Competition, Technology Are Re-inventing Telecommunications Industry

STATE COLLEGE, Pa. - Competition -- not regulation -- has brought down prices, stimulated innovation and enhanced consumer choice in the telecommunications industry, Verizon Pennsylvania's president told a gathering of state educators last night.

''The telecommunications industry needs less, not more, regulation,'' said Daniel J. Whelan, president and CEO of Verizon Pennsylvania. ''We should be moving aggressively to change the regulatory paradigm at both the state and federal level to make competition more open and even-handed.''

Addressing participants of Penn State's 2001 Faculty Academy held at the Penn Stater Conference Center, Whelan said that technology is challenging Verizon to harness the power of new technologies and reinvent itself around the realities of these new technologies and new customer expectations.

''Technology is transforming Verizon's network into a platform for a whole host of new applications,'' Whelan said. ''It is challenging Verizon to move beyond just doing things better or faster. We need to invent the next generation of services made possible only by the Web itself.''

Whelan said, contrary to what some competitors and their front groups have claimed, Verizon's network is a tremendous asset with unlimited potential for bringing the latest technology and innovation to customers.

''The real opportunities are the ones we don't even know about yet but will be created by the next wave of technological innovations, products and capabilities that Verizon can deliver over its network,'' Whelan said.

Whelan stressed that old regulatory models do not apply to new technology and innovation and that outmoded policies have inhibited competition and slowed investment in new service deployment.

''We need policies that encourage investment,'' said Whelan. ''And we need policies that promote service development and deployment.''

Whelan said the Federal Communications Commission (FCC) seems open to a more market-oriented approach to regulating the industry and that, as regulatory barriers come down, Verizon will be better able to address markets that were previously closed to it, such as long distance.

Whelan said that long-distance competition is the fastest route to competition and innovation in the local phone market and described the highly competitive local telephone market operating in Pennsylvania.

According to Whelan:

• Verizon competitors now serve at least one million phone lines in the state, more than 14 percent of the phone lines in Verizon Pennsylvania's service area.

• According to the FCC, the percentage of Pennsylvania phone lines served by competitors grew 25 percent in the second half of last year alone.

• Some 92 local telephone competitors are now actively competing in Pennsylvania.

''Competition is bringing down prices and stimulating technological innovations,'' said Whelan. ''That's precisely what customers expect: more choices, excellent service and less confusion. As has happened in the wireless industry, the speed with which these benefits occur increases as regulation decreases.''

The 2001 Faculty Academy Program is sponsored by Penn State's School of Information Sciences and Technology and Office of Information Systems, the Pennsylvania Department of Education and Verizon Foundation. The conference is designed to help educators leverage the power of technology in their classrooms. Attendees include faculty and administrators from Pennsylvania colleges and universities as well as teachers from kindergarten through 12^th grade.

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Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 112 million access line equivalents and 27 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with approximately 260,000 employees and more than $65 billion in annual revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com