Potentially, he could walk away with a lot. His contract, on file with the U.S. Securities and Exchange Commission, grants him a series of cash payments, company shares and other things, some of which he’ll keep, some of which he won’t.

First off is the cash: Apotheker’s base salary was $1.2 million a year and according to my reading of his contract, he’ll be eligible for a severance plan that will pay him that salary for 18 months after termination.

He also received a $4 million cash signing bonus for joining HP. But depending on when and how he’s fired — with or without cause — he may have to give some of it back. The contract says that if he’s terminated within 18 months he has to return some of that signing bonus, specifically: “an amount equal to the Signing Bonus multiplied by a fraction with the numerator equaling 18 less the number of whole months that have elapsed from the Effective Date to the date of Executive’s termination of employment (the “Date of Termination”) and a denominator equal to eighteen (18).” I’m not going to do that math for you because I don’t get what the contract aims to say. Given that it’s been less than 12 months since he joined HP, let’s just assume he’ll be required to return most about 40 percent of it.

He’s also entitled to an incentive bonus that amounts to between 200 percent and 500 percent of his annual salary, based on HP’s existing incentive plan. The incentive plan isn’t spelled out in the contract, but since these plans are usually tied to stock performance I can’t imagine what payment he’d be entitled to under it. The contract stipulates that he gets at least some of it. More on that below.

Apotheker has also accumulated a fair amount of HP stock. He was granted 76,000 shares of HP stock, half of which vested on Oct. 31, 2010. The next day, HP shares closed at $42.49 a share, making the grant worth $1.6 million. Another grant of 38,000 shares is due to vest on Oct. 31 of this year. This block is worth a lot less: $889,000 as of the price of HP shares at the moment.

There were also one-time grants that were essentially a signing bonus package: 80,000 non-forfeitable shares, half of which are due to vest on Oct. 31, 2011, and the other half due to vest on Oct. 31, 2012. If terminated without cause within three years, these shares become fully vested. That’s another $1.9 million worth of HP shares. However, if terminated “with cause” then all the unvested equity goes poof and isn’t considered vested. This will make the “with cause” and “without cause” portion of the discussion with the board important.

Apotheker also got a lot of cash in relocation benefits, and was said to have purchased a six-bedroom house in Atherton, Calif., for $7 million. His relocation allowance amounted to $4.6 million, of which $2.9 million was to be devoted to the actual, uh, relocation, and $1.7 million of which was to compensate him for the forfeiture of payments and benefits he lost upon leaving his old job at SAP. This payment was fully vested right away and is not subject to repayment.

Update: Many thanks to reader Yogi who in the comments below appears to have done all the math much better than I could. His findings:

• $8.6 million: signing ($4 million) and relocation ($4.6 million) bonus.
• $3.6 million earned for one year of service (base $1.2 million + $2.4 million minimum bonus minimum according to contract).
• 156,000 shares of HP works out to about $3.8 million based on today’s price. Remember that all stock grants vest upon termination.
• $4.8 million severance payment: 2x the base salary plus minimum 2x bonus. This would be paid over 18 months and would stop if he gets a job with a competitor.
• 728,000 PRUs: This one is flexible, and is based on performance of the company, but automatically assuming cash flow has been achieved. Since PRUs are used as incentive for all HP management, Apotheker’s estimated achievement will be the same as for everyone else. Even at 50 percent, this would be worth about $9 million (364,000 shares), and at 75 percent it would be worth $13.5 million.

The range works out to be in the neighborhood of $28 million to $33 million.

See the clear-as-mud contract below.

apothekercontract

Some employees are alleging they were duped via complicated legalese and double-talk in employment contracts about how their shares would be handled upon termination or voluntary departure from the Internet telephony giant.

That matters, since Skype was recently sold to Microsoft for $8.5 billion, well above previous valuations. Thus, those who were, as a Skype PR person said, not in it to win it, um, lost.

Dramatic stuff, to be sure. But, even with all the fervor around the employment contract issue, the handwringing about what it means for compensation issues in Silicon Valley and a whole big dose of how private equity companies (in this case, a firm that had bought Skype called Silver Lake) are evil, it’s struck me as little more than an insider read-the-legally-obtuse-contract dispute.

