And that’s not just anecdotal.  According to the National Center for Summer Learning, all young people experience learning loss when they do not engage in educational activities during the summer. Most students lose about two months of grade-level equivalency in mathematical computation skills, and low-income students lose more than two months in reading achievement.

To help address this, Verizon’s Thinkfinity.org has created a special Summer Learning feature that focuses on American history, mathematic skills, science and reading.  The content is top-notch and comes from the likes of the Smithsonian, National Council of Teach of Mathematics, and National Endowment for the Humanities.   

Here’s a quick video with a Thinkfinity staffer about what they do, shot on site of the 2009 National Educational Computing Conference. 

The following post was authored by, and should be attributed to, Kathy Zanowic, Chief Privacy Officer.  Kathy was named Verizon’s Chief Privacy Officer in April of 2006.  She is responsible for articulating and ensuring compliance with the company’s privacy principles and policies as well as responding to privacy laws, regulations, industry practices and consumer trends affecting Verizon, its employees and its customers.  She has been with Verizon for over 20 years. 

Verizon has updated its privacy policy, replacing multiple policies across Verizon services and Web sites with one, easier to read policy.  The simplified policy gives customers a one-stop shop for answers to questions about Verizon's collection, use and protection of customer and Web site visitor information.  

We've tried to make our policy more customer friendly. The use of plain language and more examples make the policy easier to read and understand.   A summary page provides a snapshot view of our practices, and links to particular areas of interest or to our comprehensive policy. 

We've provided instructions to make it easier for customers to give us their preferences with regard to the use of information for marketing purposes. By simplifying and unifying our policies across the services we provide, we hope our customers will see the complete context of their relationship with us and better decide how to manage it.

Verizon's commitment to customer privacy is long standing.  Privacy is an important consideration whether we are planning new products and services, implementing new systems or interacting with our customers.  Consumer trust is essential to our business and we believe that keeping that trust is an important responsibility.

The revised privacy policy Web pages also give customers easy access to tools that we hope will help them protect the privacy of their information and keep their families safe online.  For example, there are tips about creating safe passwords, recognizing and responding to suspected phishing emails, and protecting your computer from viruses; as well as links to third-party resources to help customers protect themselves against Internet threats.  To help parents manage their children’s online experience we offer a Web site, www.Verizon.net/parentalcontrol, which  gives parents the ability to link to free tools for managing our Internet access, FiOS TV and wireless services. 

As we updated our policy, we surveyed consumers, engaged Verizon's Consumer Advisory Board and consulted with trusted and respected privacy groups.  We welcome your comments and suggestions as well.  You can contact us at privacyoffice@verizon.com. 

Our commitment to our customers led to Verizon’s ranking in 2008 as one of the top U.S. companies most trusted to protect customer privacy in a survey conducted by the Ponemon Institute, the leading privacy research center and TRUSTe, the privacy organization providing privacy seals to websites certified in industry best practices.  It’s a commitment that remains a central part of how we serve our customers.

If there was any doubt that the role of broadband in American life is at a tipping point, consider this:  Home buyers are more interested in whether a home has an all-fiber-optic Internet hookup than whether there’s a community pool. Or a daycare center.  Or a nearby convenience store.

In new surveys just reported, even people who have never had a fiber link rank an ultra-fast connection tops out of five key options.

This news tells us two things:

First, Internet hookups really matter inside the American home. It’s no longer about checking e-mail or buying a book or a shirt.  Functionally, the Internet is growing up…and penetrating deeper into our lives.  When something matters more to us, we get serious about quality.  We don’t buy the cheapo child safety seat.

The second lesson is: Verizon has assumed a pivotal role in the transformation of Internet-based services from novelty to life tool.  Choosing five years ago to build fiber optics right to American homes and businesses has proven not only a great business decision, but a visionary solution to bandwidth demand issues now emerging.

Stu Elby, Verizon’s vice president of network architecture, notes in an interview that our fiber strategy has been to offer more capacity than folk need at the moment, knowing that innovators will…and do…put it to use. He said we’ll maintain that strategy because fiber has a theoretically limitless capacity.

That capacity, he said, will come in handy soon, as we become a nation that publishes or pushes outward more and more content.  Verizon’s industry-leading 20 Mbps upstream speed will certainly support that transition.

