Verizon opens network to more cellphones

Dramatically reversing a long-standing policy, Verizon Wireless on Tuesday said it will no longer restrict the types of cellphones its customers can use on its network.

Verizon customers now must choose a phone from a list approved by the No. 2 cellphone carrier. Staring next year, they'll be able to use any phone that meets quality standards.

Details will be released in early 2008. But don't expect all phones to suddenly become Verizon-friendly. Since different carriers use different technologies to power networks, phones aren't easily swapped between them. Apple's popular iPhone, built for AT&T's network, generally won't work on Verizon's network, for example.

That's one of the reasons why consumers may not benefit much from the announcement at first. "In the short term, it's a giant publicity stunt," says wireless analyst Bill Hughes at researcher In-Stat.

But over time, the new policy could help Verizon battle rivals such as Sprint s and T-Mobile, which just partnered with Google goog to develop cellphone software. It could also allow Verizon to curry favor with regulators — and prompt other changes in the wireless industry, Hughes says. Among them:

•More consumer choice. Verizon's open network may encourage more manufacturers, and even hobbyists, to build phones for its network. The only catch is that they must submit the phones to Verizon to verify that they meet quality standards. Verizon is building a $20 million testing lab but has not provided details about how this process will work.

"Consumers will have a little more flexibility," says wireless analyst Charles Golvin at Forrester Research. But most will probably continue to buy phones recommended by carriers, he says. That's because Verizon and others usually subsidize the cost to woo customers into lucrative service contracts. People used to paying $50 or less for a high-tech phone won't rush to spend $400, he says.

•Less regulation. Cell networks travel through public airwaves, so carriers are tightly regulated by the U.S. government. Companies that don't appear to be looking out for the public's interest run the risk of additional scrutiny, says equity analyst Albert Lin at American Technology Research.

That could be especially important next year, when the federal government is expected to sell a chunk of the airwaves currently used by some television stations. These airwaves are useful for high-speed wireless data networks, so everyone from Google to AT&T t has expressed interest. Competition is expected to be fierce, and until now, "Other cell companies have been far more open than Verizon has," Lin says.

Many even have policies that aren't too different from Verizon's. T-Mobile will sell cellular service to anyone with a technologically compatible phone. AT&T generally approves rare requests to use phones not on its recommended list, says spokesman Mark Siegel. Sprint requires customers to buy from a list, but, "No one has approached us about developing something that we wouldn't sell," says spokesman Scott Sloat.

Verizon Wireless is a joint venture by Verizon Communications v and Vodafone vod.

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