And, although I love Reuters’ Felix Salmon’s epic tsk-tsking posts, that’s why I like to see real documents as proof of what people knew and when.

Apparently, a lot and rather clearly from this PowerPoint that was given to employees of Skype as of December 2009 as part of its changing ownership, after Silver Lake and other investors bought it from eBay.

While it’s not proof of what employees got it — typically, it is standard HR policy to hand this stuff out to everyone — and who read it (no accounting for slaggards!), it is pretty clear on what happens upon leaving Skype, either by a firing or quitting.

On the eighth slide, as you can see above, it says, in part:

“Good Leaver”: someone who gets fired without “Cause”

* Gets the fair-market value of their currently vested options

“Bad Leaver”: someone who resigns, or is fired for “Cause”

* Skype buys back their options at the lower of fair-market value or strike price

* This provision lapses post-IPO

It seems pretty buyer-beware clear, but check it out for yourself:

Skype – Employee Presentation

That’s according to Susquehanna analyst Jeffrey Fidacaro (and AT&T, which confirmed that percentage to me), who doesn’t see the launch of the iPhone on Verizon as a catastrophic event for AT&T at all. He thinks the carrier stands to lose two million iPhone users at most to Verizon–hardly a mass exodus.

AT&T’s decision last year to accelerate upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it, is proving a wise move indeed. What better deterrent to switching networks than the carrier’s $325 early termination fee?

In all likelihood, iPhone subscriber churn will be no worse at AT&T than it has been at other carriers that have lost iPhone exclusivity. As Matthew Key, CEO of Telefónica Europe, said during a February 2010 earnings call, “Ever since Vodafone has started selling the iPhone in January, we see absolutely no evidence of people leaving us, churning on the iPhone going back to Orange or Vodafone, so [we are] very comfortable with our iPhone volumes. We continue to out-trade the market and no sign of churn whatsoever.”

This will be short and–considering the topic–bittersweet.

Despite a report in TechCrunch saying layoffs at Yahoo might be imminent, previously reported termination of employees in its product unit will not take place this week.

Actually, according to sources familiar with the situation, they will take place in about two weeks, around December 13th.

As BoomTown previously reported earlier this month, the cuts in staff will total about 10 percent and be almost completely centered on the product organization under Chief Product Officer Blake Irving.

That would mean layoffs of about 650, since that part of Yahoo has about 6,500 employees.

In addition, said sources, the layoffs might result in the outsourcing of some functions at the company.

The move will surely be yet another blow to morale at the much-buffeted Silicon Valley Internet giant.

Google recently gave each of its employees a 10 percent pay raise and $1,000. Facebook, similarly, is showering benefits on its fast-growing pool of workers.

Yahoo currently has just over 14,000 employees. It has undergone many restructurings and layoffs.

As BoomTown promised earlier today, here’s the first of many filings related to the Yahoo-Microsoft online search and advertising deal announced last week.

The 8-K filing was made with the Securities and Exchange Commission by Yahoo.

Some highlights, although most of them are not that new:

* No termination fee.

* There is a $50 million annual payment to Yahoo (YHOO) by Microsoft (MSFT) for three years, for unspecified “transition and implementation costs” beyond the agreement.

(Personally, I think it’s for extra Advil needed for the headaches engendered organizing this circus.)

* At least 400 Yahoo employees will be hired by Microsoft, which will also provide funds for retention packages to keep 150 more Yahoos motivated during the transition.

* The “Definitive Agreement” between the Silicon Valley company and the Redmond, Wash., software giant needs to be sketched out by October 27, 2009.

But why don’t you read all the niggling details yourself, including about Google (GOOG), below (I stripped away only minor SEC legalese and fill-in-the-blank details):

Item 1.01. Entry into a Material Definitive Agreement.

Binding Letter Agreement–General Terms

On July 29, 2009, Yahoo! Inc., a Delaware corporation (“Yahoo!”), and Microsoft Corporation, a Washington corporation (“Microsoft”), entered into a binding letter agreement (the “Letter Agreement”), pursuant to which the parties will negotiate and execute a Search and Advertising Services and Sales Agreement and a License Agreement (the “Definitive Agreements”), each reflecting and supplementing the provisions of such Definitive Agreements as set forth in annexes to the Letter Agreement, the material provisions of which are summarized below.

