Verizon CEO Urges FCC to Lead a Revival Of Communications Industry

WASHINGTON - Saying the Federal Communications Commission has a golden opportunity to restore the link between rational economics and investment in technology, Verizon CEO Ivan Seidenberg today expressed hope that the FCC will take a big step in that direction in its upcoming triennial review decision.

"It's important that we get this right so we can stop fighting the battles of the past and focus on what will make the U.S. a broadband leader in the future," Seidenberg told an audience of communications and technology investors during a luncheon speech at a workshop sponsored by Precursor Group.

"Verizon is one of the few companies with the scale, the capital capacity, and the will to move the needle on the broadband speedometer," said Seidenberg. "The question is whether the FCC will reform the existing rules in a way that makes it worthwhile for Verizon to step on the gas."

New Policies Will Benefit Customers, Restore Investor Confidence

New pro-investment policies will benefit consumers by sparking innovation. Verizon is already working with strategic partners like Microsoft to deliver the next generation of wireless data, portal and Internet services and to marry them to services like Caller ID and universal messaging, said Seidenberg. The company also is studying ways to incorporate new technologies like Wi-Fi to extend features and functionality of DSL.

"We need to put customers - not government - back at the center of the conversation about the future of communications," said Seidenberg. "We're confident that Verizon can play a leadership role in restoring the communications industry to its rightful, historical place in the U.S. economy as an engine of growth, productivity, innovation and job creation."

Next week, the FCC is expected to announce changes in outdated telecommunications rules that could stimulate investment in high-speed Internet technology. The commission has the opportunity to remove regulatory burdens unique to telecom and enable Verizon and other companies to make investment decisions like every other technology-driven business in America.

Seidenberg said investments in new technologies and emerging markets are the most sensitive to changes in policy. It will take a huge capital outlay - as much as $128 billion by some estimates - to upgrade the entire U.S. infrastructure. Verizon has to weigh its broadband investments against other investment opportunities in the wireline business, such as the Enterprise market, and in growing businesses such as wireless data and new spectrum.

If broadband investments were freed of the rules that now make them less attractive than the other growth opportunities in the business, Verizon could increase its investment in broadband - with all the economic and consumer benefits that would ensue. Seidenberg called on the FCC to adopt the following national standards:

  • Eliminate unbundling for high-speed, high-capacity data connections
  • Remove switching from the list of required unbundled elements
  • Eliminate the requirement to provide business UNE-P (unbundled network elements platform)
  • Transition away from UNE-P in the residential market
  • Refrain from extending the UNE regime to already competitive special access services
  • Prevent old telephony rules from being applied to broadband

"Policies such as the current unbundling rules - a system which simply transfers wealth from those who invest in infrastructure to those who ride on it -- are a big wet blanket stifling progress and innovation," said Seidenberg, referring to regulations that let competitors use Verizon's network at prices well below the cost of building and maintaining that network.

"The FCC has a terrific opportunity to show the positive impact that market-driven policies can have on investment, which can reverse the downward trend, get capital flowing again and lead a revival of the global communications industry," he said.

Verizon Communications

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 135.8 million access line equivalents and 32.5 million Verizon Wireless customers. Verizon is also the largest directory publisher in the world. With more than $67 billion in annual revenues and 229,500 employees, Verizon's global presence extends to 33 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.