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Ivan G. Seidenberg

chairman & ceo, verizon wireless, inc.

Ivan Seidenberg addresses the Boston College Chief Executives' Club of Boston.

Outdated local regulations thwart innovation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who want to tap some of the company's latest telecommunications technologies may not be able to get them because of outdated local regulations.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.

James Taiclet (Chairman & CEO, American Tower Corporation) greets Anne Finucane (President, Bank of America, Northeast) while John DesPrez (President & CEO, John Hancock Financial Services) looks on.

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.

Robert Kraft (Owner, NE Patriots), Patrick Purcell (President, Herald Media, Inc.), Thomas May (Chairman, President, & CEO, NSTAR), Marijn Dekkers (President & CEO, Thermo Electron Corp.), Thomas Reilly (Attorney General, Commonwealth of MA), John Hamill (Chairman, Soveriegn Bank, NE), Charles Baker (President & CEO, Harvard Pilgram Health Care), Ed Eskandarian (Chairman & CEO, Arnold Worldwide), James Taiclet (Chairman & CEO, American Tower Corporation), John DesPrez (President & CEO, John Hancock Financial Services), and Anne Finucane (President, Bank of America, Northeast) listen to Mr. Seidenberg's address.

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
Boston Globe
Wednesday, September 21, 2005


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