Verizon CEO Says He’s Weighing A Wireless Internet Pay TV Service

Verizon’s already talking to content creators about ways to enable subscribers to access video content nationally. “You could do a wireless over-the-top” — the jargon term for an Internet pay TV service — CEO Lowell McAdam told attendees at the Morgan Stanley Technology, Media & Telecom Conference. “We’re going to work with them and find a model.” That’s been difficult until recently, he says, because many programmers feared that a new service could upset a TV distribution system that’s been lucrative for them. But many now realize that with Internet pay TV “you can get a virtuous cycle” where everybody grows. Verizon took a step toward developing its own wireless over-the-top service in January when it bought Intel’s OnCue platform. “The set top box in an OnCue environment is a little bigger than the tip of my thumb,” McAdam says. Wireless offers Verizon a relatively inexpensive way around its aging copper wire network at a time when he sees signs of video cord cutting. A few  years ago his FiOS fiber optic service signed up an equal number of broadband and video customers. “Now we’re seeing significant divergence. People are buying a lot more broadband.”

Netflix has complained that its transmissions to Verizon broadband customers have been slowing — but McAdam says that should be resolved soon with a Netflix payment arrangement similar to the one it just cut with Comcast. “I’ve spoken live and via email with [Netflix CEO] Reed Hastings and I think we’ll  have an arrangement with them as well.” The Verizon chief adds that he’s content with the state of net neutrality regulation following a mixed court ruling in its challenge to the FCC’s rules. Although some groups are “trying to whip this up as an issue,” he says, “everyone has lowered the temperature a little.” FCC Chairman Tom Wheeler says he’ll crack down on ISPs that discriminate. “That’s what we’d like to see him do…You can’t just regulate the carriers.”

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