Negotiation and Execution of the Definitive Agreements

Pursuant to the terms of the Letter Agreement, the parties will negotiate and execute the Definitive Agreements as soon as practicable but in any event by October 27, 2009 (the “Negotiation Period”). If the Definitive Agreements are not executed during the Negotiation Period, the parties will submit any disputes regarding the final terms of the Definitive Agreements to an arbitration panel. The arbitration panel will render its decision based upon the terms of the Letter Agreement, the nature of the commercial relationship to be created thereunder, and the submissions and presentations of the parties at a hearing conducted by the arbitration panel. The arbitration panel will render a decision by choosing the final proposed contractual language of either Microsoft or Yahoo! without modification, subject to a final review process to resolve any potential inconsistencies. The decision of the arbitration panel will be binding on the parties, and the parties agree to execute Definitive Agreements as determined by the arbitration panel within three (3) days of the receipt of the arbitration panel’s final decision.

Regulatory Review

Microsoft and Yahoo! agree to use their respective best efforts to cooperate in connection with all necessary regulatory filings. In addition, as soon as practicable after July 29, 2009, Microsoft and Yahoo! will make all filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as amended (the “HSR Act”) and by any applicable foreign antitrust laws. Microsoft further agrees to use its best efforts to obtain any consents, clearances or approvals required under or in connection with the HSR Act or any other applicable antitrust law, including offering, negotiating or committing to any restrictions on the activities of Microsoft and its subsidiaries in search and paid search and contesting and defending any threatened or pending litigation, investigation or proceeding under applicable antitrust laws.

Conditions to Commencement and Termination Prior to Commencement

The obligations of each party to commence performance of their obligations under the Definitive Agreements (the “Commencement Date”) are only subject to (a) termination or expiration of the HSR Act waiting period and receipt of certain required foreign antitrust approvals and (b) the accuracy of the party’s representations and warranties in the Letter Agreement as of the time immediately prior to the Commencement Date and performance by the other party of its obligations required to be performed by it in connection with the Letter Agreement and the Definitive Agreements at or prior to the Commencement Date, except where the failure of such representations and warranties to be true and accurate or the failure of such performance would not, individually or in the aggregate, have a material adverse effect with respect to such party.

Prior to the Commencement Date, the Letter Agreement and Definitive Agreements may be terminated only by (a) mutual consent, (b) if a breach renders a condition incapable of being satisfied by the Termination Date (as defined below), or (c) if the conditions to commencement have not been satisfied by July 29, 2010 (the “Termination Date”); provided that Yahoo!, in its sole discretion, has the right to extend the Termination Date by six (6) months if the required antitrust approvals have not yet been obtained.

Search and Advertising Services and Sales Agreement

Pursuant to the Letter Agreement, the parties have agreed to enter into a global Search and Advertising Services and Sales Agreement (“Search Agreement”), which will include, among other provisions, the terms summarized below.

General Services

For a period of ten (10) years beginning on the Commencement Date (the “Term”), Microsoft will be Yahoo!’s exclusive technology provider for algorithmic and paid search services and Microsoft will provide contextual advertising to Yahoo! on a non-exclusive basis. Yahoo! will be the exclusive worldwide relationship sales force for Yahoo!’s and Microsoft’s premium search advertisers.

The services provided by Microsoft under the Search Agreement will be provided on all web sites, applications and other online digital properties owned or operated by or on behalf of (a) Yahoo!, Yahoo! subsidiaries and Yahoo! joint venture relationships, as well as on software applications developed or distributed by Yahoo! or Yahoo! subsidiaries that provide access to or enable algorithmic search services or paid search services (“Yahoo! Properties”) and (b) Yahoo! Syndication Partners (as defined below), as well as software applications developed or distributed by Yahoo!’s Syndication Partners that provide access to or enable algorithmic search services or paid search services from Yahoo! (“Syndication Properties”). “Syndication Partner” means a third party with whom Yahoo! has contracted to provide algorithmic search services or paid search services.

Subject to certain specified restrictions, Yahoo! will have full flexibility with respect to the user experience, content and look and feel on all of its web pages, and will also be entitled to use the paid search services and algorithmic search services for non-internet search queries with minimal restriction.

