SEIDENBERG CALLS FOR DEREGULATION OF BROADBAND TECHNOLOGIES
Increased focus on broadband “in the last 3 to 4 months has made the issue bigger than Tauzin-Dingell,” Verizon Pres. Ivan Seidenberg said Tues. He made his comments to reporters following his keynote that opened the Comnet show in Washington. Position that govt. should make broadband deployment top priority, stated earlier this month by Silicon Valley advocacy group TechNet (CD Jan 16 p2), “is gaining momentum,” Seidenberg said. Referring to Bell-friendly broadband deregulation bill sponsored by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.), he said he believed House planned floor vote in late Feb., and bill “still had the vast membership of the House that likes what it does.” Seidenberg predicted Senate would consider Tauzin-Dingell “as well as other approaches,” and that bill “would be a catalyst for broadening the debate.” While Verizon supports “most of” Tauzin-Dingell bill, it would accept any deregulatory relief, he said.
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In keynote, Seidenberg called on FCC and Congress to remove “do not enter” signs to broadband deployment: “When it comes to public policy the status quo is not working.” Unbundling requirements to make facilities available “at below-cost rates” would make broadband investments uneconomical, he said: “We are the only wholesale business in the world that doesn’t make money.” Argument is made that unbundling is necessary “for small entrants to gain a foothold, which is a valid argument,” he said: “But the most vocal complainers are all large carriers.” Verizon isn’t asking for change in existing voice rules, Seidenberg said, but with new technology “regulators should focus on a model that looks like the wireless or cable industry.” Both have flourished because of relative lack of regulation, he said, especially in case of cable. “As new stuff is introduced, it makes it more like wireless or cable than the old phone business,” he said.
Seidenberg rejected argument that U.S. didn’t need broadband and that 56 kbps used by most consumers for Internet access was adequate. “Ask the 12 million already using high-speed broadband whether they would go back,” he said. Broadband users spent more time online and were more likely to purchase items on Web, he said. “The experience is fundamentally different, even with the services available today,” he said. In terms of supply and demand, he said, “40% of consumers have no choice of a broadband provider. With small business, the situation is worse.” Although small companies represent 1/3 of U.S. economic output, only 6% have broadband access, he said: “To say there is no supply problem is disingenuous at best. As kilobytes turn into megabits, a range of services customers don’t even know exist will emerge. Broadband has the potential to have the same impact on the IT industry in the next 20 years that open architectures and faster computer chips has in the last 20 years,” he said.
Telecom recession was plainly evident by empty chairs in auditorium and later on exhibit floor sparsely populated by vendors and visitors. In question later, Seidenberg said reduction in capital expenditures by Verizon hadn’t hampered its broadband rollout. Capital spending in 2001 was $17 billion and still will be “significant number” in 2002, he said: “Despite a sharp cutback in 2001 and some in 2002, all the cuts have been driven by [lack of] customer demand” for current services, he said: “There hasn’t been a cutback in growth issues.” Growth items that carrier continues to fund aggressively, he said, include: (1) Data infrastructure such as DSL equipment. (2) Wireless infrastructure. (3) Drive to complete long distance business and obtain FCC Sec. 271 approvals for each state in region. (4) Electronic services for Yellow Pages. “Though it has received little notice, our Super Pages service has been a very successful data application,” he said.