And that’s why people looking for new homes are also looking for the best broadband they can get and looking for FiOS.  The luckiest buyers will find a FiOS Optical Network Terminal already installed in the home they are looking at.  “People are insisting on FiOS,” says Bill Heilig, Verizon vice president of corporate marketing.

So as you drive the neighborhood and see homes with “for sale” signs, check the side of the house for a Verizon Optical Network Terminal. Chances are, that’s the home that will sell first.

UPDATE 6/30/09) See GigaOm's related coverage here.

You can’t throw a sheep on-line these days without hitting someone who hasn’t read or written about the hand-wringing over tethering, the unreliability of others’ 3G networks, or the desire to get other devices on the Verizon network.

Those frustrations are each mollified with on very cool innovation – Verizon wireless’ MiFi.

The MiFi is the size of a very thin wallet or thick credit card; it’s basically a battery powered intelligent WiFi hot-spot for our wireless broadband with a 30ft range.

Tethering? It’s much more.  You and four friends can Twitter, blog, and download podcasts during a road trip off of one MiFi unit.

Reliability? It’s Verizon, ask around.

Exclusivity? Any device that can use WiFi can get on our network.

This week a colleague and I decided to test a MiFi to see what speeds we’d get, out of range of any land-based WiFi and in an urban environment (Washington,  DC) during peak hours (late afternoon).

Wow.

In our speed tests, the Mifi gave us between 1.3 and 1.6mbs down, and 380 and 645kps upstream on our netbooks and WiFi-enabled MP3 players. No cord, no USB cards, no coffee shop.

But don’t go by my obviously biased point of view, check this: CNET’s Daniel Terdiman used a MiFi to download a 55 megabyte podcast to his smart phone after he boarded a plane but before it took off. Read his post here. Kinda makes the “will they/won’t they” tethering debate moot.

Relatred coverage here and here.

The interview goes on for fifty minutes and I suspect many will find it difficult to find the time to view the entire segment. So, I thought over the next few weeks, I’d take out a few segments to analyze them a bit more.    You can see the interview here.

Let’s start out with an issue most know I deal with all of the time – Net Neutrality.  Ivan is asked directly about our views on the issue in this clip.   He says up front that we agree that the Internet should be open and consumers should be free to access the content of their choice.   He makes it clear that our disagreement is with the notion that we should not be able to offer enhanced services over our network.  Earlier in the interview, Ivan points to the power of advanced networks in places like Iran and  his comments reinforce the notion that we believe as a company in providing open access through high speed networks to the Internet.  We just don’t believe that in such an open and competitive market that our ability to offer differentiated services over our networks should be constrained by regulation or restrictive policies.

Ivan is asked in the context of this discussion about our relationship with some of the leaders pushing net neutrality regulation, specifically Google.   It is no secret that the company has been among those pushing for net neutrality rules or policies.  Ivan makes it clear we disagree with Google on this issue but at the same time he points out that in the technology and Internet space our two companies work in, companies can be and often are both competitors and partners.   He notes too that applications and services providers like Google that build consumer applications have both utilized the broadband networks we build but also promote use of broadband services.  He says that in the end “they’ve helped grow the pie a lot faster than anyone thought possible.”   So while we think they are wrong about net neutrality, they have been a positive force in helping grow broadband usage.

We’re launching HD channels from Viacom – MTV, VH1, CMT (Country Music Television), Nickelodeon, Spike TV, and Comedy Central.  They’ll be available in all FiOS TV markets by the end of next week.  This is most-watched content and it’ll be even more popular in HD.

Depending on the number of local and regional HD channels available in your market, you’ll now have a total of 118 to 130 HD channels from Verizon FiOS. I don’t need to tell you that cable can’t compete with that.

The new HD channels are another way we continue to add value to FiOS in our local markets and across the country.

A year ago, we made ultra-high-speed 50 megabits broadband available to all our customers in all our markets.  It comes with an eye-popping 20 Mbps upload speed.  This week we upgraded our Internet bundle speeds to 25/15 in most places and to 35/20 in the New York area. In today’s world, a broadband connection isn’t fast unless it’s two-way fast, so we’ve amped up both the upload and download connections.

In TV, we’ve leapfrogged the competition with interactive features like multi-room DVR, remote DVR programming, and interactive Widgets.