The scope of the services to be provided by Microsoft under the Search Agreement are limited to web sites, applications and other online digital properties designed for use and consumption on personal computers. In addition, Yahoo! may at its option elect to receive Microsoft’s mapping services and mobile search services. Yahoo! may implement each of the mapping services and the mobile search services on a non-exclusive or an exclusive basis. Yahoo! also has the option to work with Microsoft to implement the services on other platforms. If Yahoo! elects to receive services for other platforms, it must receive such services on an exclusive basis.

Revenue Share Payments and Other Payments

During the first five years of the Term, Yahoo! will be entitled to receive 88% of the net revenues generated from Microsoft’s services on Yahoo! Properties (the “Revenue Share Rate”). Yahoo! will also be entitled to receive its share (at the Revenue Share Rate) of the net revenues generated on Syndication Properties after the Syndication Partner’s share of net revenues is deducted. For new Syndication Properties during the Term, and for all Syndication Properties after the first five years of the Term, Yahoo! will receive its share (at the Revenue Share Rate) of the net revenues generated from Microsoft’s services on Syndication Properties after the Syndication Partner’s share of net revenues and certain Microsoft costs are deducted.

On the fifth anniversary of the Commencement Date, Microsoft will have the option to terminate Yahoo!’s sales exclusivity for premium search advertisers. If Microsoft exercises its option, the Revenue Share Rate will increase to 93% for the remainder of the Term, unless Yahoo! exercises its option to retain its sales exclusivity, in which case the Revenue Share Rate would be reduced to 83% for the remainder of the Term. If Microsoft does not exercise such option, the Revenue Share Rate will be 90% for the remainder of the Term.

Microsoft will also pay Yahoo! a payment of $50 million annually during the first three (3) years of the Search Agreement. Yahoo! may use these payments to partially cover transition and implementation costs not otherwise covered under the Search Agreement.

Microsoft will provide in each country an 18-month guarantee for the gross revenue per search (the “RPS”) for Yahoo! Properties. The guarantee will be based on the RPS average for the trailing 12-month period prior to the initial implementation of paid search services in such country.

Termination Provisions

In addition to the termination rights described in the Letter Agreement above, the Search Agreement may only be terminated as follows (each, a “Termination Event”): (a) either party may terminate upon repeated material breaches of material provisions of the Search Agreement such that it is unlikely that the breaching party is willing or able to continue to perform its obligations under the Search Agreement without continuing to materially breach it; (b) Yahoo! may terminate if Microsoft attempts to exit the business of algorithmic search or search monetization, either by ceasing to offer the services or by selling or attempting to sell all or substantially all of either its algorithmic search services business or paid search services business to an unaffiliated third party; (c) Yahoo! may terminate the Search Agreement if the trailing 12-month average of the RPS in the United States (the “U.S. RPS”) of Yahoo! and Microsoft’s combined queries falls below a specified percentage of Google Inc.’s (“Google”) estimated RPS measured on a comparable basis or if the combined Yahoo! and Microsoft query market share in the United States falls below a specified percentage; (d) on the fifth anniversary of the Search Agreement, and any time thereafter, Yahoo! has the right to terminate the Search Agreement if the trailing 12-month average of Yahoo!’s U.S. RPS is less than a specified percentage of Google’s estimated RPS; or (e) subject to exceptions, either party may terminate if a law, regulation or order would have a significant, adverse impact on a primary aspect of such party’s intended benefit of the Search Agreement.

If a Termination Event occurs in the United States, the entire Search Agreement may be terminated. If a Termination Event does not occur in the United States a party’s termination right is limited to the specific country or countries in which the event occurs.

If Microsoft proposes or attempts to sell all or substantially all of either its algorithmic search services business or paid search services business to an unaffiliated third party, Yahoo! will have a right of first refusal and right of last offer to purchase such businesses.

