WASHINGTON -- Saying this is a moment of truth for the telecommunications industry and the country, Verizon co-CEO Ivan Seidenberg today urged Congress to quickly approve a recovery package and a broadband bill as well as a tax incentive plan for lower Manhattan to spark new investment by corporate America.
"The challenge for America is to stimulate the most new capital investment in the shortest amount of time," Seidenberg said during a luncheon speech at the National Press Club. "But unless we can operate under rules that make economic sense and give us rational incentives to invest, we will not be able to put Verizon's enormously valuable assets to work for our customers. And that would be too bad for us -- but, more important, for the country."
Seidenberg said during the Sept. 11 disaster people relied on diverse technologies to communicate -- wireline and wireless phones and e-mail, text messaging and Instant Messaging - demonstrating the kind of advanced communications network on which this country's security depends. The tragedy put a spotlight on the crucial role a strong communications infrastructure can and must play in our economy and focused the nation's attention on the need to get the economy moving again through policies that stimulate investment.
Noting that the recession has been led by a huge slowdown in spending by businesses, Seidenberg called on Congress to enact a recovery package that includes changes in the tax law to encourage new investment. Seidenberg said Verizon supports the proposal -- included in the economic stimulus package passed by the House as well as the one proposed by Senate Republicans -- that would give a 30 percent "bonus depreciation" for companies making new equipment purchases over the next three years. This provision has garnered widespread support from the high-tech industry because it focuses on new investment and on the kind of productive assets that create jobs and economic growth.
Seidenberg said he's hopeful the House of Representatives will bring the Tauzin-Dingell broadband bill to a vote in the next two weeks and send a signal that it's time to move forward with the broadband revolution. The measure would push more diverse technologies into the marketplace to fuel the economy, stimulate innovation and give America the secure, redundant infrastructure it needs.
"Telecom spending on broadband will have huge multiplier effects on the computer industry, software, media and equipment. We need to get this capability in consumers' hands. It's pretty clear how to do that -- promote new investment by taking down the 'do not enter' signs that impede the flow of capital."
The policy rests on sound economic principles that will benefit the entire industry, unlike the current regulatory model based on resale and unbundling which encourages competitors to rely on the incumbent's facilities rather than invest in their own rival network platforms.
Seidenberg said he was encouraged that Federal Communications Commission Chairman Michael Powell has outlined an approach to encourage broadband investment that lines up very closely with the simple, market-driven priorities that have proven to be successful in other technology industries.
Seidenberg also urged Congress to quickly approve a plan by Congressman Amo Houghton, R-N.Y., and Ways and Means Chairman Bill Thomas, R-Calif., to create a new "Liberty Zone" that would provide tax breaks for businesses that reinvest in lower Manhattan. The plan would help rebuild New York City and restore the strength and vitality of the world's greatest financial center.
Seidenberg said Verizon has the largest capital budget of any company in America and a huge investment in the new wireless and wireline technologies that can bring a whole new generation of services to customers and create jobs, productivity and growth for America.
"If we make the right decisions about policies that affect technology and capital investment the American economy will be back to doing what it does best -- creating jobs, inventing cool new stuff, and leading the world in productivity and growth.
"The true power of the communications industry to spur economic growth and high-tech innovation can only be realized if we re-focus our energies on getting new capital into the marketplace and new technology into the hands of customers."
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 128.5 million access line equivalents and 28.7 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with 256,000 employees and approximately $65 billion in annual revenues, Verizon's global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.
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text of Ivan's speech.