In addition, FiOS TV customers on Long Island and in New Jersey now have their own FiOS1 channels for local information, entertainment and sports.  FiOS1 Long Island and FiOS1 New Jersey join the FiOS1 channel in the Washington, D.C., area that’s been bringing community news and features to customers in that region since 2007.

We have more new features coming to FiOS TV this year that will advance the two-way capabilities of Verizon’s fiber-to-the-home and in-home networks.  We’ll be telling you more about them as we get closer to launch.

If you’ve been a Verizon FiOS Internet customer for the past several years, you know that we’ve continued to offer you faster speeds.  In 2004 when we launched FiOS Internet, our entry level download speed was 5 Mbps, and the upload speed was 2 Mbps.  Fast forward to June 2008, when we made 50/20 Mbps available to all FiOS customers.

There’s no doubt we’ve transformed the market for high-speed broadband services in the United States, and cable has had to play catch-up.  Yet cable’s response has been to focus on downstream connections when more and more consumers are craving high-speed two-way connections for uploading school projects, sending family photos or working from home.  According to a survey of U.S. residential broadband users (“US Broadband Speeds on the Rise,” In-Stat, Feb. 2009), the average upstream connection speed used by cable broadband customers is 2.68 Mbps, which would seriously limit a home-based worker who needs to send large files to co-workers or clients. 

We think broadband isn’t really fast unless it’s two-way fast, and we’re amping up speeds in both directions for our most popular FiOS Internet services.  We’re also offering incentives for consumers to switch to FiOS.

We’re raising the speed of our entry-level FiOS Internet service from 10/2 Mbps to 15/5 Mbps, and we’re raising the speed of our flagship, mid-tier offering from 20/5 Mbps to 25/15 Mbps.  In downstate New York, FiOS Internet is even faster with a new entry-level speed of 25/15 Mbps and a new mid-tier offering of 35/20 Mbps available in bundles.  Current FiOS customers can subscribe to the new services by calling us at 1-888-GET-FiOS.

We’re also helping customers who use, or want, our DSL-based Verizon High Speed Internet (HSI) service that offers sustained Internet connection speeds of up to 1, 3 and 7.1 Mbps. For customers who order a two-year agreement for non-bundled service, their price will remain the same – between $17.99 and $39.99 per month – as long as they continue on the same HSI service plan and retain local voice service.

To make it even sweeter to switch from cable, we’re offering new customers who purchase qualifying Verizon FiOS or High Speed Internet packages their choice of a free Compaq Mini netbook or a Flip Ultra™ camcorder.

We’ll spell out the promotional details in our news release later today, but new customers need to have service for 60 days and no past due balance to qualify for either the netbook or the camcorder. Customers who choose the netbook will pay taxes, shipping and handling – about $50.

We think new customers will join existing customers like photographer and educator Kathy Halamka in appreciating the value of fast two-way connections.  Take a look at this video  to learn why Kathy thinks upload speeds are so important.

Then let me know how you’re using the upload and download power of Verizon’s broadband services to amp up your work and entertainment.

When you ask people what sort of information they want at their fingertips, news about the local community almost always comes up at the top of the list.  Verizon FiOS TV is giving subscribers more ways to get the local information, entertainment, weather and sports that matters most.

Since we first started offering FiOS TV, customers have been able to quickly check local traffic and weather with Widgets.  We’ve added other Widgets for news, sports and weather.  Click the Widgets button on your remote control and useful real-time information pops up on your TV screen.  In addition, since 2007, FiOS TV customers in the Washington, D.C., area have enjoyed our FiOS1 local channel bringing them local weather, sports, news and community features.

Now, FiOS TV subscribers on Long Island and in northern New Jersey can tune to their own FiOS1 channels for local information about people, news and what’s happening in these regions.  FiOS1 is a different kind of channel – where the community is the star.

Viewers will, of course, find local news, weather, traffic and sports on these channels. In both areas, we’re partnering with Regional News Network (RNN).  We’ll also draw on resources such as Rutgers University and The Star-Ledger in New Jersey and North Shore – LIJ Health System on Long Island for programming tied directly to their communities.