Service Level Agreements

The Search Agreement will provide (a) for service parity under which applicable application programming interfaces (“Microsoft API”) will be made available to Yahoo! at full parity with that which is made available to Microsoft’s internal teams; (b) for ranking and content parity under which Microsoft will provide the same algorithmic and paid search results in the same order as would be provided in response to the same inputs on web sites that are owned or operated by or for Microsoft, its subsidiaries and its joint venture relationships (“Microsoft O&O Properties”) in a particular country, including any content that is included in Microsoft’s algorithmic index; (c) for prioritization parity, under which Yahoo! will have full visibility into Microsoft product roadmap and parity with Microsoft’s internal teams in the product update prioritization process; and (d) for advertising parity under which neither party will allow advertisers to designate paid listings from Microsoft’s paid search or encourage advertisers to designate paid listings from Microsoft’s contextual advertising services to be displayed exclusively on Microsoft’s or Yahoo!’s respective results web pages. Furthermore, Microsoft will not treat Yahoo! or Yahoo!’s Syndication Partners less favorably than Microsoft and Microsoft’s partners in connection with its delivery and operation of the services.

Microsoft will optimize the delivery of paid listings by evaluating performance across all Microsoft O&O Properties and the Yahoo! Properties. The paid listings provided by Microsoft for Yahoo! will be optimized at parity with Microsoft’s optimization for Microsoft O&O Properties. Yahoo! may further optimize based on its own desired implementation.

Yahoo! may, at its option, elect to have Microsoft deliver the algorithmic search services and paid search services through a search results page hosted by Microsoft (the “White Label Solution”) on a country by country basis (if the United States is also a White Label Solution country), instead of through the Microsoft API. The White Label Solution will be in all material respects the same as Microsoft’s search results pages. Yahoo! may substitute Yahoo! applications or services for Microsoft applications or services within the White Label Solution.

Data Provisions

Microsoft will provide Yahoo! all data it collects as a result of its implementation of the services on Yahoo! Properties and Syndication Properties and, subject to Yahoo!’s privacy policies and applicable law, Yahoo! may use such data without contractual restriction in connection with its businesses. Microsoft will also use commercially reasonable efforts to enable Yahoo! and its Syndication Partners to obtain any other data that Yahoo! currently collects with respect to its own algorithmic search services and paid search services. Microsoft may obtain and use the data it collects as a result of its implementation of the services (including any derivative information that results from this data) only for the purpose of operating and enhancing the services and not for other Microsoft products and services.

Transition and Implementation Plan

As promptly as practicable, Yahoo! and Microsoft will agree on a detailed transition and implementation plan and schedule for implementing Microsoft’s algorithmic search services and paid search services on all Yahoo! Properties and Syndication Properties. The transition and implementation plan will be for a period of no longer than 24 months from the Commencement Date, subject to an extension for up to three additional months if the end of the 24-month period ends during the fourth quarter of a calendar year. The parties intend that the transition and implementation plan will be either set forth in a separate transition services agreement or as part of the Search Agreement.

Following the Commencement Date, Microsoft will hire not less than 400 Yahoo! employees (the “Transferred Employees”) and will offer the Transferred Employees market competitive compensation packages. In addition, Yahoo! and Microsoft will mutually agree on a retention plan to be paid for by Microsoft to assist in retaining the Transferred Employees and an additional 150 Yahoo! employees to be mutually agreed upon between Microsoft and Yahoo! to assist with providing the transition services.

License Agreement

Pursuant to the Letter Agreement, the parties have agreed to enter into a License Agreement (the “License Agreement”), which will include, among other provisions, the terms summarized below.

Exclusive Technology License

During the Term (as defined in the summary of the Search Agreement above), Yahoo! will grant to Microsoft a worldwide license (the “Technology License”) under copyrights and trade secrets relating to specified Yahoo! algorithmic and paid search technology for Microsoft to use in connection with providing specified algorithmic search, paid search and contextual advertising services (the “Field of Use”). The Technology License will be exclusive (even as to Yahoo!) as to certain algorithmic search and paid search services in the Field of Use. Upon termination or expiration of the Search Agreement, the Technology License will remain in effect but will become non-exclusive.

Limited Non-Exclusive Patent Cross License

During the Term, Yahoo! will grant to Microsoft a worldwide, non-exclusive limited patent license solely for Microsoft to provide services in the Field of Use to Yahoo!; and Microsoft will grant to Yahoo! a worldwide, non-exclusive limited patent license for Yahoo! to use and implement the services provided by Microsoft, as contemplated by the Search Agreement (the “Limited Patent Cross License”). The Limited Patent Cross License terminates upon the termination of the Search Agreement.

