NEW YORK — Saying that the current form of regulation has run its course, Verizon President and co-CEO Ivan Seidenberg today called for a new approach to regulating the communications technologies that are at the heart of America's economic prosperity.
Seidenberg said public policy should encourage the investment that will fuel economic development and job creation.
"The way to get there is more competition and less regulation," said Seidenberg. "Without change, America is jeopardy of being a runner-up in the most vibrant sector of the global economy - an unacceptable outcome for us all."
Seidenberg made the remarks today at the National Press Club's weekly luncheon meeting in Washington, D.C. A full text of Seidenberg's speech is available at www.verizon.com. A webcast of his presentation may be accessed by clicking on this link.
According to Seidenberg, the U.S. can only stay competitive with the rest of the world if all aspects of communications -- mobile wireless, fixed wireless, cable, satellite and telephone services - are able to compete with each other on a level playing field.
In contrast, Seidenberg said today's regulatory view of technology is based on artificial boundaries, such as "local calling areas," and governed by 50 different state regulatory bodies, countless municipalities and an alphabet soup of federal agencies. Regulators treat the industry as a collection of separate services with the vast bulk of regulation focused on one ever-shrinking segment of the business: traditional local voice communications.
"This dated approach all adds up to dramatic consequences for consumers in the form of less choice, less competition, fewer services and misallocated investment," said Seidenberg.
A classic example of this two-tiered approach is the regulation of cable versus telephone. Both platforms are evolving to provide voice, data, Internet access and video. The results, said Seidenberg, should be flat-out competition between two robust platforms, racing to deliver new-age services to America.
Instead, he said, there are two sets of rules. The telecommunications industry is heavily regulated and required to fully open its networks, while the cable business is permitted to leverage its monopoly in the broadband arena, which means it can lock up programming, Internet access and huge libraries of worth of intellectual property on closed, proprietary systems.
"We must have faith in the discipline of competition and market forces to unleash innovation and create growth," said Seidenberg, who outlined a bold new regulatory approach to achieve that goal:
- Create a clear path for eliminating economic regulation at both the state and federal level on the entire communications industry, modeling it after the success in the wireless industry.
- Focus public policies and regulation on those areas that are really meaningful to consumers: Ensuring the availability of basic service, upholding service quality, and protecting consumer interests in the Internet Age through open access policies, privacy protections and meaningful enforcement.
- Deregulate broadband investments and services immediately to promote sensible investment and ensure maximum competition among all technologies.
- Deregulate the business market immediately, where - by any reasonable measure - competition is alive and well.
Seidenberg noted that a growing number of federal and state lawmakers are beginning to understand that the Internet is too important to America's economic vitality to be restricted by regulations left over from another era. Congress is considering a number of bills that would remove some of the restrictions on data investments and the Federal Communications Commission has proposed a restructuring plan that recognizes the realities of the Internet marketplace.
"The challenge is to do all this in Internet time," said Seidenberg. "It's time to stop fighting yesterday's battles and get on with tomorrow's war.
"Connecting our customers to this hugely creative global market is the reason Verizon was created - and it's what we want to deliver to America."
Verizon Communications Inc. (NYSE:VZ), formed by the merger of Bell Atlantic and GTE, 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 100 million access lines and more than 25 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.