Is All This Talk Of ‘Open’ Just Lip Service?

Open, open, open. It’s the buzzword of the moment in mobile, thanks to the likes of Google and Verizon. Operators are talking about how they’re open, how they want to foster innovation and new business models, and how they love openness and so on. But then pops up BusinessWeek with a story on how US operators routinely deny SMS short codes to companies they feel threatened by, and it makes you wonder if this message of openness and cooperation is just a PR front.

The article cites the example of Rebtel, the international VoIP company (see previous coverage), which wanted to launch a new service. Users could send a text to a short code containing the international number they wanted to dial; Rebtel would respond with a local number to call, and the user would call it and then get connected through Rebtel’s VoIP system to the international number — at rates far, far lower than those offered by the operators. Two of the top five US operators approved the short code request, the other three denied it:

Rebtel co-founder Greg Spector says the company that handled its application was told that Verizon Wireless considered the service “not an allowed international calling plan” and that Alltel refused because Rebtel’s service “cannibalizes their international rates.” T-Mobile and Alltel didn’t immediately respond to requests for comment on the Rebtel matter.

Verizon says it has done nothing wrong. “They can still text-message our customers” to offer their service, says spokesman Jeffrey Nelson. “They just don’t get to do it in a special way with a short code. We’re not blocking anything.” Just as a newspaper or TV network is free to reject advertising from a rival media outlet, Nelson says, “we don’t need to provide special access to our customers and network to a company that’s in direct competition with us.”

And what about AT&T, the operator whose CEO told USA Today that it was “the most open wireless company in the industry”? It refused to give short codes to four banks that wanted to offer mobile banking services to their customers. AT&T eventually relented and approved the codes — at about the same time it launched its own mobile banking services in partnership with a couple of other banks.

So apparently, the message is “We’re open… unless you compete with us.” This reeks of old-school telco thinking: “People won’t use our services because they’re the best, they’ll use them because they’ll have no choice!” The choice is the operators’: they can continue down this “open*” path, and set themselves up to get cut out of the picture completely; or they can actually embrace openness, and develop their services to thrive in a competitive environment, and benefit from the influx of innovation such a stance would bring.

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