A few years ago, the government was getting ready to auction off a wide swath of airwaves that had been used by TV stations. This spectrum, situated in the 700 MHz band, was perfect for mobile communications and broadband Internet service.
As the Federal Communications Commission started to make rules for using the spectrum, Google made a huge splash by advocating for unprecedented openness. Wireless carriers had locked down their networks and exerted total control over which handsets and applications they allowed their customers to use. Google wanted the government to require that carriers allow consumers to use any compatible device or application.
And to back that commitment, Google wanted the government to require carriers to offer a wholesale discount to any company that wanted to re-sell wireless service in the new band. So, for example, Google could buy a huge amount of service at a discount and re-sell it to consumers under its own brand. It's not unlike the way mobile virtual network operator, or MVNOs, work today but with the government requiring all carriers to participate and a greater discount to make resellers' services more competitive.
The wholesale reselling was a critical component of the plan as it provided the only way to pressure the carriers if they monkeyed around with the openness requirements. If Verizon and AT&T didn't offer true open access to whatever devices and apps consumers wanted, a wholesaler could on its own.
If you know much about how lobbying works in Washington, D.C., and specifically the power of the telecom lobby, you won't be surprised at what happened next. The FCC rejected the wholesale discount and adopted watered down openness requirements that allowed each carrier to define precisely which devices and applications were "compatible" with their networks. Touted at the time as a big win for openness, it was actually just the opposite.
Today, we can see one obvious example. Verizon is about to unveil the newest Android flagship phone, the Galaxy Nexus, which uses the 700 MHz spectrum for super-fast LTE Internet service. But Verizon won't allow the phone to run Google's mobile payment service, Google Wallet, alluding to vague security concerns.
This has generated some of the usual Android bashing over the state of "openness" on that mobile platform. Android has always been subject to the whims and dictates of wireless carriers. That's unfortunate and diminishes its openness somewhat. But it's hardly the failing it's made out to be. Android remains, by far, the most smartphone open platform and the only major one that permits so-called side loading of apps outside of its official app store.
Much more importantly than today's tiff, I'm sure when Apple updates the iPhone to include LTE Internet service, we'll hear some similar tale from Verizon and others about why the device won't be allowed to run non-Apple approved apps. So much for openness, FCC style.