Verizon Wireless is Being an Anti-Competitive Ass

Whether it's their treatment of Google Wallet, the Nexus 7 or the Nexus 5, Verizon Wireless is increasingly making it clear that they're using their position as gatekeeper to engage in anti-competitive behavior -- with few properly calling them out for it. In all of the above instances, Verizon is using network safety and faux-technical explanations to justify why they can't offer a pure Google product -- but can instead offer you one of their own, usually inferior, bloatware-riddled products and services.

The company has always fought violently against becoming a "dumb pipe," trying to inject itself or its services into a content ecosystem that already provided superior alternatives. You simply need to look at their failed app store failed VCAST services , or things like their GPS services to see countless examples of this.

Normally in a competitive market when your products and services are sloppy, clunky, or otherwise just not very good, you'll simply fail. However, while simultaneously paying empty lip service to network and device openness for years, Verizon has aggressively used their position as a wireless network gatekeeper to force the issue. There's countless examples of this going back years, but most of the latest involve trying to thwart Google's effort to open up the wireless device ecosystem:

• Google Wallet : Back in 2011, a feud erupted after Verizon refused to make the Google Wallet payment system available on their devices. At the time, Verizon issued a statement saying the fault was Google's, because Google Wallet "needs to be integrated into a new, secure and proprietary hardware element in our phones."

Except it'sphone; and while I've heard (and don't entirely disagree with) opinions that Google shares responsibility in complicating things by having their OS demand use of the phone's secure element, that doesn't magically negate the point that a network operator with a history of market abuses really shouldn't be dictating what services you can use, or how the OS and hardwareinteract on a device you own.

Verizon repeatedly stated that the company was "continuing our commercial discussions with Google" in terms of getting Google Wallet working. However, those discussions went nowhere fast, and the delay quite conveniently allowed Verizon to get their own mobile payment platform -- Isis -- out of the trial phase and into broader deployment. Check out the Isis Mobile Wallet reviews in the Google Play store for a few laughs and another example of Verizon "innovation."

• Nexus 5 : The original Galaxy Nexus smartphone magically and mysteriously found itself stuck in Verizon's device certification purgatory while Verizon foisted their own, bloatware-riddled Droid handsets onto consumers. Verizon dodged a bullet with the Nexus 4, since it only supported GSM. Now, the most recent Nexus 5 isn't being supported by Verizon at all. AT&T, T-Mobile and Sprint worked with Google to make sure the Nexus 5 supported their various CDMA, GSM and LTE bands -- but not Verizon.

The Nexus 5 does support Verizon's CDMA 850/1900 network, as well as the company's band 4 LTE network (albeit only just freshly deployed), but not band 13 on Verizon's network. It should have been easy for Verizon to work with Google to ensure the Nexus 5 worked on all of their bands. You'll note in the oodles of Nexus 5 press coverage neither company will publicly explain why, though the most likely answer is that Verizon didn't want to. Google may not have wanted to either, after the original Galaxy Nexus delays.

An unlocked and open device like the Nexus 5 is just the sort of thing that gives big red executives night sweats. Don't worry though: Verizon is promising a similar (read: heavily Verizon branded, bloatware infused) "set of similar projects" to be released in 2014. Surely they'll be just as good, right?

Nexus 7

: Google's popular seven inch tablet supports Verizon's LTE network, but is being blocked from activation. Why? Verizon will only say that an utterly ambiguous " systems issue " is to blame for the device being stuck in Verizon's device certification purgatory. Meanwhile, you can conveniently now buy Verizon's own, bloatware-riddled seven inch tablet that's surely just as good with a release timing that's purely a coincidence.

Perhaps you're noticing a pattern? In each instance the safety and security of the network is used as flimsy faux-technical justification for blocking or delaying products that compete with Verizon's own. This isn't new or specific to Google either: some will recall Verizon used to even go so far as to block third party apps from getting access to a handset's GPS radio so you were forced to use Verizon's service with a monthly fee.

How Verizon, Google and a Heavily-Lobbied FCC Brought us Here

With the help of weak-kneed regulators and waffling Google principles , Verizon spent years writing and lobbying for regulations that instead of protecting consumers, actually in many ways sanction this kind of predatory, obnoxious behavior.

In the newlywed throes of their BFF Android sales relationship from a few years ago, Verizon and Google lobbyists and lawyers cooperated to ensure proposed FCC neutrality rules not only didn't fully apply to wireless networks, but contained ample loopholes to allow carriers to engage in any anti-competitive behavior they wanted -- provided they claimed it was necessary for the health and security of the network.

We will allow customers to connect any device that meets our minimum technical standards, and be activated on our network. We do not expect this to be a difficult or lengthy process, since we will only be testing network connectivity.

-Verizon Wireless CEO Lowell McAdam in 2007

But that wasn't enough for Verizon. To prevent the government fromcrafting or enforcing consumer protection rules worth a damn -- Verizon decided to sue the FCC over net neutrality to ensure the FCC won't have the authority to police Verizon's anti-competitive behavior -- be it on wireless or wireline networks.

The Carterfone provisions attached to the 700MHz C Block spectrum Verizon acquired at auction in 2008 are also frequently trotted out by many as a way we were supposed to force Verizon to behave.

Except those conditions, which are supposed to protect the consumer's right to attach any FCC-approved device to any network, were again intentionally designed by Verizon lawyers and the FCC to allow all manner of nasty behavior -- provided it can be passed off to the press and public as a network standards or safety issue.

"You Knew I Was a Snake When You Picked Me Up"

It's not like Verizon hadn't been making this tactical approach clear. I warned readers in 2007 and again in 2009 to take Verizon's "Open Development Initiative" and their repeated public adorations of openness with a grain of salt, yet Verizon received praise and adoration for what was essentially theatrics.

One would like to think if Verizon continues down this path there's a price somewhere to be paid for waging a war on truly open devices and networks. In a truly healthy competitive market, that price would be users leaving Verizon and heading to carriers with more open-minded and intelligent executives. But despite claims, this isn't an entirely healthy and competitive wireless market.

While there's huge progress being made in prepaid and with T-Mobile's disruptive and consumer-friendly "uncarrier" efforts, Verizon and AT&T still control 85% of the U.S. wireless industry (not to mention the domination of the special access market). Their size, lobbying muscle, and dominance leaves companies like Verizon utterly unfazed by things like the passing barbs of telecom nerds or the muted sting of consumer advocacy.

In a healthier market and smarter political climate you'd see regulators step in occasionally to rap a few company knuckles, but U.S. regulators, purportedly tasked with protecting consumer interests on this front, have made it repeatedly and painfully clear they couldn't care less. While opinions vary, I personally don't see that changing with a former industry lobbyist now heading the FCC. That leaves the penalty for this kind of behavior solely in the hands of informed Verizon subscribers.

On a final positive note, whether Verizon is blocking GPS radio access so you'll use their awful, expensive GPS service, blocking tethering so you'll pay more, or blocking Bluetooth (again, so you'll pay more) -- getting in the way of evolution hashistorically been a long-term losing strategy for Verizon. In the short term however, without functioning regulators and healthy competition, consumers get to feel the brunt of the stupidity. Repeatedly.