Verizon: Government Must Not Micro-Manage Communications Industry

NORRISTOWN, Pa. - Keeping ahead of the curve of technological change and increasing customer demand is the driving force in communications - and it's revolutionizing the telecom industry. And government must help, not hinder, this revolution, Verizon Pennsylvania's top executive told Montgomery County business leaders today.

"Verizon is a vital part of the 21st-century information industry," said Daniel J. Whelan, president and CEO of Verizon Pennsylvania. Addressing members of 12 Montgomery County chambers of commerce, Whelan said Verizon is racing to put together a national and global platform over which integrated voice, data and video services can be provided to data-hungry customers.

Verizon, the national communications company formed by the merger of Bell Atlantic and GTE, has invested heavily in new digital and fiber-optic technologies to meet the growing communications needs of customers, particularly for data services. In Pennsylvania, Verizon has spent $1 billion each of the last three years, and the company plans to invest a billion more this year and next.

"The Internet has become the dominant communications phenomenon, with capacity doubling every 100 days," said Whelan. "Electronic commerce has come into its own, with transactions expected to reach $1 trillion by 2003, and wireless is expected to grow to one billion users by 2004, if not before."

However, there are problems in this increasingly data-centric world, "problems brought on by the heavy hand and cost of regulation," he said. "We need to develop a regulatory framework for the Internet Age - a modern framework that accommodates globalization and the fundamental, but rapid changes that are shaping our industry.

The current regulation model now is harmful to consumer welfare, investment and market-based competition, Whelan said, pointing to recent regulatory actions in Pennsylvania to illustrate his point.

"Pennsylvania is being threatened with a regulatory framework developed in a bygone era," he said. "Commonwealth Court last week affirmed the state Public Utility Commission's authority to break up Verizon's Pennsylvania operations into separate wholesale and retail subsidiaries.

Whelan said this ill-advised plan would:

• Cost at least $1 billion to implement.

• Divert money earmarked by Verizon for service improvements, network enhancements and price reductions.

• Halt the rapid development of telecommunications competition.

• Delay savings on local and long-distance rates for Pennsylvanians.

• Assure that telecommunications costs are higher here than in any other state in the nation.

The wireless industry, the computer industry and the Internet all developed with little or no government involvement. "It's time to get the government out of the business of micro-managing the communications industry," said Whelan.

"It's time for a new approach to regulating the technologies that are at the heart of economic prosperity in all Pennsylvania communities - one that allows the market to develop around what consumers really want."

Verizon Communications Inc. (NYSE: VZ), formed by the merger of Bell Atlantic and GTE, 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 more than 101 million access line equivalents and more than 26 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 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.