Hackers make “billions” of attacks on Verizon each month

July 20, 2011, 5:58 PM UTC

By Stacy Cowley, CNNMoney tech editor

FORTUNE — Hackers make “literally billions” of attempts each month to break into Verizon’s firewalls, Verizon President Lowell McAdam said Wednesday in a discussion at Brainstorm Tech that touched on one of this week’s hot topics, phone hacking.

Watching the giant brouhaha unfold over News International’s black-ops practice of breaking into the voice mail of celebrities and other newsmakers has been a bit frustrating it confuses the issue, McAdam said. True hacking involves a technical assault on protected systems; the News of the World hacks appear to have been made possible through a much more basic vulnerability: poor password protection. Too many users rely on widely known default passwords or easily broken common ones.

That’s a growing problem as the line between corporate and consumer technology starts blurring. Dazzled by their iPads, smartphones and Web applications, workers are increasingly bringing those devices into the workplace and demanding that enterprise gadgets have the same elegant, intuitive interfaces. Security is the biggest challenge rising from that trend.

“What people expect on their smartphone for personal use versus what any company requires is huge,” McAdam said.

The iPhone came up again in a talk about how finally landing Apple’s (AAPL) iconic phone earlier this year has affected Verizon’s brand. McAdam dismissed as a “favorite folk lore” the idea that Verizon had its chance at being the device’s launch carrier in 2007 and walked away.

“Steve Jobs is not a stupid person. He is going to go where the volume is, and the volume for him was in GSM,” McAdam said, referring to a network standard widely used around the globe and by AT&T, but not by Verizon. “He made a strategic decision and it was the right decision. Now they made a decision to build a CDMA version, and you saw from their results yesterday that that was the right decision.”

McAdam is the heir-in-waiting to Verizon CEO Ivan Seidenberg, who has said he plans to step aside this year and hand over the company’s reigns. McAdam said there’s no specific timeline yet for the official change, beyond “before 2012.”

“There’s no rush from my perspective,” he said. “He can deal with the shareholders and the board and I can scurry about the company causing mischief.”

He’ll take over a company at the vanguard of a rapidly changing industry. AT&T (T) currently has a slight lead over Verizon (VZ) in its U.S. customer count, but AT&T will be by far the bigger carrier if its proposed T-Mobile merger gets regulatory approval and goes through. McAdam said his bet is that it will.

“It’s a merger I think AT&T had to do, because we have a failed spectrum policy in this country. There’s a lot of spectrum out there, but it’s in the wrong people’s hands,” he said.

T-Mobile is sitting on a big spectrum allocation; AT&T says it has the financial resources the smaller carrier lacks to actively build out that spectrum. McAdam blasted the Federal Communications Commission’s approach to allocating the scarce resource.

“I think government policy is what put us in this position,” McAdam said.  “We’ve chopped up a lot of the spectrum into such small pieces … and encouraged people to buy it, hold it and flip it in 10 years. That doesn’t help the nation deliver broadband to these rural communities.”

Read the full transcript here.

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