LAS VEGAS – When huge American telco Verizon enters the TV market later this year, the company “will change the competitive landscape in the video marketplace, both now and in the future. From Day One, we’ll offer a new technology, a new business model and a new customer experience,” said chairman and CEO Ivan Seidenberg.
Speaking at the National Association of Broadcasters annual convention last month in Las Vegas, Verizon’s FiOS TV will offer “a new customer experience,” he added. Verizon (which has over 43 million voice and data customers and $71 billion in annual revenues) is a 26.7% owner of Telus, Canada’s second largest telco, which also plans a TV launch for later in the year.
Seidenberg called on broadcasters to help break down “the biggest barrier” to Verizon’s entry into video: the requirement that Verizon obtain a second franchise from local authorities, in addition to the one the company already has, to carry video on its fiber networks.
In the U.S. municipalities hand out cable licenses.
He said the broadcast and communications industries are “natural partners” in exploring new digital technologies that will enhance their relationships with their local customers.
“As technology barriers fall, and we begin to marry the power of broadcasting with the mobility of wireless and the interactivity of the Internet, we’ll offer a compelling customer experience that will give you many new ways to reinforce just how important you are in the lives of your audience,” he said.
As an example, Verizon Wireless’ wireless broadband uses a technology called EV-DO, and the company is expanding its EV-DO network to reach some 150 million people by the end of 2005.
Using EV-DO, Verizon Wireless’ new V CAST service delivers mobile segments of network TV shows, movie previews, 3-D games, music videos and sports highlights on wireless handsets.
“We’re convinced that once customers get a taste of this whole new wireless experience, they will see it as every bit as indispensable as their mobile phone service is today,” Seidenberg said.
Verizon also is the first big American RBOC to make a major commitment to deliver fiber-optic technology to homes and businesses. The company has deployed its fiber-to-the-premises network in more than 100 communities across its service territory, and it plans to reach a total of three million homes by the end of this year. Seidenberg said Verizon will expand its fiber broadband network in the years ahead as fast as the technology and marketplace will allow.
FiOS Internet Service delivers speeds up to 30 Mbps (megabits per second) downstream and 5 Mbps upstream and for video, the network will deliver 100 Mbps downstream and up to 15 Mbps upstream.
Seidenberg told the broadcasters that Verizon looks forward to joining with them in the digital TV world and also said that Verizon is committed to partnering with broadcasters on the policy issues related to the company’s entry into video.
Citing the requirement that Verizon obtain a franchise from local authorities to provide cable service, Seidenberg noted that, as a local telephone company, Verizon has always had a franchise to deploy and operate its networks. Now, he said, the company is being asked to obtain a second franchise to use these networks to compete in video.
While continuing to negotiate local franchises, he said, Verizon is seeking statewide solutions in some jurisdictions as well as a federal solution to this issue.
“We ask you to lend your persuasive voice in support of clearing away this barrier to video competition and speeding the day when America’s communications companies can use our fantastic resources to offer your content and provide a true and compelling alternative to cable,” he told the broadcasters.
At the same time, he pledged that Verizon would work with broadcasters to protect intellectual property in a digital universe. In addition, he said, with the tremendous bandwidth of its fiber network and business interest in providing as much content as possible, Verizon will help broadcasters address retransmission issues in ways that expand the market for both the company and the broadcasters.