Patent License Option

Microsoft will also have an option to obtain from Yahoo! a worldwide, non-exclusive license under Yahoo!’s patents for Microsoft to provide online services in the Field of Use both with Microsoft’s owned and operated websites and to third parties (“Patent License”). The option will expire upon the earlier of July 29, 2011 and the date six (6) months following the Commencement Date. Should Microsoft exercise its option to obtain the Patent License, Microsoft will pay for such Patent License at a specified discount from fair market value. Such Patent License will also terminate upon termination of the Search Agreement.

Yahoo! may terminate the Patent License if Microsoft files an infringement action against Yahoo!, Yahoo! subsidiaries or Yahoo! joint venture relationships. Termination of the Patent License does not affect Microsoft’s obligations under the Search Agreement.

Assignment and Transfer

Microsoft may not assign the License Agreement without Yahoo!’s permission. Assignment or transfer of the licensed technology will be subject to the licenses. Neither party is prevented or restricted from licensing, selling or otherwise disposing of any of its patent assets, and Microsoft’s option to obtain the Patent License will not apply to any patents sold or otherwise disposed of by Yahoo! prior to the exercise of the option.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

YAHOO! INC. (Registrant)
By: /s/ Michael J. Callahan
Name: Michael J. Callahan
Title: Executive Vice President, General Counsel and Secretary
Date: August 4, 2009

But–as many readers have requested–they will all be available in their entirety in this column.

Here’s an interview Walt Mossberg and I did with Federal Communications Commission Chairman Kevin Martin and Verizon Wireless (VZ) CEO Lowell McAdam jointly. We paired the two together to talk about big issues facing the wireless industry, including low broadband speeds and high prices.

The video of the interview is in three parts, all of which I will post this week.

In this second part, McAdam talks about the wireless giant’s open network initiatives and the impact of aggressive efforts by Google (GOOG) in the space, termination fees and subsidy issues, while Martin discusses the key issues the FCC will be facing, including the transition of the broadcast industry from analog to digital and network neutrality.

Well, this should be interesting. Because of scheduling issues, Kevin Martin and Lowell McAdam will be interviewed at the same time. Will the two hit it off on issues of Net neutrality, early termination fees, open access or none of the above?

Kevin J. Martin is chairman of the Federal Communications Commission, where he has served as a commissioner since 2001 and as chairman since 2005. During his term, he has conducted a balancing act between the interests of the technology and telecommunications industries. He mostly sided with Google (GOOG) in the effort to impose new openness rules on a large chunk of spectrum the FCC recently auctioned, and he has been publicly critical of the cable TV companies. He could be an important player in the battle over Net neutrality.

Lowell McAdam is president and CEO of Verizon Wireless (VZ), the nation’s second-largest wireless voice and data provider, and is chairman of the board of directors of CTIA, the wireless industry’s trade association and lobbying group. An engineer by training, Mr. McAdam has been an outspoken defender of the wireless industry’s practices, even when they have been criticized by the technology industry. However, he has recently launched an initiative to create a parallel “open” system at Verizon, which the company claims will allow any device and any application to operate on its network without interference from Verizon.

• Pulling up a chart that showcases the lousy broadband situation in the states, Walt kicks the conversation off with a hardball question for Martin: “You’re the chairman of the FCC,” says Walt. “How did you allow this to happen?” Big applause.
• Martin tries to dodge a bit, suggesting that the chart shows penetration. Walt corrects him, noting that what it actually shows are broadband speeds that are abysmal.
• Martin says he feels it’s important that we improve both penetration and speed. Walt is not letting him off that easy, jumping back in to point out that not only do broadband speeds in the states stink, but that we also pay as much as four times what people in other countries pay for better, faster broadband.

