Verizon’s Seidenberg Says It’s Bad Business to Block Content

Feb 9, 2006  •  Post A Comment

Verizon Communications Chairman and CEO Ivan Seidenberg took aim Thursday at those suggesting that broadband market needs so-called “network neutrality,” promising that his company would never block consumers from accessing content.

“We don’t block anything,” Mr. Seidenberg said at a McGraw-Hill Cos.-sponsored media conference in New York. “Never have, never will.”

The issue took center stage this week following comments from Sen. Ted Stevens, R-Alaska, who recently said he thought there was a need for network neutrality to prevent cable and telephone companies from potentially discriminating against competitors, including those offering services that compete with products offered by the phone and cable companies.

Mr. Seidenberg suggested it would be bad business for Verizon or any other broadband provider to exercise control over the content that consumers want to reach over high-speed Internet networks, pointing out that any company that engages in such a practice runs the risk of losing customers.

Rather than an issue of access for consumers, the Verizon chief said, the real issue is who will pay for the network backbone required as more consumers adopt broadband and as more content owners look to offer content on broadband networks.

Mr. Seidenberg pointed out that large Internet companies such as Google have set up network facilities throughout the country to ensure that consumers anywhere are able to immediately access Google’s services without delay.

Those that don’t have as many access points, or those unwilling to make the investment in them, are using the network neutrality issue as a way to shift the costs for building those access points to companies like Verizon, Mr. Seidenberg said.

“This is a ruse for shifting costs,” Mr. Seidenberg said.

Also Thursday, Mr. Seidenberg defended his company’s decision to spend around $15 billion a year to upgrade its network with fiber-optic lines to ensure Verizon has a role in delivering new services as bandwidth needs increase. He also said the company’s decision to make the investment was about more than offering television services.

“We are locked out of a vibrant future if we don’t make this investment,” Mr. Seidenberg said.

Mr. Seidenberg also downplayed the significance of the ongoing battle over whether companies like Verizon and AT&T should have to seek franchise licenses in every municipality where they want to offer video services.

Mr. Seidenberg said the company would continue to seek and obtain franchise agreements but warned local governments and rival cable companies not to use the franchise issue as a tactic to stall Verizon’s push into a market.

“No one should ever doubt our resolve,” he said, adding he thinks the issue will be ancient history in the next two years.