Verizon cites security issue for nixing Google Wallet

Reports on actions by Verizon raise net neutrality fears

Verizon has denied that it is blocking the availability of Google Wallet on its smartphones and says that it's ironing out technical issues with Google to make the application secure to use on its phones.

On the surface, it looked like the kind of scenario that net neutrality advocates had long feared: a big incumbent carrier using its network to snuff out apps that compete with its own services. However, Verizon is insisting that this isn't the case.

Verizon Tuesday denied that it is blocking the availability of Google Wallet on its smartphones and says that it's ironing out some technical issues with Google to make the application secure to use on its phones. The big issue, says Verizon, is the integration of the Secure Element chip that Google designed specifically for the Wallet application to store encrypted credit card data separately from your smartphone's memory chip.

"Google Wallet does not simply access the operating system and basic hardware of our phones like thousands of other applications," Verizon said in a statement. "Instead, in order to work as architected by Google, Google Wallet needs to be integrated into a new, secure and proprietary hardware element in our phones."

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The company says that it will be "continuing our commercial discussions with Google on this issue." It isn't exactly clear, however, what technical issues are preventing Verizon from supporting the application right away since Sprint already supports Google Wallet on its devices. As of this writing, Verizon representatives haven't responded to requests for more information detailing why Google Wallet is not fit to run on NFC-capable Verizon smartphones.

The controversy over Verizon and Google Wallet started this morning when Computerworld's JR Raphael reported that the upcoming Samsung Galaxy Nexus smartphone would not support the Google Wallet app despite having the near field communications (NFC) capabilities to run it. A Google spokesman told Raphael that it was Verizon's call to keep the app off the device and Raphael then implied that Verizon may have been doing this to keep Google Wallet from competing with its own NFC-based payment system due to be released next year.

The reports of Verizon potentially blocking Google Wallet from its phones set off the alarm bells of some net neutrality advocates who have long worried that carriers would block applications that compete with their own native apps. Free Press policy director Matt Wood said today that Verizon's decision to not support Google Wallet on the Galaxy Nexus was "a disappointing move" that "will provide harmful to consumers, competition and innovation." Wood also said that Verizon's actions illustrated the "grave mistake" that the FCC made last year when it crafted a network neutrality policy that largely gave wireless carriers free reign over their network management practices.

Art Brodsky, a spokesman for Public Knowledge, said that Verizon's actions would violate the FCC's net neutrality rules if they had tried to restrict access to Google Wallet over their DSL or fiber-optic Web services. But because "the rules are so much looser in the wireless world," Brodsky said that Verizon was not violating the FCC's order. He did say, however, that "as a matter of principle, consumers should have the right to access any application over any device over any service."

Google Wallet, announced this past spring, utilizes NFC technology to send very short-range signals to nearby NFC tags to complete payments -- or as Google tells it, you'll only have to tap your smartphone on a store's credit card processor and you're good to go. Google debuted the application on the Sprint network with the Nexus S 4G device and the company has said that the app should come to other Android-based devices on other wireless networks in the near future.

NFC payments have become a hot feature on smartphones ever since Google first enabled NFC technology on its Android operating system with the Android 2.3 ("Gingerbread") update last year. Online payment company PayPal has also developed an NFC-based mobile payment application that runs on the Google Nexus S smartphone.

Copyright © 2011 IDG Communications, Inc.

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