Verizon CEO Drops OTT Hints

Verizon’s 2015 acquisition of AOL and its pending one for certain assets of Yahoo fit into plan to kick the tires on a new over-the-top video play, Lowell McAdam, chairman and CEO, said Monday at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston.

“The platform will be in place to do an over-the-top sort of play…and we’ll go out and test it,” McAdam said. “But we have not committed to a launch date or anything. We’re going to see how this evolves.”

Verizon, which recently retooled its free, ad-based OTT service, go90, is reportedly working on a national OTT TV service that would feature “dozens” of channels. Such a move would put Verizon in the virtual MVPD category alongside several others, including Sling TV, DirecTV Now, fuboTV, PlayStation Vue, Hulu and YouTube TV.

REPORT: Verizon to Join Virtual MVPD Race: Report

McAdam didn’t spell out exactly what Verizon has in mind, but pointed to other OTT efforts already underway, including a digital joint venture with Hearst, its exclusive NFL deal to offer NFL games on mobile devices, and a recent deal to offer National Women's Soccer League (NWSL) games on go90.

RELATED: go90 Nets NWSL Deal

As far as how OTT fits into the AOL-Yahoo strategy, McAdam pointed out that Tim Armstrong, AOL’s CEO, has been focused on several content “pillars” that include news, sports, finance, entertainment and lifestyle.

McAdam also said Verizon remains optimistic about using 5G as a wired replacement/alternative for gigabit-class wired broadband service and, generally, how 5G can square with Verizon’s out-of-footprint TV and broadband strategy.

“As we have built that architecture, 5G, on a fixed broadband perspective was the best application for us,” he said. “We did not need to wait for all of the mobile standards, we didn't have to wait for it to be…crammed into an iPhone or a Samsung Galaxy device. You can use basically your home router that you have today, just put some different chips in it. We’re working with Intel on that…and you are then a broadband provider and a TV provider outside of your franchise footprint.”

He also downplayed concerns that 5G, as a fixed wireless technology used in millimeter wave spectrum, would require line-of-sight and would have trouble dealing with obstacles such a trees and buildings.

McAdam warned against locking into wireless “design principals from the 2000s,” holding that the cost for small cells have come down and that antenna technology has improved.

He noted that the expectation was that Verizon was expecting less than 1,000 feet of propagation to deliver gigabit speeds, but found that field trials and efforts in South Korea have shown that “we're seeing substantially more than that 1,000-foot propagation.”

“So, we're feeling very bullish on it at this point, and we'll be able to say more about that after we go through the trials over the summer,” McAdam said.

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