Why did Verizon Wireless announce it’s opening up its network now? There could be several reasons, ranging from Verizon’s interests in an upcoming wireless auction to XM-Sirius merger.
Richard Doherty, director of consultancy Envisioneering Group believes Verizon Wireless has given the Federal Communications Commission’s Chairman Kevin Martin — a long proponent of open access — this treat in order to influence the commission on a number of important deals, such as the XM-Sirius satellite radio merger that’s pending approval.
Then, there's the upcoming wireless auction. Until today, the auction was expected to fetch more than $15 billion. Verizon Wireless, long expected to participate, would have had to borrow money to buy a chunk of these expensive airwaves in a bidding against potential newcomers like Google. The newcomers have been threatening to use the airwaves to build networks open to all sorts of phones and software; this openness was going to be their main marketing advantage in competition with the incumbents like Verizon.
Now, that advantage is -- poof! -- gone. Some of the wireless newcomers might have lost some of their marketing edge -- and financial backers in a single day. Thus, bidding at the auction might not go as high, Doherty says.
Verizon Wireless has achieved all that with just one press release and a news conference. What remains to be seen, though, is just how much Verizon Wireless will really open its network by.