VZW promises family of Android phones; commits to more open network

In 2007 and 2008, Verizon Wireless (NYSE:VZ, NYSE:VOD) and Google (NASDAQ:GOOG) had a very public disagreement over whether everyone should have access to the airwaves, resulting in Google bidding up 700 MHz spectrum Verizon eventually won thus ensuring open access thresholds were met. Today, however, the two juggernauts in their respective industry appear to have mended their differences, announcing a collaboration to develop new 3G and 4G devices for Verizon’s networks using the Android platform.

Speaking on media call this morning, Verizon Wireless CEO Lowell McAdam and Google chairman CEO Eric Schmidt said that their companies had formed a strategic partnership, the origins of which dated back to just after 2008’s 700 MHz auction and the fruits of which will be revealed this month. In the next few weeks, they said, the first Android smartphones for the Verizon Wireless EV-DO network will be unveiled by Verizon’s handset vendors. The devices will be preloaded with applications from Verizon Wireless, Google and third-party developers and, in a first for VZW, each device will have full access to the full breadth of applications in Android Market, including Internet call-routing service Google Voice.

“Either you have an open device or not,” McAdam said, answering a question specifically about support for Google Voice. “This will be open and we expect to support that application when we bring these devices to market.”
While Google Voice’s mobile app doesn’t cannibalize voice minutes—at least not yet—it routes all phone calls from its central servers, taking control and possible value-added service revenue out of the operators’ pockets. Agreeing to support Google Voice is no small concession for Verizon, considering AT&T (NYSE:T) and Apple (NASDAQ:AAPL) balked when Google first launched the application for the iPhone. The resulting dust-up saw Schmidt resign his seat on the Apple board and the FCC open inquiries into AT&T and Apple over neutrality concerns.

The issue of Net Neutrality has been heating up of later with new FCC Chairman Julius Genachowski proposing to extend the rules today governing wireline operators to the wireless industry. Fielding a question on the timing of Verizon and Google’s announcement, McAdam said the two companies have been in discussions for their partnership for more than a year, long before net neutrality concerns were in the forefront.

“One of the worse things you can do is manage your business based on what’s in the newspaper or what’s going on in Washington,” McAdam said. “Trying to respond to what’s currently going on on the Hill was the furthest thing from our minds.”