Elizabeth Woyke, 03.20.08, 10:50 AM ET
Ever since Verizon Wireless announced it would open its network to outside devices and applications last November, the telecom industry, developer community and consumers have debated: watershed move or publicity stunt?
On March 19, the company appeared to win some credibility as it unveiled a detailed process that would allow device makers and developers to directly access its network and its 65 million customers. The process, which went live that day with the launch of a dedicated "open development" Web site, will be fully operational by the second half of the year.
At the New York event, dubbed the Open Development Initiative (ODI), several hundred attendees watched a fleet of Verizon executives talk up the project, stressing words like flexibility, partnership and opportunity.
Chief Executive Lowell McAdam said Verizon wanted to "tap into the innovation occurring on the desktop today." The company hopes a much broader variety of devices, including gaming consoles, in-car tech systems and health monitors, will begin utilizing its network under the more liberal guidelines.
Tony Lewis, a Verizon vice president who is overseeing the initiative, asked the crowd, "Do you see the possibilities? They are limited only by your imagination."
Imagination and persistence, that is. The route to Verizon's network is full of tests, meant to protect the company's more than $40 billion network. Device makers will need to register prospective gadgets and submit them for approval at Verizon's New Jersey lab or an approved third-party lab. The tests, which will assess government-regulated phone features like emergency 911 calling, will begin in mid-May. The process, which must be repeated every three years, could take as little as four weeks, meaning the first ODI devices could debut as early as July, said Chief Technology Officer Tony Melone.
That's far speedier than Verizon usually operates. Previously, manufacturers hoping to partner with Verizon had to rely on finagling a meeting with the company's device marketing team--a process that could take months, or potentially never happen.
Lab certification can also take months (see
"Verizon's Little House of Horrors"). The company has relaxed its standards for these outside devices since they won't be sold in Verizon's stores or under its brand.
Developers will enjoy a certain amount of flexibility. They can sell applications three different ways: retail, in which Verizon would set prices and handle billing; wholesale, which would allow a company to set up its own service plans; or a custom hybrid model.
They will also maintain some creative control. Verizon says it will only vet technical features that relate to its network.
The upshot for consumers? More choice. "If you want to buy a regular phone at a Verizon store and sign a two-year contract, you'll still be able to do that," said Avi Greengart, research director at Current Analysis. "If you want a special device or want to create a business around connected devices, this will be attractive."
There are limitations. Developers won't be able to tap into multimedia services Verizon already offers, including location detection, messaging, voice mail and music applications, at least initially. "We're flexible about developing [those] business relationships after launch," said Chief Marketing Officer Mike Lanman.
Verizon is also constrained by the cellular technology it uses, called CDMA. Around 80% of networks and phones around the world use an incompatible standard called global system for mobile communications (GSM)--a fact that naturally limits the number of usable devices.
"It's clear that Verizon is serious about this," said Greengart. "But [the initiative] will still essentially be about devices custom-made for its own network." Verizon will move to a more universal fourth-generation technology called LTE by 2010 or 2011.
Verizon does not plan to coddle developers that run into scrapes. Even so, "there's not going to be a pass/fail stamp," insisted Melone. Resources are mostly self-serve, such as a "best practices" document available online and an online developers forum that will go live by the end of the year.
Consumers who port over outside devices won't have the security of a 1-800 help line or local store service desk either. After purchasing devices online or at a third-party retailer like
Radio Shack (nyse:
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people ) or
Wal-Mart (nyse:
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people ), users will activate them on Verizon's site. These customer accounts and customer service matters will be handled online, said Chief Information Officer Ajay Waughray.
Attendees said they were optimistic about the model. "Verizon has a reputation as the most picky U.S. carrier," noted Eric Lee from Inventec Appliances, a Taiwan-based smart phone manufacturer. "These ODI specifications will be much easier to meet than Verizon's regular standards."
Jesse Nowlin, the East Coast representative for zzzPhone, a China-based handset maker, said potential customers regularly ask if the company's phones work on Verizon. (They don't yet.) "We'll get the specifications and talk to our engineers. If it's a possibility, we'll run with it," he said.
Details on some key points weren't addressed. Some start-ups fretted over the network test fees, which Verizon declined to describe. Others wondered what factors would determine whether a gadget went through the Verizon lab or an independent one.
Some attendees, thinking as Verizon consumers, pondered what the company would charge users with outside devices and how much the gadgets would cost without a carrier subsidy. McAdam noted that the initiative would be "great for Verizon Wireless' bottom line," but didn't elaborate on fees.
The initiative is still a work in progress. "This is a new business model for us," said Lewis several times during the event. Noted Melone, "We don't know what to expect--will it be one device a month or 100? This will all change over time."
See Also: 
Verizon's Open Network Strategy 
Linear Mode
