Verizon Won’t Cut Broadband Prices to Match SBC, Seidenberg Says
Verizon has no intention of cutting its prices on broadband to match an SBC promotional price of $14.95 a month for new DSL customers, CEO Ivan Seidenberg said Tues. He declined to provide numbers on VCast, the Verizon Wireless platform that lets customers watch TV- style offerings on special video over EVDO phones.
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“When we provide DSL, we're already lower than the cable companies in terms of pricing,” Seidenberg said. “We feel no outstanding need to do anything on pricing at this point because we already have a lower price. I would also point out that even the SBC price has some parameters around it… I'm not really sure exactly how that will play out for SBC, but in our case we're very comfortable where we are right now.”
Seidenberg addressed Supercomm in keynote remarks, then spent 45 min. fielding media queries. One number analysts have been watching for is early VCast figures. Last week, at a financial conference, Seidenberg provided insight into the FiOS fiber network rollout.
“I'm not sure it makes a lot of sense to give competitive information,” Seidenberg said of the VCast numbers. “We've been pleased with the penetration. I'd like to think that nothing is going wrong. It’s just a matter of rolling it out as fast as you can… It’s getting the people in our stores trained, getting the inventory correct. So we're doing all that. We're seeing good momentum now. My belief is that as you hit the selling season, Sept. to Dec., you'll start to see increased advertising, increased promotions and lots of excitement around it.”
Seidenberg took on cable companies in his remarks, echoing other Bell officials’ Mon. comments. Seidenberg said he expects cable to try to disrupt Verizon’s attempts to offer video on its pipes.
“It’s common sense that the cable companies see us as an insurgent in their market,” he said. “Whether they think it’s right or wrong for us to enter, it’s in their interest to slow us down. In my view I think everything they've done to throw all these conditions and raise all these issues and sort of distract the regulators and the policy-makers and the municipalities is not unexpected. It’s not unexpected at all.”
Verizon wants to follow cable’s example in rolling out data service to customers, Seidenberg said. “We have decided that we're going to focus all of our energies on the market,” he said. “Let me give cable some credit… They thought that rolling out cable modems was a good idea and they did it quickly and they did it well. They didn’t worry a lot about what we thought.” He added: “They had a winning formula with the customers and they went after it. We did the same with wireless… We have to say we're going to go after the customer.”
Seidenberg dismissed cable operator claims that Verizon should come under regulatory oversight in its video rollout to protect disadvantaged communities. “As to the redlining issue, it’s just a bogus question,” he said. “We didn’t do that with wireless rollout. We don’t do it with DSL. We don’t do it with anything we do.” Seidenberg added: “If you look at cable, when they come in to telephony, they don’t serve all the customers in the market… They [cable operators] have used the redlining issue as a political tool.”
Verizon isn’t ready to provide more information on the pricing of its TV over fiber offering, Seidenberg said. Pricing will be competitive with cable’s, he said. “We will give everything that cable gives today but we will enhance it with all the capabilities of interactivity and capacity,” he said. “What’s our advantage? We can offer 20 HDTV channels. When cable says it can do that we have doubts that they can do that every place.”
In formal remarks Tues., Seidenberg highlighted 9% growth in telecom equipment sales tied to investment in new networks. “Investment in new technology platforms not only expands the pie for Verizon, it helps grow the market for everyone,” he said. He urged the telecom industry to work with content owners to resolve difficult issues that could impede the new networks’ growth. “We need to find the best way to protect the value of intellectual content in a digital universe,” he said. “We need to update the telecom laws for the 21st century, particularly those related to broadband services. And we need to simplify and reform the franchising process that is acting as a barrier to video competition.”