@ D6: Kevin Martin, Chairman, FCC, and Lowell McAdam, CEO, VZW: The “is” of Broadband & Open Access

The chairman of FCC, Kevin Martin, is under the fire right away, speaking at the D conference..he is asked about how U.S. is falling behind in broadband: “You have to look at this in context: demographics, geography, complexity. There are two issues: one if penetration, the other is the speed of broadband. The speed: people like Verizon (NYSE: VZ) are trying to upgrade, and we have proposed legislation to help that, and change the definition of what broadband is…We also need to change our subsidization system…we spend about $6 billion a year in subsidies to telecom companies. They are competing for subsidies and not for service.” Some steps the FCC is taking: “We have done a lot in 18 months to help some of the issues and hurdles in this. We also have streamlined the local franchising process. We have prohibited exclusives for a provider into an apartment building.”

Open access issues in wireless networks: Martin: “I think trying to develop a more wireless platform, to allow innovation in terms of hardware and apps is important. We are hearing this not just from consumer but also from entrepreneurs. The industry is in a very good position than it was a year ago…we are not there yet, but will get there. You have seen T-Mobile, Sprint (NYSE: S) (divestment of spectrum), Verizon (developer meetings) and others taking steps in that direction.”

Speaking with him is Lowell McAdam, the CEO of Verizon Wireless:

McAdam, on open network and the spectrum it won: “How do you get the innovation to move from the desktop to the handset..becoming open is that way. We have multiple devices and apps in our labs that will be launched by the end of this year. A lot of the early open spectrum is things like medical device makers and others. There is no reason why we want to be in there and let the market define itself.”

Early termination fee: McAdam: “We are going to tear down the early termination fee, and we pro-rate that over time. By the way, our churn is lowest in the industry…people are not flocking out of our services because of that.”

Martin: “The idea is to have it decline over time…some operators are doing it, some aren’t which is a problem. The reasonable amount of time for when early termination fee comes into place: should be about 14 days after the consumer gets the first bill (not 14 days as it is now for most carriers). The FCC needs to provide some reasonable guidance in this area, to the consumer.”