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Carriers keeping hands on the reins

For all their talk about opening up their networks, phone companies still plan to maintain a good deal of control.

Over the last few months, mobile operators have been falling over each other to profess their networks as "open," but a closer look at what they're really doing suggests they have a long way to go.

Traditionally, mobile phone operators have kept a tight grip on their networks. They have determined which phones could be used, what applications could be accessed, which features were enabled, and where subscribers could go on the Internet. But over the past year, Internet companies like Google and Skype have joined with consumer groups to lobby lawmakers and the Federal Communications Commission to force wireless carriers to loosen their restrictions and open their networks.

Amid threats of regulation and new legislation, operators have begun changing policies and introducing services that they claim makes their networks more open.

Earlier this week, FCC Chairman Kevin Martin applauded the industry's efforts toward openness, and said he would push to dismiss a petition filed last year by Skype that would require carriers to allow any device or application on their networks.

But for all the lip service being paid toward wireless openness, the reality is quite different.

Take Verizon Wireless' open device initiative as an example. In November, Verizon announced it was launching a program that supposedly would allow any device or application to be certified for use on its network. Device makers would be able to determine the features, applications, and services offered on the phones. They would create the user interface. Verizon would simply provide the network access.

For consumers, the benefit is the ability to choose from a more diverse set of devices and applications while still being able to use the Verizon Wireless network.

While this is a huge improvement over Verizon's traditional model, it does not constitute an entirely open network. The company still doesn't allow any device to connect to the network. Handset manufacturers still have to go through a certification process. In other words, if you wanted to use your old Sprint Nextel phone, which uses the same underlying CDMA network technology that Verizon's network uses, you couldn't.

Under this new model, Verizon still maintains control of which devices get on the network. This is completely different from how the traditional Internet operates. For example, Comcast and Verizon's DSL business do not certify laptops or any other Internet-enabled devices that connect to their broadband networks.

And it's this distinction that will likely draw criticism from open access proponents such as Google. Richard Whitt, Washington telecom and media counsel for Google, said in an interview with CNET that he and his team are still evaluating Verizon's open device program, but it seems clear from his definition of "open access" that Verizon is falling short of expectations.

"Openness to us is akin to what openness is like on the Internet where any end user can attach any device or use any application, that is lawful, on the network," he said. "It allows innovation without permission."

Verizon executives argue that they must certify devices to protect their customers and their network.

"We don't want to be a barrier to entry," Lowell McAdam, CEO of Verizon Wireless, said at the developer conference where the specifications for the new program were revealed last month. "But as all of you can appreciate with 65 million customers and billions of dollars of investment in our network, we need to protect our customers and our assets."

The big question now is how Verizon will interpret the requirements for open access on new spectrum it recently won in the 700Mhz spectrum auction, which is required by an FCC rule to be open to all devices and applications.

Google's Whitt interprets the rule as ensuring connectivity for any device, not just Verizon-certified devices.

"Regardless of what Verizon thinks as a business proposition, they will still have to comply with what the FCC requires," he said. "And the order and the rules are clear for what the FCC had in mind. Verizon has to live up to the regulation and the terms of those regulations. And we trust that the FCC will verify that those conditions will be met."

Verizon says that it believes its take on open networks more than satisfies the FCC's requirements.

"The Open Device initiative and architecture goes much beyond anything that the commission might have been thinking about with Google," Ivan Seidenberg, CEO of Verizon Communications, said Friday during a conference call to discuss the 700Mhz spectrum auction. "I think what will happen is, the FCC's expectations will be more than met by the kinds of things that we're doing."

Controlling the mobile Web?
Verizon Wireless isn't the only mobile operator offering a service that might not be all that it seems. In March, Sprint Nextel, the third largest mobile provider in the U.S., announced it would use new technology from OpenWave that would allow it to transcode regular Web pages so they could be viewed on any browser-enabled cell phone on the Sprint network. Sprint touted the new functionality as a way to open the mobile Internet to its customers and provide complete access to everything on the Web on their mobile handsets.

But the way in which Sprint has implemented the technology has drawn criticism from Web publishers, who say Sprint is hijacking their Web pages and adding its own links to their sites. On many of the sites that have been transcoded, Sprint has added a "home" button on the bottom of the page that takes users to its home page and not the home page of the Web page publisher.

Ed Moore, project manager for OpenWave's OpenWeb product, said this button is simply a navigation tool and is not intended to draw clicks away from the mobile Web publishers.

"Clearly it would be great to say the carriers are always sensitive to consumers' needs or that they want to maximize consumer welfare. But in many cases there will always be the need for Congress and the FCC at a minimum to provide careful oversight."
--Richard Whitt, media counsel, Google

"The aim of adding those buttons isn't to influence where users go next from a mobile Web page," he said. "It's simply to provide extra navigation. People need a way to get back to where they started to look for more content. And there is really no back button that can take them there."

But some people in the mobile community are afraid that Sprint may add other content to their Web pages, such as advertising. Jason Spero, vice president of marketing for Admob, a mobile advertising network for more than 4,000 mobile Web publishers, said many of his clients have complained about how Sprint is rendering its pages.

"The whole idea of 'openness' is just a marketing term," he said. "It's not really open when you're controlling what people see on Web pages. The mobile Web has all the potential of the PC Web, but adhering to standards is critical in making that happen."

Emmy Anderson, a spokeswoman for Sprint, said the company is not trying to control what consumers see when they surf the mobile Web. And she said the company is currently not embedding its own advertising on the mobile Web sites.

"It's not an issue of us having more control," she said. "We're just trying to make the user experience better. We are trying to open up more of the Internet to people on their cell phones. But we understand that some content companies might want to talk about how the information shows up on phones."

Moore said that OpenWave is already developing technology to ensure that some of these problems are resolved. And he said that Sprint is considering using the upgraded technology.

Even if Sprint adopts the new technology and Verizon Wireless edges toward more openness on its network, Google's Whitt believes that regulators and legislators still need to keep their eye on the phone companies.

"Clearly it would be great to say the carriers are always sensitive to consumers' needs or that they want to maximize consumer welfare," he said. "But in many cases there will always be the need for Congress and the FCC at a minimum to provide careful oversight."