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Verizon Attacks Video's 'Biggest Barrier'

LAS VEGAS -- NAB2005 -- After missing its goal of passing 1 million homes with its new fiber to the premises (FTTP) network by the end of 2004, Verizon Communications Inc. (NYSE: VZ) is now pressing authorities to rewrite laws so it can deploy its services more quickly (see Tracking Verizon's FTTP Progress).

At his keynote address this morning, Verizon CEO Ivan Seidenberg appealed to broadcast industry folks gathered here for help in backing off state and local governments on franchising rules for video providers.

Under current laws, companies providing video must buy franchising rights in any municipality in which it plans to offer the service. Verizon has so far played by those rules where it has rolled out video service by sending staff to attend city council meetings and to placate the locals (see Verizon Sets TV Precedent and Picnic Marketing).

"Most urgently, we need to find a way to break down the biggest barrier to our entry into video, and that's the franchising process," Seidenberg told this audience of about 1,500 broadcast industry folk.

"We are currently applying for franchises in towns, cities, and counties across the country, and we are also pursuing statewide solutions in some jurisdictions. This is, at best, a slow process that presents an unnecessary impediment to consumer choice in video."

"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 competing competitive alternate to cable," Seidenberg said.

Seidenberg says a federal-level solution to its franchising headaches might clear the way for returning to pace on the initiative.

Of course, not all the big telephone companies are sweating the broadcast franchising laws. SBC Communications Inc. (NYSE: SBC), in fact, has already said that because it uses a pure IP platform to deliver its upcoming service, it won't have to go through the same headaches as Verizon (see SBC Sees IPTV Interference and Inside SBC's IPTV Factory).

Not all of Seidenberg's remarks focused on Verizon's legal wish list. The CEO also took care to address perhaps the chief anxiety of content companies entering the digital and IP age: digital rights management.

"The creators and carriers of content share a common interest in this issue. After all, if we don't protect the value of content, we won't have any content to provide."

The novelty of a big phone company CEO talking to a group of mostly TV and radio people was not lost on Seidenberg. "For those of you who are surprised that a telephone guy is keynoting a broadcasters' convention, let me just say, so am I...

"All we know for sure is that a new generation of technologies and a new generation of consumers have thrown all of our tidy definitions and old ideas into a giant multimedia mixmaster to turn America into a broadband nation."

In this new environment, Seidenberg sees the telecom triple-play providers and the content providers -- the broadcasters -- as natural partners. "We both know how quickly speed, mobility, and interactivity have become part of the DNA of our customers."

Why else are they natural partners? Oh, that's right: Verizon spends lots and lots of money -- something content providers appreciate and look forward to making as they find new networks to distribute their products.

"Since the year 2000, we have invested more than $73 billion in capital -- more than any other telecom or cable company in America," Seidenberg said. "Just to put that in perspective, that's $22 billion more than the top five cable companies have invested over the same period combined."

Seidenberg's comments tally with those of NAB CEO Eddie Fritts, who also spoke this morning. "The NAB has protected you from a great many things in Washington over the years and made a great many things possible, but we cannot protect you from the transition to a digital world," Fritts said. "It is up to you to become a vital part of the digital world, and to prosper in it."

— Mark Sullivan, Reporter, Light Reading

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