The wireless trade group CTIA has dropped a lawsuit against the Federal Communications Commission that challenged whether the agency had the right to require spectrum-auction winners to allow outside devices run on the network.

Earlier this year, the FCC required that the winner of the C block of 700-MHz spectrum would be required to let outside devices and applications on the network. Verizon Wireless paid about $4.7 billion for this highly valuable spectrum, which is considered "beachfront property" because it can penetrate walls and has a huge footprint.

The FCC put the requirement in because it said the mobile landscape was not competitive due to users generally not being able to take any handset they want onto different carriers. At the time, the CTIA said the FCC's reasoning for the requirement was flawed.

"It is evident to even the most casual observer that the American consumer enjoys a handset marketplace that is vibrantly and fiercely competitive," the CTIA said in a statement.

The dropping of the lawsuit comes as most major carriers are moving toward an open future. Verizon Wireless has pledged to open up its entire network, Sprint is moving forward with the embedded-chip model for its WiMax network, and T-Mobile has strong ties with the Android platform and the Open Handset Alliance.

Advocacy groups for open access applauded the lawsuit being dropped.

"This remarkable turn of events demonstrates how skeptical we should be when trade associations cry wolf over policies that are obviously in the public interest," said Ben Scott, policy director of Free Press, in a statement. "They fought openness conditions in the 700-MHz licenses tooth and nail and claimed the sky would fall if they were imposed. But when they realized that consumers actually want open networks and like the FCC's decision, some wireless companies started publicly using openness rhetoric."