eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Verizon Chairman and CEO Lowell McAdam, a man not known for mincing words, sat down with JP Morgan analyst Phil Cusick at the investment firm’s Global Technology, Media and Telecom Conference May 20. Below are nine key takeaways from their conversation.
1. Verizon isn’t planning to buy Dish Networks.
“We just did a $130 billion merger, in my view,” said McAdam, referring to Verizon buying out Vodafone’s portion of Verizon Wireless. “So, I don’t feel the need to do anything else at this point. You could debate the merits of a DirecTV/AT&T deal, but I think it made sense for both of those parties. … I know there are reports out there that we’re talking to Dish. I can tell you that that’s somebody’s fantasy. There have not been any discussions and there aren’t any discussions going on with Dish.”
2. That’s not to say Dish couldn’t benefit Verizon.
“Now, I think Dish has some interesting assets and there are things that [companies] like Verizon and Dish could do together,” said McAdam. “But I don’t feel that owning a satellite company is something that I’m finding intriguing at this point. And we’re much more interested in the video transport, over-to-the-top, mobile-first sort of application, versus a linear play.”
3. It doesn’t really matter if the little guys merge.
“I don’t spend a lot of my time worrying about whether there is consolidation,” said McAdam. “We can certainly compete in a four-player market. If there becomes a [three-player] market, the economists would argue we’d probably be better off. There will be a period of distraction during approval process. … After that, typically the three-player markets are more stable than four-player markets.”
4. Verizon is totally participating in the AWS wireless spectrum auction.
McAdam congratulated Federal Communications Commission Chairman Tom Wheeler on what he’s been able to orchestrate around the wireless spectrum incentive auction planned for mid-2015.
“AWS makes sense for us,” McAdam said. “You’ve seen us do some trades here recently with T-Mobile, where we got AWS and we gave them some of the 700 A and B. … So I am expecting to participate fully in AWS.”
5. Broadband is a bigger business than pay TV.
“The broadband pipe and the over-the-top play is where we want to make sure we are well-positioned, versus continuation of linear TV,” said McAdam. “Because the content costs are going up so much, I think a pure broadband play, for us, is at least as attractive—or I would argue a bit more attractive for us—and we are encouraged by that trend.”
The Best 9 Things Verizon’s CEO Said at the JP Morgan Conference
6. Verizon has TV content deals in the works.
“If you look at the video jukebox sort of services—the Hulus, the Netflix, the Kindle Fire—and you create something like that, that a customer can pull down from the cloud what they want when they want it, and you have a much broader array of content—YouTube types of content—… I think that is a very attractive model for us,” said McAdam.
He clarified not to expect 80 bundled channels running over OnCue, but content that can be pulled down. Verizon is talking with CBS and ABC and hopes to offer some of their content.
7. Bruno Mars helped Verizon’s bottom line.
Verizon is a sponsor of MetLife Stadium, and before the Super Bowl it put up additional cell sites.
“In one hour of this year’s Super Bowl, we carried more traffic than the entire game in New Orleans a year ago,” said McAdam. “Everyone was shooting Bruno Mars and shooting the helicopters going over and uploading all of that data. It just shows you what the potential could be as video becomes more and more dominant [and] the driver of the network traffic.”
8. There are money-making opportunities in Brooklyn’s lousy parking situation.
There are very practical implementations in embedding chips in the paint used to outline parking spots, said McAdam. “There is actually an interesting study in Brooklyn that says 40 percent of the fuel burned in Brooklyn is by drivers driving around trying to find a parking spot. I mean, even if it’s 10 percent, you can make that more efficient by notifying the car where an empty parking spot is. … There is a lot of interest in that, and I think that is another area of opportunity for us.
9. In the net neutrality fight, a Title II designation isn’t the way to go.
“Title II is absolutely the wrong way to go. If you talk to the people in Silicon Valley, they agree. I mean, they signed letters to the FCC calling for an open Internet—I’d sign that exact letter as well, no issue,” said McAdam.
A Title II designation, he continued, will “dry up the Internet. … Once you try to start regulating the Silicon Valley companies—I think things move way too fast for a regulatory agency in Washington to keep up with that. So my guess is that cooler heads will prevail here. As I say, Chairman Wheeler understands the business pretty well, and he will certainly hear everybody’s point of view. But I don’t think Title II is a legitimate threat at this point.”