ON WOLVES IN SHEEP'S CLOTHING

MIRAGE

(Updated below)

Someone please check if hell has just frozen over.   Or if it's a full moon tonight.  The telcos are going crazy and acting totally against type.

Yesterday, Verizon announced that they'll make an open version of it's broadband wireless (CDMA) network available to any device and/or application by the end of next year.  The news dominated Techmeme all evening yesterday.  But there's a lot we don't know about the service, as Saul Hansell of the New York Times explained it:

"Verizon Wireless has said it will open its network to any device and any application. But it hasn’t said on what price and on what terms. These are, of course, crucial to understanding how much effect this move will have."

So we'll have to see if there's any there there.  In the meantime,  Om Malik's take on all this at GigaOm is worth a read.

And then today, CNET reports that AT&T is quietly offering "Naked DSL" to customers. 

Naked DSL, as I noted in a post about this a couple of years ago, is when a phone company offers you DSL broadband without the obligation of also taking it's phone service.  Never mind that with DSL you can have your own brand of Internet phone service. 

Here's how CNET explains it:

"Over the past month, AT&T has quietly started to offer reasonably priced unbundled  "naked" DSL
Internet service to customers around the country.

The company's website makes no mention of the service, nor do its Internet phone sales representatives offer or even discuss the service. Customers wishing to sign up will need to call a specific department at AT&T to request the secret plan.

Two tiers are offered, a 3Mbit down/1.5 Mbit up plan for $28.99 per month, and a 1.5Mbit down/768k up for $23.99. Those who opt for the stand-alone DSL service will be able to avoid paying the myriad of mandatory fees associated with a phone line.

The service is available to customers in at least the following states: AL, AR, CA, FL, GA, IN, IL, KY, LA, MI, MO, OH, NC NV, SC, TN, TX

Customers wishing to sign up for the service should do the following:

• Call the AT&T Dry Loop department directly at 888-800-4095.
• Ask to switch to "DSL direct".
• If they give you a hassle, say it's a retention offer."

Before you start thinking AT&T is turning into one of the good guys, here is what CNET adds"

"The Federal Communications Commission ordered AT&T to begin offering stand-alone DSL service as one of a handful of conditions that allowed for the merger of SBC Communications and AT&T in October 2005."

Now we understand the reason for that stealth number and the secret handshake.

Going back to the Verizon announcement yesterday, and remembering the phone companies don't do anything unless they're absolutely made to do so, let's not forget that Verizon is anticipating to be in a heated battle with Google and others for new wireless broadband spectrum auctions coming up next year.

This is the battle important enough for Verizon to take the FCC to court, no less a couple of months ago, as this piece in Ars Technica reminds us:

"When the Federal Communications Commission issued its final set of rules for the upcoming 700MHz spectrum auction, reaction was mixed. Open access proponents were disappointed that the FCC failed to include all four of Google's open access suggestions, while the telecoms bemoaned the fact that two of them were included.

Verizon is taking its irritation over the FCC's rules to the courts, asking the US District Court of Appeals for the DC Circuit to set them aside.

Under the FCC's rules, whoever wins the spectrum auction must allow consumers to use any device and any lawful application on their networks.

After the FCC's decision, Verizon quickly made its position clear. "Imposing any such requirements in the competitive wireless market would reduce the revenue the government will receive from the spectrum auction and limit the introduction of new and innovative wireless services," the company said shortly after the announcement."

Hmm, wonder what changed in the last couple of months for Verizon to have such a change of heart.  Call me skeptical, but I'm not ready to get excited about Verizon's press release yesterday just yet.

Or for AT&T's offer of naked DSL to really see the light of day in a full-blown, mainstream, public, nation-wide launch.

Update: Well, it didn't take long.  This article from DSL Reports takes a crack at Verizon's true agenda on pricing it's "open" network next year:

Silicon Alley Insider's Dan Frommer was one of only a few writers who seemed to get what this announcement was really about -- the injection of a per-byte billing model into consumer consciousness:

"Some people think this will open the door to devices running new services, like free Internet phone service or video calling. But Verizon (VZ) has no intention of turning itself into dumb pipe."

You can expect service plans for non-Verizon phones to include data-network fees based on usage -- meaning those "free" calls could cost a bundle.

Recently busted by the NY Attorney general for advertising 5GB capped service as unlimited, Verizon Wireless has been looking for an opportunity to sell consumers on per byte pricing, and this is likely it.

It's a clever play by the company, who'll get to tell critics and regulators they they do in fact support open access, while charging you a premium for it."

Now that's a telco we can all recognize.

Comments

[Jason Wood]

Michael,

I am surprised so many people are focusing on VZ's motivations. To my mind, that's largely irrelevant. At the end of the day, whether they felt this move was necessary or not; it's significant and potentially a sea change. It also puts them out in front of AT&T (yet again), helps stem the competition against the cable MNOs, and probably calls Google's bluff on the 700 MHz auction.

I'm quite impressed frankly.

http://woodrow.typepad.com/the_ponderings_of_woodrow/2007/11/verizons-any-ap.html

Best,

Jason

[Mike Broder]

Michael,

As your post indicates, consumers have learned to be skeptical about "pro-consumer" steps taken by the large telcos and cable companies. The Verizon announcement leaves many details out, most importantly what technical hurdles each device must meet and what the pricing models will be.

You write "they'll make an open version of it's broadband wireless (CDMA) network available to any device and/or application by the end of next year."

The VZ announcement states: "In early 2008, the company will publish the technical standards the development community will need to design products to interface with the Verizon Wireless network. Any device that meets the minimum technical standard will be activated on the network."

The devil will be in the details on what devices are actually allowed. Maybe they will take a truly open approach, maybe not.

The speculation that VZ will adopt a pay-per-byte model sure fits the circumstances. And given all their brand positioning being focused on the network, it makes sense they wouldn't relegate themselves to the dumb-pipe-cellar.