downloading a 3rd party browser like Opera. It seems every phone I have used and had, had restrictions in place, by the provider or phone manufacturer, to block custom content or 3rd party software. This is an attempt to make you buy ring tones and exclusive content from the provider at a inflated price since competition is zero. Ring tones, $2 or more for a 20 second clip of lossy music!! You can buy the whole track at some places for a $1!! $4.99/month here, $2.99/month here, $9.99/month there, I think these guys would love to just up end you and shake out every last dime out of pockets. They love to nickel and dime you to death.

    Trust me, these big players wouldn’t be coming out like and saying the things they are saying if they didn’t see dollar signs. Consumers beware!!

  2. BrionS says:

    While Verizon is a major ISP, until very recently they have not been the problem that Net Neutrality deals most with. It’s been Comcast and Time Warner that – in my view – are driving the Net Neutrality push primarily due to their non-neutral and anti-competitive behaviors.

    It’s nice to see Verizon get buddy buddy with Google, but an “open” phone? Hardly. Is GPS enabled? Is wi-fi enabled on the device? Is the device crippled in any way as compared to the Sprint Hero or European Hero? I suspect it will be since handicapping phones is Verizon’s forte.

    Right now Sprint could use a bit more openness as well. With the upcoming release of their HTC Hero Android phone on Sunday, Oct. 11th, it’s still very unclear to everyone whether or not Sprint will require a draconian plan change to one of their Everything plans in order to get this phone. While this isn’t so much of a problem for individuals who are inclined to use all those Cadillac plans have to offer, for families with one heavy data user in the house it makes no sense (the cheapest Everything family plan starts at $130/mo, whereas the cheapest family plan starts at $80/mo and a data add-on for one phone is $15).

    As an aside (related to the purpose of this site), I was reading through the fine print of Sprint’s terms of service and the only data caps they call out is on their mobile broadband and phone-as-modem devices which have the “standard” 5GB cap. The phone data plans do not have this cap. It makes me wonder if one were to install an application on a next-generation smart phone that enables tethering and they used more than 5GB in a month without technically having one of their mobile broadband or phone-as-modem devices if they would still be subject to the cap (even though it’s clearly not stated anywhere)?

  3. Jeremy says:

    No doubt, they either tie down or totally incapacitate bluetooth and gps functions as well as wireless to force you to use their network and services as opposed to your own wireless or applications. Users that are not technically inclined to know how to use Bitpim are typically left to pay Verizon just to transfer their items to a new phone. Verizon has attempted to release new firmwares to disable Bitpim’s access.

    I really would like to get a new smartphone that I could use for internet access when at home or on the road when a wifi point is available. Unfortunately they are joining the ranks of other carriers and forcing customers to pay for a data plan they don’t want or need when buying from their paltry selection of smartphones.

  4. Michael Chaney says:

    “…there is no current problem which justifies the risk of imposing a new set of regulations that will limit consumer choices and affect content providers, application developers, device manufacturers and network builders.”

    So I’m confused. Instead of the FCC implementing rules that will in their words “limit consumer choices”, they will voluntarily abide by those same rules?!?! If they think Net Neutrality is such a horrible thing, then why on Earth would they voluntarily keep their Net neutral? They can’t say a set of rules are bad for business and then voluntarily implement them. It’s hypocrisy at its finest!

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