Bone talks deregulation

A bill pending before the Senate that would largely deregulate the land line phone and cable industry is all about job creation and economic growth, said Verizon New Jersey President Dennis Bone in an interview Tuesday.

Verizon stands to gain heavily from passage of the bill, which would take the company’s 2.6 million land lines out from under regulatory control.  Bone said the bill is all about creating incentives for Verizon and others to invest in New Jersey and not about selling off assets or raising rates as some opponents have postulated.

“If you are Verizon and you are allocating capital across your markets for investment and you look and say wow they have a really light touch in Florida or Texas or California (you’re going to say) let’s go there,” he said.  “New Jersey has a very high dose of regulation on the business and it creates a negative environment.”

In an interview on the bill, Bone dispelled what he called fictional accounts of the company’s plan to sell off its land line assets in the state, saying it made no sense given the level of investment in the past few years in the fiber optic network.

“We’ve invested about $3 billion in the state,” Bone said. “What we are talking about here is a bill that would give incentive here to continue that investment. We’ve been very clear and we have said in the states where we are heavily invested in FIOS those are not the states where we want to sell.” 

The Verizon president said the company is the only carrier in the state subject to what he called arcane laws put on the books in 1911 when Bell Telephone had a monopoly on phone service.  The state is rife with competition, he said, and the company is handcuffed by the existing laws.

Asked how much Verizon stood to profit off deregulation, Bone was non-committal, saying only that he had not yet competed in a deregulated market.

Verizon spent more than $2 million to lobby lawmakers over the past two years and opponents point to the huge cash outlay as a sign of the value of deregulation.  While Bone did not deny the company stood to reap benefits, he said the bill was more about directing capital investment to the state.

“I can tell you unequivocally if we get this very good regulation passed, I’m going to have a better case to make for more capital in New Jersey,” he said.

Bone also rose to a challenge issued Monday by Richard Brodksy, the author of a report that panned the deregulation bill as devastating to the state’s land line phone users.  Brodsky challenged Bone to find any inaccuracies in the report after Bone was quoted saying the report contained “lies.”

Bone cited a portion of the report that questions whether cell phones and Internet phone connections represent sufficient competition to Verizon’s 2.6 million land lines. 

“Ultimately, the impulse behind S2664 is based on the false premise that there is sufficient competition in local phone service to create a competitive model that can substitute for existing regulatory protection of consumer rights. The reality is that there is little real competition for landline phone service and neither wireless phones nor VoIP services are a real competitive alternative for most families that currently depend on landline phone services,” writes author Richard Brodsky in the report. Brodsky is a fellow at Demos, a left leaning think tank.

But Brodsky’s assessment relied on 2007 data from the annual National Health Interview Survey, an assessment conducted by the national Centers for Disease Control and Prevention.  That data showed that in 2007, 8 percent of New Jersey adults used only a cell phone and did not have landlines to their homes. 

The 2007 survey also shows that less than 15 percent of people nationwide used only a cell phone.  But those numbers jumped by more than two thirds in the 2010 survey when nationally, 26.6 percent of all households used a cell phone only. A state by state breakdown is not available for any year after 2007.

Bone also cited an FCC competitiveness study that showed New Jersey is the most competitive state in the nation with at least 10 or more phone providers in more than 9 out of 10 ZIP codes across the state.

“He said point out a lie,” Bone said, referring to a challenge from Brodsky after Bone was quoted saying the report contained lies. “There it is.”

Brodsky took great exception to Bone’s characterization of the report as containing “lies” saying that the Verizon executive does his ratepayers and shareholders a disservice by demonizing those who don’t agree with him.

“There is a fundamental gap in the way in which we look at this and the way he looks at it because he insists on the fact that wireless is an easy and available alternative for all New Jerseyans. It isn’t,” Brodsky said.  “For example, many, many senior citizens simply will not avail themselves of wireless service.”

His report, Brodsky said, focuses on what he says will be rate hikes for all land line customers as a result of the bill.

“What we focused on is the practical impact on the bills of the average New Jersey family,” Brodsky said. “What he focuses on is the theoretical ability of the market to theoretically deal with this problem. We are very comfortable that we were accurate and fair in what will happen to the New Jersey family. He offers an ideological defense to a practical problem.”

 

Bone talks deregulation