Because so many families have kids who play high school sports, FiOS1 will carry games throughout the school year. On Long Island, we will air full-length high school games from Nassau and Suffolk counties for the entire 36 weeks of the school year.  The games will include both boys and girls sports.  This week, we are airing the Nassau County Division ABC boys lacrosse championships from Hofstra University.

In New Jersey, we have partnered with the Star-Ledger and NJ.com to produce a high school game of the week for the entire 36 weeks of the school year along with the exclusive rights to the New Jersey state high school playoffs and championships. This week, we are airing the Tournament of Champions New Jersey state championships for boys and girls lacrosse from Rutgers University.

FiOS1 will also air local features produced by a team of mobile journalists called “Mo-Jos,” who are already out covering stories. They’re equipped with Verizon’s latest wireless technology so the interviews and stories can be sent from anywhere and get on their air more quickly.  There’s also a user-generated show called “Photo ID,” in which local residents can submit photos about themselves.  It’s all those biography programs you’ve seen gone local.

We’re excited to bring FiOS1 to our customers on Long Island and in northern New Jersey, and we’d like to know how you like it.

A new survey released today by the Pew Center, however, suggests that the industry is doing very well on a number of levels.   Not all is perfect, but on the whole, the glass is very much more full than empty. 

The new report is based on a survey conducted of Americans regarding their access to the Internet and was completed in April of this year.  While there are some issues in the report that give pause – for example the growth in broadband connectivity in African American homes has been minimal over the last year – on the whole, in most segments of society, the broadband industry is performing well in terms of promoting broadband and connecting more Americans.

Overall, the report came to the following conclusion:

Home broadband adoption stood at 63% of adult Americans as of April 2009, up from 55% in May, 2008.  The latest findings of the Pew Research Center’s Internet & American Life Project mark a departure from the stagnation in home high-speed adoption rates that had prevailed from December, 2007 through December, 2008. During that period, Project surveys found that home broadband penetration remained in a narrow range between 54% and 57%.

If you use 112 million occupied homes/apartments in America as the base (2008 Census statistics), the total number of broadband connections comes to 70 million, an astounding number and a large increase in penetration rates given the economy.

Beyond the overall statistics though is the fact that many segments of society that have traditionally lagged in broadband uptake are now connecting at a rapid pace.  Take the following points from the Pew survey:

Senior citizens: Broadband usage among adults ages 65 or older grew from 19% in May, 2008 to 30% in April, 2009.

Low-income Americans: Two groups of low-income Americans saw strong broadband growth from 2008 to 2009.

Respondents living in households whose annual household income is $20,000 or less, saw broadband adoption grow from 25% in 2008 to 35% in 2009.

Respondents living in households whose annual incomes are between $20,000 and $30,000 annually experienced a growth in broadband penetration from 42% to 53%.

Overall, respondents reporting that they live in homes with annual household incomes below $30,000 experienced a 34% growth in home broadband adoption from 2008 to 2009.

High-school graduates: Among adults whose highest level of educational attainment is a high school degree, broadband adoption grew from 40% in 2008 to 52% in 2009.

Older baby boomers: Among adults ages 50-64, broadband usage increased from 50% in 2008 to 61% in 2009.

Rural Americans: Adults living in rural America had home high-speed usage grow from 38% in 2008 to 46% in 2009.

Again, all amazing increases in penetration among groups that traditionally have not been among the more active users of broadband.  

Seventy percent of those surveyed said they had more than one choice in broadband providers and more than 60 percent of those households said they had three or more choices.  These choices only include “Fixed Wireless”, DSL, Fiber, cable modem and not mobile wireless, although it is not entirely clear that all of those interviewed understood all of those distinctions. Still, the number of choices in the market once again belies the stereotypes.

There are some areas in the survey that are not quite as positive as these broad, overall trends. For example, the number of African American households connecting to broadband barely increased in this survey.   Even in this case, however, a more in depth look suggests that other trends may make this picture look brighter.  Pew has found, for example, that African Americans tend to be more active users of data and online services via mobile phones than other groups in society and it may well be that for some market segments, mobile connectivity to data services is a more common way to connect to the Internet.  

Further, the Pew survey found that monthly prices for broadband access went up over the last year.  However, if you look back over several years, average prices have remained flat, DSL prices are far lower than the average (and far lower than cable broadband prices) and it appears a contributor to the higher average reported prices may in fact be that people are moving up to higher speed connections which tend to cost more.  Again, on the whole the pricing statistics tell a generally positive story.

