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Chatting with Verizon Wireless's Lowell McAdam

I sat down this morning with Verizon Wireless Chief Executive Lowell
to talk about the company's recent $9.5 billion purchase of radio spectrum, it moves to open its existing networks, and the hottest applications for cell phone users today. But mostly, he was still riding high on Federal Communications Commission Chairman Kevin Martin's announcement yesterday that he will issue an order to other commissioners to dismiss Internet phone service provider Skype's petition to the agency to enforce open network principals.

"If you bring the government in and they try to regulate, the industry will grind to a screeching halt. Just look at wireline side (which is more heavily regulated). Does anyone invest in the wireline industry anymore? No. They will in fiber and broadband because those aren't regulated," said McAdam.

The debate over net neutrality, the idea of enforcing open Internet principals, has picked up steam in recent months with the FCC holding its second hearing on cable company Comcast's management of its
networks (it admitted it delays some Internet traffic), at Stanford University on April 17. And Martin's comments yesterday sparked a slew of criticism from consumer groups like Consumers Union and Public Knowledge and lawmakers like Rep. Mike Doyle (D-PA). These proponents of net neutrality argue that principals need to be strengthened so that network operators are held accountable for delaying and blocking Internet traffic. In the case of wireless carriers, Skype pushed for the same principals that would force carriers to open their networks to all devices and applications.

Verizon already moved in that direction. They won a handsome block of spectrum from the FCC auction that would be open to all devices and software applications. Last November, it also invited device makers and software developers outside their traditional vendor partnerships to create mobile technologies for their networks. So far, 300 people have downloaded the technical specs for their networks, McAdam said. The result of opening its networks, he said, will be a slew of new innovation.

"It's a very interesting experiment in Verizon Wireless because we've set up direct competition with the open development team and the traditional retail team on who gets the most innovative product to market faster," McAdam said.

He envisions small cell phone watches worn on the wrist with streaming video, navigational capabilities and social networking applications so friends can know where you are and what your plans are for the night. A small rubber wrist band could also act as a constant health monitor, immediately telling your doctor if your blood pressure is at dangerous levels or if your blood sugar level is too low.

Much of this technology isn't here yet, but will be in the near future on its next generation platform technology called Long Term Evolution, or LTE, technology, he said. That's why the company has doled out so
much money recently on new spectrum auctioned by the FCC.

"Spectrum is your lifeblood as a wireless company," he said. "The question for investors is for those who didn't invest in spectrum. What are those people going to do now?"

Think this is overdoing it? After all, about 80 percent of the population has cell phones so will there be market left over?

"Coming from Asia and Europe where penetration rates were 120 to 130 percent, this is nothing. There is still a lot more to go," he said.

By Cecilia Kang  |  April 2, 2008; 1:32 PM ET  | Category:  Cecilia Kang
Previous: Whatever Happened To Sprint's WiMax Venture? | Next: Sitting Down With ATT's De la Vega--And His Gadgets

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Please email us to report offensive comments.

What does he mean by 120%-130% penetration rates: multiple phones per person?

Posted by: Jim Crawford | April 3, 2008 8:48 AM

"Does anyone invest in the wireline industry anymore? No. They will in fiber and broadband because those aren't regulated," said McAdam."

Does anyone swallow that crock? They don't invest because the technology is 100 years old, not because it's too heavily regulated. Cry me a river. Lack of regulation has brought us near financial ruin, not the other way around.


Posted by: Peggy Miller | April 3, 2008 9:33 AM

Of course, McAdam days nothing about Verizon Wireless customer service, because Verizon Wireless has no customer service.

Posted by: Mister Methane | April 3, 2008 10:32 AM

In the past Verizon has locked their network and equipment down far more than the other carriers. All their talk of opening is doing little more than one step beyond what the other carriers have done for years. Most any Verizon phone has its blutooth locked down so much its almost worthless. They lock the network down so you are forced to pay extra to do almost anything. They do have the best network and best PR though. They are selling everyone on their great innovation, when they are still miles behind Europe.

Posted by: Mike | April 3, 2008 10:53 AM

Lowell is correct. Telephone service is becoming just another application provided over broadband, which explains his comment about investment. And it's being replaced by entirely new technology -- VoIP (Internet phone service). 100-year old copper wires are being retired, and fiber, such as Verizon's terrific "FiOS" service, is replacing it. Fiber allows Verizon and cable companies to provide "bundled" TV-Internet-Phone service cheaply and efficiently. The long-promised digital convergence is finally arriving!

Posted by: Richard | April 3, 2008 10:59 AM

McAdam is living in some kind of PR dream world when he jabbers about LTE, etc. Why don't we address the immediate problems of rounding up to the next minute, lost minutes at the end of the month, and Chatty Cathy telling us in tedious detail how to leave a voicemail, etc. All are huge ripoffs perped by Verizon. Technical service is excellent, but the marketing BS and predatory billing practices are ready and waiting for regulation.

Posted by: Bill | April 3, 2008 12:12 PM

The States of Maine, New Hampshire and Vermont might argue the points about how great Verizons commitment to FiOS really is...

Posted by: KraziJoe | April 3, 2008 12:52 PM

A reporter be able to spell "principles" seriously should we take a reporter who can't even spell?

Posted by: SAD | April 3, 2008 1:00 PM

When discussing customer service and the availability of wireless technologies, it's a shame that such a US-centric view is employed by the reporter.

McAdam should have been asked about the fairer billing systems and Plans used in Europe, the disconnection of Phone and Plan, what would allow high penetration of pay-by-cell-phone options in the USA, etc.

It's not supposed to be free advertising for Verizon it?

Posted by: SAD | April 3, 2008 1:06 PM

I just dropped their sorry a***s because of their poor service. I don't care how many new products you trott out and how much of the radio spectrum you own, if your customer service sucks, so do you.

Posted by: Kathy | April 3, 2008 4:09 PM

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