Verizon Encourages Competition, Not Structural Separation in Michigan

LANSING, Mich. - A bill introduced yesterday in the Michigan legislature would cause confusion, service troubles and likely higher rates for consumers, Verizon Communications warns.

House Bill 4044, introduced this week in the Michigan legislature, would force "structural separation" of Verizon in Michigan, dividing each company into two separate entities - one to sell wholesale services and one to sell retail services.

"Michigan residents must not become the guinea pigs for an ill-conceived idea that the Federal Communications Commission, other states and many think tanks have already rejected," said Paul Fuglie, assistant vice president of public policy for Verizon in Michigan.

HB 4044 is the latest of numerous structural separation attempts around the country. So far, no state has ruled that Verizon, SBC, Bell South or Qwest - the four major local telecommunications companies in the U.S. - or any other local phone company should be required to split their retail and wholesale operations in two.

"Structurally separating Verizon would lead to a domino effect of confusion, rate increases and job losses and has no more relevance here than it did in Maryland, Pennsylvania, Illinois, Florida or Virginia," Fuglie said. "Those states rejected this concept. In addition, the Federal Communications Commission has considered and turned aside the idea of structural separation four times since 1984."

More than100 companies are authorized by the Michigan Public Service Commission to compete for local telephone service in Verizon markets.

"We've taken the steps in our markets to foster competition," Fuglie said. "Our doors already are open. Splitting Verizon in two would do nothing to accelerate competition. It simply would add another layer of needless regulation and costs."

Many experts, including the Progress and Freedom Foundation, Cato Institute, Competitive Enterprise Institute, Commonwealth Foundation, Independent Institute, Dataquest Inc., CSE Foundation, Eastern Management Group and Mercatus Center at George Mason University, all oppose structural separation.

"The fact that some firms are performing poorly in the marketplace-despite numerous regulatory advantages-is hardly cause for returning to the failed model of a regulated monopoly," said Fuglie.

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.

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