In sum, the latest Pew survey suggests that the broadband market place, contrary to the criticisms commonly made against it, is competitive, providing more options to Americans and making good progress in getting more people connected to the Internet.  We know there is work to be done regarding some issues – such as deployment in more rural areas and access for some segments of society that remain offline – and we have focused on these issues.  But the market is performing well on a number of key metrics as this Pew survey suggests.

During the summer, a wireless phones can be great for kids –for safety and to stay in touch.  Parents can use some simple tools to stay on top of their kids’ wireless phone use, ensuring that a change in schedule doesn’t cause an unwelcome change on monthly bills.

Verizon Wireless introduced Usage Controls in 2008, and they can be a great investment.   For a few dollars a months, the service allows the primary account holder on a family-share plan to:

-          set limits on the number of text messages that can be sent in a billing period or set time

-          restrict when voice calls can be made.

-          add trusted numbers to a “safe” list, so they can’t be blocked from your child’s phone.

It’s simple to use, and available at myverizon.com. 

We also have free Content Filters that will let you control what video and music can be downloaded to our wireless phones.   

There’s lots more information about Usage Controls at www.verizonwireless.com/usagecontrols.    And, there’s information at www.verizon.com/parentalcontrols about tools for the entire Verizon family of services.

Release here.

In these ads, Comcast once again tries to convince the public that they have “better HD” than Verizon FiOS.  Their argument is largely based on an unsubstantiated claim that they have more “HD choices,” or HD video-on-demand selections, than Verizon FiOS TV has.  (They seem to concede the point that they have fewer actual HD channels than FiOS TV.)

No one is fooled by this.  Industry blogs, news reporting and analyst reviews consistently find that, as ZD Net put it, “Comcast lags considerably behind in offering a full roster of HD channels.”  Problems with Comcast’s HD picture quality have also been widely reported and discussed on the Web.

Once again Comcast attacks Verizon video on demand content.  We don’t know how Comcast justifies its claims, but the fact is that every month Verizon FiOS offers over 15,000 Video on Demand titles – including more than 1,400 in HD.  This includes hundreds of new movie releases every month, some available the same day as the movie DVD is released.  We have one of the largest free VOD libraries of kids programming and international films.  It is indisputable that the Verizon FiOS VOD library – in standard and high definition – is one of the industry’s largest and most diverse.  For Comcast to quibble numbers on this scale is a real sign of competitive desperation.

Comcast unleashes a series of other half-truths in their ads that would make a demagogue blush.

For example:

• Comcast claim: After FiOS’ promotional prices expire, FiOS’ three product bundles can cost up to $400 more a year than comparable Comcast plans – all for fewer HD on demand movies and shows.

Truth: Customers who sign up for a FiOS bundle lock in prices for the one-year or two-year term of the bundle.  And they get more for their money -- Verizon offers more than 100 HD channels in every market and Comcast doesn’t come close to that.  Comcast offers only 49 HD channels even in their own home town, less than half of Verizon’s 117.  As to the $400 claim, we cannot fathom how Comcast makes this calculation, but whatever new math is employed, the claim is clearly false.

• Comcast claim:  Comcast offers “the fastest Internet around” or “faster Internet speeds.”

Truth:  Comcast knows that this claim is simply untrue.  Although Comcast has recently introduced in a few markets a 50 Mbps download speed Internet service, many Comcast markets do not have access to this service while all Verizon FiOS markets have had 50 Mbps service for about a year.  Worse is that Comcast only offers an upload speed on its service of 10 Mbps while Verizon’s upload speed is twice that fast.  It is also very likely that the actually delivered speeds from Comcast are considerably slower than the advertised speed.  Clearly theirs is not the “fastest Internet around.”

• Comcast claim: FiOS fills up its HD on Demand library with recycled Internet content including hundreds of two minute videos like “How to Fold a Towel” and “How to Boil Water.”

