Toward a Wider Wireless World

By Cecilia Kang
Washington Post Staff Writer
Wednesday, October 7, 2009

Cellphone giants to federal regulators: We can hear you now.

That appeared to be the message from AT&T and Verizon Wireless on Tuesday when the telecom giants announced separately that they would open their networks more widely to popular, and potentially rival, phone services. The twin policy decrees came as the Federal Communications Commission gets ready to take up rules that would prevent carriers from picking and choosing what services can access the Internet.

AT&T said its high-speed 3G, or third-generation, wireless network would be open to Internet telephone services such as Skype on the iPhone, reversing a stance that had drawn criticism by consumer groups and application companies. Callers using Skype can potentially make international and other calls for far less than what they would pay on a traditional cellular service plan.

Verizon Wireless, meanwhile, said it was teaming with Google to produce new cellphones based on Google's Android software. The phones would be open for any applications, including Google Voice, a phone service that is blocked by Apple on its iPhone.

Analysts said the announcements seemed aimed at heading off FCC action in two weeks over whether to take up new "net neutrality" rules intended to prevent companies from serving as gatekeepers of Internet content. Chairman Julius Genachowski proposed two weeks ago a policy that would prevent any Internet service provider from blocking or unfairly prioritizing any legal content on the Web. The plan has been particularly contentious in the wireless industry, which has argued that it needs the freedom to manage networks because bandwidth is limited and consumers could experience slower access or dropped service if some applications hog capacity.

"Opening wireless services to greater consumer choice will drive investment and innovation in the mobile marketplace," Genachowski said in a statement Tuesday.

Verizon Wireless chief executive Lowell McAdam said the announcement with Google had little to do with the proposed rules. He said he began discussions with Google chief executive Eric Schmidt 18 months ago to produce Android-based phones. The deal brings together the nation's largest cellphone operator with the Web's search engine goliath in a partnership that could offer competition to the runaway success of Apple's iPhone. Google has been one of the strongest corporate proponents of net-neutrality rules in Washington, with Schmidt visiting Genachowski last Friday to thank him for the proposal.

"Trying to respond to whatever is urgently being discussed on the Hill was the farthest thing from our minds, quite frankly," McAdam said in a conference call.

Analysts say Verizon has had more open policies than most other carriers.

AT&T did not comment beyond its news release, which said the company decided during the summer to take a "fresh look" at its policy on Internet phone service over the iPhone.

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

Analysts said the announcements, timed one day before Genachowski delivers a keynote speech at a wireless industry conference in San Diego, could also improve their image in the eyes of regulators.

"The timing is nice," said Mike McGuire, vice president of research at Gartner. "It is the carriers saying, 'Okay, we are responding' and answering the market needs while also trying to stay within the guardrails that appear to be going up at the FCC."

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