Ivan G. Seidenberg
chairman & ceo, verizon wireless, inc.
Outdated local regulations thwart innovation
Verizon CEO says Verizon Communications Inc.'s chief executive said consumers who want to tap some of the company's latest telecommunications technologies may not be able to get them because of outdated local regulations.
Ivan G. Seidenberg, speaking at a Boston College Chief Executives Club luncheon, said that since 2000 his company has invested $75 billion in new technologies, and the latest innovations coming from that are the broadband EV-DO (evolution data-optimized) wireless broadband network and the FiOS (fiber-optic services) Internet service that is used to carry phone calls, data, and video.
But while there is definite demand for the services, Verizon can't offer FiOS in some areas nationally because of old local cable-TV franchising laws, he said.
Under current laws in many states, Verizon has to apply for a cable-TV franchise to offer FiOS network's video capabilities to each community where it seeks to provide that service. "We already have the network to provide voice and data," said Seidenberg. "Now we have to go through an additional process in each Massachusetts town just to provide video over the same pipe. It makes no sense."
Nevertheless, Verizon is seeking franchises in hundreds of communities nationwide, he said, including about 30 in Massachusetts.
The FiOS service is available in parts of 15 states, including New York, California, Texas, Virginia, New Jersey, and Massachusetts, and the company's plans call for htat service to be deployed to about 3 million homes by the end of this year, said Seidenberg.
He said that perhaps Massachusetts should follow the example of Texas, which has "a modern, streamlined franchise law, which clears the path to technology investment and video competition" on a statewide basis.
EV-DO, which is a high-speed wireless technology that lets users download complex files and even view video on wireless devices, should be available to about half the US population by the end of the year, he said.
Seidenberg also complained that telecommunications services are taxed at a higher rate than any other type of business, which only serves to potentially stanch a state's economic competitiveness.
The combined state and local tax rate for wireline telecom services averages almost 14 percent nationally, and wireless services are taxed at 11 percent. By comparison, the average rate for other goods and services is 6 percent.
Article by Dow Jones
Wednesday, September 21, 2005
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