Verizon's Tauke Calls on Unified Industry to Address Emerging Consumer Issues

ASPEN, Colo. - Noting that the Net Neutrality issue "is gradually being resolved," Verizon's chief policy executive, Tom Tauke, today called on industry players to come together in addressing emerging broadband concerns that customers really care about.

Speaking at an industry conference here, Tauke, Verizon executive vice president of public affairs, policy and communications, said: "Broadband is a technology that connects people, but the debates we've had over the past year have seen the broadband industry become more fragmented. We should be committed to working together to put policies in place that meet the needs of customers, the marketplace and the networks we are all invested in for the future."

Tauke identified four important issues: access; personal security and privacy; protecting intellectual property; and unfair, regressive taxation of telecommunications services.

Tauke said that the industry should do all it can to provide access to as many as possible as quickly as possible. "As an industry, we should recognize that the economic and technology challenges in some areas may require new models for deployment," he said. "We should encourage local experimentation and partnerships, including public-private partnerships." If the industry fails to act, Tauke noted, the political pressure to address the issue will cause government to act prematurely.

"If government addresses the broadband access issue, it should do so only after it is clear that the market is not meeting - and is unlikely to meet - the legitimate societal interests in bringing access to consumers," Tauke said.

Referring to the privacy issue, Tauke said, "The large amounts of personally identifiable information on the hundreds of millions of people online...and these billions of pieces of data in the right hands can be used for the legitimate delivery of personalized services. In the wrong hands they are tools for invasive, or even predatory, criminal behavior. The last thing any of us wants to see is Internet usage decrease because of fears and growing threats."

Tauke said the situation requires strong enforcement of privacy laws, ongoing consumer education, and more aggressive industry efforts to use technology to protect the more vulnerable who go online.

Regarding the protection of intellectual property, Tauke said: "There is no clearer example of just how disruptive a technology broadband is than in the creation and distribution of content online.

"The industry has to come to terms with the diverse expectations that broadband is creating among both content creators and consumers...a challenge that takes on greater weight when you factor in the global dimension." Content distribution and copyright protection issues aren't limited to the United States, but have international implications, Tauke said, and as "screens and browsers proliferate around the world and become more mobile, the challenges that all segments of the broadband industry must address only become more complex."

Turning to the taxation issue, Tauke noted that the state and local tax burden on communications is two and a half times what it is for other businesses. "That's not only a discriminatory tax burden on our industry, it's a regressive tax increase on every user of our services," Tauke said. "Today in some states, taxes on cell phones exceed that of liquor and tobacco. That's just not right."

Tauke characterized the tax process itself as being overly complex and burdensome on the industry. "Compared to other businesses, communications providers have an additional six thousand taxing jurisdictions to contend with, and about 40,000 more returns to file each year," Tauke said. "In a world where voice, video and data communications are merging into almost indistinguishable packets of electrons, tax policy remains in the rotary phone era."

Tauke also cited an industry study that shows overly burdensome taxation has a negative effect on demand and drags down the Internet economy's growth. "When states imposed a 16 percent tax on wireless services, demand went down by 18 to more than 20 percent," Tauke noted.

Tauke urged united industry action to address these issues, "which are critical to the shaping of the broadband world."

"If we don't meet the challenges, we risk having the promise of the technology stifled by continued regulations that impede the creativity and innovation of the marketplace," he said.

Verizon Communications Inc. (NYSE:VZ), a Dow 30 company, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers. Verizon Wireless operates America's most reliable wireless network, serving nearly 55 million customers nationwide. Verizon Business operates one of the most expansive wholly-owned global IP networks. Verizon Telecom is deploying the nation's most advanced fiber-optic network to deliver the benefits of converged communications, information and entertainment services to customers. Based in New York, Verizon has a diverse workforce of more than 252,000 and generates annual consolidated operating revenues of approximately $90 billion. For more information, visit www.verizon.com.