Truth: Our 15,000-title video on demand library includes around 425 fun and educational “how to” videos in HD from Howcast. “How to” content is booming in popularity – especially in this recession when DIY (Do It Yourself) is king – and Howcast content has been lauded by CNET, New York Post, TV Week, TIME and others as some of the best-produced, most entertaining and most useful DIY videos around. Howcast content is featured not only on FiOS TV, but also on You Tube, Twitter, Hulu and other well-watched sites.  FiOS brings this extremely popular online video fare to the big-screen in HD – something today’s video enthusiast demands – and Howcast videos are popular FiOS TV VOD content.  Comcast is clearly behind the times in their disdain for these innovative and in-demand videos.

• Comcast claim: FiOS installation means you better clear your calendar.  Installation can take hours and can involve digging up your lawn with heavy construction equipment and bolting big router boxes to the outside of your house.

Truth:  In cases where our fiber is buried on a homeowner’s property, we don’t use heavy earth moving equipment nor do excavation work anything like what is depicted in Comcast’s ads -- as Comcast knows perfectly well.  When we install FiOS in a customer’s home, the work, performed by specially trained technicians, includes mounting a small box called an Optical Network Terminal (ONT) inside or on the outside of the house.  We’re testing even smaller devices that could be placed next to a PC on a desk.  Then we set up an entire home network.  Comcast does not offer this service.  When we leave, all services ordered by a customer are working including computer Internet service.  Comcast’s scare tactics in this ad serve only to distract attention from the fact that Comcast does less when they install cable service, and to avoid discussing the quality of workmanship provided by many cable companies.

This isn’t the first time Comcast has used questionable tactics. For example, Comcast’s use of “fiber optic” to describe its network  confuses consumers regarding Fiber optic networks and who will deliver the most HD.  They aimed this same “more HD” propaganda campaign before against satellite, and they’re dusting it off again against Verizon FiOS.  It’s good for a laugh around the Comcast headquarters.  But obviously Comcast doesn’t care about giving consumers the facts about which provider will give them the best home entertainment experience.

Comparison of Verizon FiOS and Comcast in Philadelphia, Comcast’s Hometown

Number of linear HD channels:

Verizon FiOS:  117

Comcast:             49

Multi-room DVR:

Verizon FiOS:   yes

Comcast:             no

JD Power 2008 Residential Television Service Satisfaction Study – East Region

Verizon FiOS:  First Place

Comcast:           Last Place (out of 9)

Leading consumer ratings magazine on TV Service (Feb. 2008 and Feb. 2009)

Verizon FiOS:   First Place

Comcast:           Ninth Place (out of 10)

Leading consumer ratings magazine on High-def TV service (Mar. 2008)Verizon Verizon FiOS:    First place in each category: Channel Choice, Image quality, Sound quality, Reliability, Value and Support.

Comcast:           Tenth place (out of 12) 

I’ll be using the hashtag VZTT#  #VZTT (for Verizon Tauke Talk) so grab your brown bag lunch and check it out.  Follow me at @CZ on Twitter.

4:30pm Update: Here's a link to the remarks as shared on Twitter, as well as those who also used the hashtage.

Also, here's a photo i took of the briefing It's just like you're there :).

If you can’t make it there, here’s a short preview of Link’s remarks and why we feel the US broadband market is both healthy and competitive.

As I've stated before, the reason is simple: Cablevision, which owns MSG and MSG Plus, refuses to supply the programming in high definition to us.  Then Cablevision advertises that they have the most high-definition sports programming in their region.  Of course, they will sell this programming in HD to the other cable guys, like Comcast and Time Warner Cable, against whom they don’t compete head-to-head.  Pretty audacious. 

But wait.  Doesn’t the FCC require that cable companies make the programming they control available to competitors?  Well, yes.  But Cablevision and some of its brethren maintain that they can refuse to provide certain programming – including the regional and local sports programming that the FCC has called “must have” for many consumers – by exploiting the famous “terrestrial loophole” and routing the programming to other providers using terrestrial wires, rather than satellites.  The Long Island cable company argues that since they deliver the “HD feed” of their sports channels terrestrially, they don’t have to provide the HD.

Today, we asked the Federal Communications Commission to stop cable companies from blocking access to the regional sports programming or the HD format of that programming, no matter how a cable incumbent may decide to deliver it.  It’s pretty obvious that actions like these by the cable companies deny consumers a meaningful competitive choice in video services.  As one federal court recognized earlier this week, the Cable Act authorizes the FCC to take action to prevent these types of anticompetitive practices.

