March 19, 2008: 5:02 PM EDT
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Verizon opens up - reluctantly

The mobile carrier has long relied on exclusivity to protect its network, but now has to embrace outside devices.

By Scott Moritz, writer

Verizon is slowly opening its network to outside devices.

NEW YORK (Fortune) -- Lou La Medica is like the driving instructor who rides with you on your road test before you get your license - only tougher. As the director of Verizon Wireless' test lab in Bedminster, NJ, La Medica puts prospective new phones through a five-phase evaluation before they can be certified as ready for operation on the network.

No phone has ever sailed through on the first try. There are a battery of tests like signal strength, temperature tolerance, call quality, but La Medica says his first goal is to make sure the new device does no harm to the network.

In a world of exasperatingly imperfect cell phone calls, Verizon Wireless (VZ, Fortune 500) has nonetheless managed to paint itself as the "reliable" network. By controlling the phones and the applications that run on the network, Verizon has put a lock on some of the variables that can influence quality.

But that increasingly controversial so-called walled garden approach to its network has run into a challenge. Last year, at Google's (GOOG, Fortune 500) insistence, regulators hstipulated that the winner of the latest air wave auction must allow open network access and an open application policy. In theory, the move would open the gate to a new generation of devices that can capitalize on the faster wireless networks that will be built on the newly licensed 700 megahertz radio spectrum.

Verizon immediately filed a lawsuit to challenge the move, but withdrew it soon after. The company is now in the somewhat unusual position of having to comply with the rule that would loosen its grip on the network and yet keep the door open to new revenue opportunities.

Verizon took a big step Wednesday to help determine what outside devices will be allowed inside its network. The No.2 wireless service provider hosted its Open Development Device Conference in New York Wednesday where it shared its Version 1.0 specs - a list of technical requirements for new devices that are targeted for its network.

To date, La Medica has received no new gadgets that would be considered part of the "open movement." He does plan to tests the new devices for basic compatibility, but depending on the service offered - like data only, or GPS location services - he won't run everything through the five-phase test.

Still, he is somewhat apprehensive about this potentially disruptive new era ahead. "Open doesn't mean do whatever you want," he says. In other words, new device makers, just like anyone else, have to learn the rules of the road.  To top of page