• Martin says we need a new and better definition for broadband.
• Kara asks about the political side to this issue. Should we treat broadband the same as we treat public highways? Martin says it’s something to consider, adding that we need to switch the system from a voice-grade one to a broadband-grade one. We should be subsidizing ONLY broadband services, not voice. (Hmm. Haven’t we subsidized them enough already? To the tune of $200 billion. See Nothing That a Two-Tiered Internet Couldn’t Fix, Right?)
• McAdam jumps in, noting the barriers that are delaying forward movement here. Martin parries, claiming that the FCC is working actively to remove these barriers.
• Walt asks if Martin has the statutory authority to streamline this process. Martin says he doesn’t know. Decisions like these are all in court right now.
• McAdam says there’s a tendency to think that carriers don’t want to deploy better services. We do, he says, but often, we’re held up by local government, which doesn’t like the location we’ve chosen for a tower, and whatnot.
• Moving on to spectrum auction and open access, Martin says open access is important, and that he’s heard that from not just entrepreneurs, but consumers as well. Martin talks about the open-access provision placed on the spectrum Verizon just won at the recent 700 MHz auction. Many advances this year: Sprint divesting spectrum to Clearwire. T-Mobile (DT) opening up, etc. “There’s been a significant change in the wireless industry just this year,” says Martin. “It’s embracing openness.”
• Kara asks if this isn’t in part due to Google and its efforts in the auction. McAdam: “Well, let’s not give them too much credit …” (Apparently, open access was really Verizon’s idea …)
• McAdam says Verizon has fully open devices in its labs right now. Walt asks when we’ll see them. McAdam: A few weeks. Walt asks why these devices are in Verzion’s lab at all. McAdam says Verizon needs to make sure they work on its network and don’t impact its customers.
• Walt brings up the pricing issue. You’ll essentially be running two pricing systems: the company-store system, which subsidizes handset purchases made with a long-term contracts, and the open system. Will consumers who use non-Verizon phones on Verizon’s network get the same level of support as those who use Verizon-subsidized ones? Walt asks. McAdam says yes. There’s no reason not to do any differently.
• Moving on to termination fees, Walt mentions recent class-action suits against wireless carriers. How do you justify charging people $200 for canceling their contracts early? Apparently, McAdam doesn’t need to: “We don’t do that anymore.” Verizon says it now pro-rates its phone subsidies and also offers customers the option of purchasing phones at a higher price, without a subsidy.
• But isn’t the subsidy just an artifact, something you did to increase cellphone penetration? McAdam agrees that it is and says he’d dump subsidies tomorrow if Martin and Co. made them illegal.
• Martin’s take on this issue? He feels consumers should have a window during which they can cancel their contract without penalty. Enough time to evaluate the service … say, a month or so.
• What’s the impact of changing to a model like this? Martin notes that these subsidies extend to other platforms like cable, and need to be carefully thought out.
• Kara: What’s the most significant technology issue the FCC will face after the next election? Martin replies that the transition from analog to digital TV will certainly be among them. He talks about the need to educate the public about the transition. Walt notes that there’s an enormous amount of public confusion around this. Martin agrees, but says it will dissipate when the public has been better educated.
• Another big issue is Net neutrality, says Martin. Kara: Well, you know what this crowd thinks about that, don’t you? Martin deadpans, notes that the FCC does have complaints before it about the issue. The commission needs to address in a constructive way the right of the consumer to have unfettered access to the Net. That said, he adds, broadband providers do need to be able to manage their networks.
• Walt asks McAdam about Verizon’s EVDO service and if Verizon is concerned about AT&T’s claim that it can double the speed of its offering with a simple software change. Walt recalls that AT&T (T) once told him Verizon and other carriers like it are stuck because they committed to CDMA. McAdam dismisses such assertions, claiming that there are a whole host of issues at play here. Deployment, devices, etc. He seems to feel CDMA has quite a bit of road left ahead of it.
• Kara asks Martin about innovation. Martin says he’s been walking a very careful line between innovation and regulation: We need to encourage investment in infrastructure and innovation, he says, but we also need to ensure that its fruits are regulated in such a way that they remain in consumers’ best interest.
• Moving on to the audience Q&A … Question about misleading coverage maps. McAdam notes that every carrier has a different metric for what constitutes wireless coverage. He’d love for there to be a standard that everyone can agree to, so that carriers could offer accurate coverage maps.
• Q: Shouldn’t fees for open-access customers be cheaper since they don’t require carriers to offer subsidies? McAdam says he’ll let the market decide that.

For more coverage, see The Wall Street Journal.

A note about our coverage: This live blog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations expeditiously written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.