We know that regional sports programming, and the HD of that programming, are important, and many consumers simply won’t choose FiOS TV or any other video service if they can’t watch their local sports teams or if they can’t watch them in HD.  It’s time for the FCC to take action and ensure that consumers really have a meaningful choice.

According to online reports, some Cablevision customers have been surprised to learn that they’ll pay one-time fees to connect to the cable company’s much-discussed 101 Mbps Internet access service.  The fee isn’t mentioned in the press release announcing the service – and it’s a whopper, $300.

Cablevision customers will pay a $300 activation fee for the new tier of service.  They also will be charged a one-time “professional installation fee” of $34.95. These fees are in addition to the $99.95 per month service charge.

Observes Karl Bode at Broadbandreports.com, such fees are “certainly one way of managing the added bandwidth demand of such a service.”

Over at Ars Technica, Nate Anderson is also thinking about the demands that very high-speed services place on carriers’ networks, and he warns consumers to consider Internet speed claims carefully.  He discusses bandwidth constraints such as shared architecture, number of users and equipment limitations for services including cable, DSL and Verizon FiOS and concludes, “When Cablevision in the US offers 101 Mbps to customers but a DOCSIS 3.0 connection tops out at under 160 Mbps – well, it’s clear that customers won’t get anything like 101 Mbps during peak times.”

I made some of the same points here recently.  We believe in high speed connections, and indeed pioneered them.  Speeds will continue to rise as consumers demand them.  No cable company would be offering anything like 50 Mbps or even 100 Mbps service had it not been for Verizon FiOS pushing the competition.  But we also think it’s important to look beyond speed claims to understand what’s involved in delivering these speeds to consumers.

Finally, I see Nate at Ars Technica weighing in on DSL Extreme’s deal to buy fiber service from Verizon and sell a 50 Mbps service for $99.  While this is lower than the price for the same service from Verizon in some places, it is more expensive than our price in others.  We’ll see how this goes.

It seems to me that what all this means is that the world of high-speed broadband is developing very quickly with some new development every week. 

Right now, we think the best thing for most customers is that we improve the upload speeds.  Today more and more customers are shooting their own video and sending it around the net.  Even grandparents are looking for those faster upload times so that they can take advantage of great real-time video chats with the grandkids across the country.

Upload speeds are almost always overlooked in the latest speed claims from cable. Two-way high-speed Internet is more important than ever, and it’s a development that we’ll be hearing more about in the future.

If you’re a small business looking for that competitive edge, I invite you to visit our recently enhanced Small Business Center, filled with tools, resources and a platform to network with other small business owners.  It’s open to everyone, whether you’re a Verizon customer or not.

You can also set a reminder to come back this Wednesday, May 20 at 2 p.m. EST for a free Webinar featuring Anita Campbell, a well known small business expert.  Campbell will discuss how small businesses can market their business online.  To register for the free Webinar or to see previous Webinars, please visit http://smallbusiness.verizon.com/webinar/.

As we embark on National Small Business Week this week, Verizon also is recognizing three small businesses that are using technology to stay better connected with their customers while also providing fast, secure and reliable communications products and services for their employees. If you’re a small business looking for that competitive edge, I invite you to read Lisa Stein’s, Jana Mobarak’s and Debert Cook’s comments about their relationship with Verizon.  Their companies have become more reliant on Verizon Internet, phone and mobility solutions to thrive – even in today’s tough business climate.

The most important way we can work with our small business customers is to help them understand how technology can be their competitive edge. For the most part, small businesses don’t have the resources to hire an IT person, much less a Chief Information Officer. Verizon can become a small business owner’s “virtual CIO” by helping them choose the best services for their business.  For instance, Verizon offers security products; email encryption, and online backup and storage for small businesses.  Additionally, with Verizon’s 24/7 technical support, a small business owner can always call Verizon for IT assistance.

Today, we’re offering owners options – from FiOS 20/20 megabits per second Internet service to DSL-based High Speed Internet service up to 7.1 Mbps/768 kilobits per second.

