‘Open Access’ Definitions Differ Among Carriers, Lobby Groups

“The open access question is evolving and there’s no straightforward way to look at it at this point,” said a spokesman for Alltel, which hasn’t called itself open. “There’s lots of noise around the issue but no clear definition as to what it is… Until there is a clear definition, there is no way to say who is or isn’t, or what is or isn’t, an open access network.”

The FCC defined “open platform” in its 700 MHz auction rules adopted July 31 as giving consumers “the right… to use any equipment, content, application, or service on a non- discriminatory basis.” Accordingly, the Commission said C- Block licensees in the 700 MHz auction must “allow customers, device manufacturers, third-party application developers, and others to use or develop the devices and applications of their choosing in C-Block networks, so long as they meet all applicable regulatory requirements and comply with reasonable conditions related to management of the wireless network (i.e., do not cause harm to the network).” The licensee “may not block, degrade, or interfere with the ability of end users to download and utilize applications of their choosing.”

Open Access advocates aren’t praising carrier criteria for openness. “Open means ‘like the Internet,'” said Amol Sarva, Txtbl CEO and member of Frontline Wireless’s Open Access Advisory Council. “You can buy any PC, connect it to any ISP, and look at any Web site. I don’t think any of these guys is going to be like that.” Carrier definitions only address “open platforms,” one side of open access, said Public Knowledge President Gigi Sohn in an interview. None discuss the wholesale requirement that Public Knowledge and other lobby groups asked -- unsuccessfully -- the FCC to include in its 700 MHz auction rules. However, it’s unclear whether any carrier’s definition satisfies open platform goals, either, she said: “I'm not ready to bless anyone.”

“Some folks, unfortunately, will always be cynical,” a CTIA spokesman told us. The market will shape what open access means, and doubters should be patient, he said. “A reasonable person would have to say, ‘These announcements were just made,’ and realize it’s where the industry is moving.” Critics aren’t looking closely enough, said T- Mobile Federal Regulatory Affairs Managing Director Kathleen Ham. “There’s a lot of bad info” from groups that are “not really digging in” to the issue, she said.

Carrier support for open access is a “remarkable change from last year,” when they “derided it as impractical,” said Stifel Nicolaus analyst Blair Levin. However, openness is “rhetorical, not behavioral” at this point, he said. “I don’t see a lot of activity in the market,” and it probably won’t be until 2009 that open access becomes an “important phenomenon.”

Top Four Say They're Open

Verizon says its “Any App, Any Device” initiative will make it the first open access carrier. Under the program, Verizon will let customers use any cellphone application and attach CDMA devices from other carriers and unaffiliated manufacturers. Devices must be “tested and approved” by Verizon at the manufacturer’s expense, but the Bell says that’s only meant to ensure security. “We don’t want devices that could allow malware to go through the device and get into the network,” CEO Lowell McAdam said last November.

“The devil is in the details,” Sohn said. Verizon hasn’t said whether it will allow full device functionality, and could still “cripple” phones by disabling Wi-Fi or other features, she said. Meanwhile, the certification process may be a means to “build in disincentives” for manufacturers, she said. Verizon hasn’t set a price for testing devices, nor have they said whether customers will need to pay a premium to use third-party phones, she said. If Verizon is merely reacting to a “regulatory wave,” it could price the open plan to discourage participation like some operators have done to discourage unbundled “naked DSL” subscriptions, Levin said. However, it’s also possible Verizon sees a good business model in openness and won’t create disincentives, he said: “It’s too early to tell.”

Sprint Nextel says its network is already open. “My response to Verizon is welcome to the party,” Bob Foosaner, government affairs senior vice president, told a Practicing Law Institute conference last month. “We were there a long, long time ago.” A Sprint spokesman clarified the statement. “Unlike some wireless carriers, Sprint allows data users to freely browse the Internet outside its portal,” he said. Sprint also works with application and content developers through its Application Developers Program, he said. When Xohm launches in early 2008, the wireless broadband service will be “a completely open network allowing any WiMAX- certified device to operate,” he said. Sprint is also a member of Google’s Open Handset Alliance and supports Android, the search firm’s open-source mobile operating system, he said.

Sprint’s open access claims are mostly “chest thumping,” Sohn said. Xohm could be a step in the right direction if it’s as open as Sprint says, but more details are needed to make a judgment, she said. Meanwhile, participation in the Open Handset Alliance is “a nice first step,” but Sprint could still use an Android-based open handset for closed, proprietary purposes, she said.

AT&T says it’s open because its network uses GSM technology. The Bell is “the most open carrier in the U.S.” and open access is only a change “for non-GSM carriers,” said wireless CEO Ralph de la Vega at an AT&T investor day (CD Dec 12 p5). Unlike CDMA phones, GSM handsets let users move phones to different networks by switching SIM cards. An AT&T customer can’t use an AT&T phone on another network while on contract, but the Bell will unlock the device once the term completes. AT&T also has a “broad selection of applications,” supports six operating systems and will evaluate Android as it did the others, de la Vega said.

AT&T may allow all GSM phones onto its network, but it also reserves the right to disable functions it doesn’t like in subsidized models, Sohn said, citing Skype’s petition to apply Carterfone rules to cellular. To be a truly open platform, it must allow “full functionality” of devices, she said. Also, unlocking AT&T phones isn’t as simple as the Bell makes it sound, she said. AT&T doesn’t promote unlocking and “you have to know to ask them,” she said.

“We do not attempt to prevent anyone from downloading any application they want to onto one of our wireless handsets,” replied an AT&T spokesman. “As far as services like Skype are concerned, our terms and conditions are very clear that the use of such a service isn’t permitted on our network. That’s because, given all the bandwidth it consumes, it could interfere with our other customers’ ability to use our wireless network, which is after all a shared resource.”

T-Mobile is “as open if not more open” than rivals and considered itself so “long before it was in vogue,” Ham said in an interview. The network even allows user-unlocked iPhones on its network, referring to them as “gray phones,” she said. Like Sprint, T-Mobile is a member of the Open Handset Alliance. However, radio-based services do pose capacity limitations, and T-Mobile “reserves the right to block services” that harm the network, she said.

T-Mobile is similar to AT&T in that it uses GSM technology, Sohn said. However, T-Mobile doesn’t block handset features and is “more up front” with customers about unlocking phones, she said. That “probably” makes the Deutsche Telekom-owned carrier the most “open platform,” but like rivals, it still fails the wholesale requirement of “open access,” she said.