[Blog] Will There Be Detente Between Wireless Carriers and Silicon Valley?

Jul 31, 2009 09:32 Phil Keys, Nikkei Electronics

It's not really a big secret that a lot of folks in Silicon Valley aren't really enamored of wireless carriers. They're generally viewed as closed, slow, cumbersome, and an impediment to a lot of innovation the Valley is always trying to push forward. This was one of the reasons VCs and others here poured resources into developing Wi-Fi (high-bandwidth wireless data services in unlicensed spectrum not controlled by carriers, yeah!). Google has carried this to a further extreme by successfully lobbying the US Government to insert open network provisions in the 2008 700 MHz spectrum auction, and opening up the television broadcast spectrum to White Space devices. Android can also be seen as a way to create an open software platform out of reach of the carriers.

Web developers have been no exception. In the past, given the difficulties in dealing with carriers and the myriad of mobile platforms to develop for, generally Valley web developers have thrown their hands up and stuck with the open personal computer web. Now, as has been repeated ad nauseam, the iPhone has changed all that. With the possibility of just having to develop for a limited number of smartphone platforms and app stores that bypass the carriers, web developers here are now really getting interested in mobile.

Of course, the carriers are well aware of this. Verizon Wireless's recent Verizon Developer Community Conference held in San Jose, showed that at least Verzion is moving to try and change things. In the past, amongst all the carriers, Verizon Wireless has had a reputation of being particularly closed, so having all the Verizon execs schlepping in from the East Coast to San Jose is somewhat akin to Daniel heading into the lion's den.

Or, perhaps the metaphor I should use is Anwar Sadat's 1977 trip to Israel? During the general sessions, the Verizon execs directly addressed their image problem here in the Valley. One of the more interesting was the showing of a bizarre video of a man spending the whole day saying "yes" into a phone, being interrupted once by the Verizon guy saying "Can you hear me now?" and finally ending with the man screaming a long stream of well deleted expletives into the phone. I guess this was Verizon's way of showing they know how they are viewed here.

The Verizon execs promised they would try to make nice by doing such things as opening a new app store, qualifying apps within 14 days and even open up an "Innovation Center" catering to app developers here. One of the more interesting steps they promised was opening up their network services such as location, presence, and billing to developers. Verizon is not the first to talk about this. In the past, I've heard Sprint/Clearwire and Vodaphone talk about this as well. It looks like the carriers are learning the web application paradigm of opening up the web services you think are useful to other developers for mutual benefit.

In the end, as in all conflicts, the realization that both sides need each other will drive some sort of detente. Mobile web app developers need the wide distribution a carrier like Verizon can provide, and that ability to directly bill consumers through the bill is really attractive. Verizon needs differentiated apps to compete with AT&T and the iPhone and ultimately avoid becoming just a pipe. Also, neither side is likely to get all they want. Verizon is likely to never be as open as the app developers really want and I think app developers will probably think twice before tying themselves to network services controlled by the carriers. A more normal relationship should benefit both groups.

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