After almost two years of bickering, are Verizon and Google about to kiss and make up? The WSJ reports ($) that Verizon Wireless, the second-biggest U.S. wireless carrier, is in “serious discussions” with the search giant to sell mobile phones running a Google operating system. This would be a win-win situation: Verizon, which turned its nose away from Apple’s red-hot iPhone — only to watch it perform magic for rival AT&T — finally gets its hands on a buzzworthy product line. And Google gets a carrier partner with a robust 3G network and no iPhone distractions. It’s not a done deal, the Journal says, but it would be a smart one.
Verizon’s public spat with Google goes back at least to February, 2006, when the “net neutrality” debate was making its first round in the mainstream press. And the thumb war intensified this summer when the FCC was considering rules for its upcoming wireless spectrum auction.
Update: WSJ now reports that Sprint Nextel is talking to Google, too. This isn’t surprising — in fact we anticipated it — as the companies are already working together on projects for Sprint’s forthcoming WiMax network.
Two winters ago, Verizon (VZ) was pitching the idea of charging content companies like Google (GOOG) a surcharge to give them faster access to its subscribers’ Internet pipes. “The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers,” Verizon lawyer John Thorne said last February. “It is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers.” Google, Amazon, and others called foul, arguing that Internet tollbooths would stifle innovation. Neither side won — neither “net neutrality” law nor tiered network pricing exists.
Their fist fight got even more awkward this summer when the FCC was considering rules for its latest wireless spectrum auction. Google used its lobbying arm (and a $4.6 billion pledge) to try to convince the FCC that auction winners should be required to use the spectrum for an “open” network, which works with any wireless device and any software application. That’s drastically different from today’s cellular industry, where carriers like Verizon control which phones and software applications people can use on their network. The FCC eventually embraced a few of the open-access concepts, despite much chest-thumping (and after that, a lawsuit) from Verizon Wireless.
The spat was admittedly fun to watch. But Verizon and Google should be working together — not against each other — to improve the U.S. wireless industry, which can use any innovation help it can get.
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