Small businesses can also lean on Verizon to help find the best price for the most appropriate, secure, reliable and efficient Internet and phone service; host virtual meetings; and even provide additional customer service elements such as FiOS TV in the waiting room. In some cases, small businesses may even quality to enroll in Verizon’s Business Link Rewards program, which enables owners to earn and redeem points for HDTV’s, gift cards and other items they can use for themselves, their business or employees.

National Small Business Week is a good time for small business owners to learn what other small business owners are doing and what additional services are available to help your business better compete in the marketplace.

If you read my posts on this blog, you’ll also see that I try to substantiate my points with relevant facts and statistics to buttress my position.  I believe it is important to set out the facts as you see them as fully as possible. I also understand that not all will see the same situation and the same set of facts in exactly the same way.

Still, I have a very difficult time reconciling the “facts” in Free Press’s most recent report on broadband with the realities of the market place.  The report paints an unrelentingly dreary view of how the broadband market looks and more importantly how competitive the market is.  They also recommend a substantial re-regulation of the broadband market based on a central premise – that the broadband market is uncompetitive.   They claim the market is dominated by a “duopoly” of cable television companies and regional telephone companies that do not compete aggressively with each other.

The state of competition in the broadband market is important because a competitive market would inevitably dispel all of the concerns around “net neutrality”, whether it’s the question of exclusive content, diversity of service, or whatever else. Competitive markets would not allow broadband providers to force consumers to buy content they didn’t want, or impose restrictions on Internet access they did not accept.

From where I sit, it is very hard to dispute that the broadband market is competitive.  Very few of the facts I will share are even assessed in the Free Press report but they are very relevant to how competitive the market really is.

First, take a look at this paper on the broadband authored by Ev Erlich, a former Clinton Administration economist and official in the Commerce Department.   Mr. Erlich looks at a number of measures of competitiveness but makes this overall observation:

“We expect competitive markets to deliver ever improving value. That means measuring both prices and quality, which requires some constant measure of what is being sold. A ton of steel is a ton of steel and a box of cereal is a box of cereal; it’s easy to measure by how much their prices are falling. But prices for other, more innovative goods change dramatically over time. For example, a 2008 computer model and a computer manufactured ten years ago may have both cost $1,000, but today’s computer is much better in every aspect, meaning that computers’ effective prices are constantly falling. It’s as if the same amount of money that used to buy hamburger now buys steak.”

He goes on to demonstrate that prices have fallen dramatically for broadband over the years, and speeds (a measure of more value for the dollar) have continued to increase year over year.  Free Press constantly refers to “market power” and “market dominance” in its report on broadband.  As Mr. Erlich goes on to note:

“Market power allows companies to hold output back to enforce higher prices. We would expect, therefore, the penetration of broadband to be slower if its provision was non-competitive.  Yet in the past few years, consumers have witnessed both the greatest absolute progress in speeds and in connections themselves.”

In competitive markets, companies make inroads into each other’s markets.  You see this vividly in the broadband market.  In the voice, video and high speed Internet segments, market leaders are losing market share to competitors and new entrants.

-        Voice:  Telephone companies are losing share to cable (~15% market share) and wireless (~20% market share).  In fact, Free Press refers constantly in its report to “dominant” carriers yet the telcos are losing hundreds of thousands of existing lines per quarter to cable and wireless.  If the telcos were so “dominant”, would they really be unable to stop this line loss?

-        Data:  Cable and telco broadband services are highly competitive, with market share portions seesawing back and forth every quarter.  The fastest growing segment of the broadband market today is not even landline – it is wireless broadband service.  Clearwire (backed by Intel, Google) is deployed in 39 U.S. cities competing with both cable and telco.

-        Video:  Cable is losing share to satellite (~30% market share) and telcos (~3% share and growing); Verizon is now offering video to ~10 million households with its FiOS fiber network and to a total of 30 million households via the resale and bundling of Direct TV.

Competition is also leading to rapid technological innovation and falling prices.  Faced with high fixed costs, broadband operators compete aggressively to win and retain customers and so achieve economies of scale.  Competition occurs on both price and non-price dimensions.  As a result:

-        Broadband Speeds are Increasing:  Verizon is rolling out FiOS (up to 50 Mbps in each direction), cable is countering with DOCSIS 3.0 (50+ Mbps downstream); Clearwire (WiMax) is offering up to 4 Mbps; LTE (4G wireless) will offer multiple megabit connections (much higher speeds than today’s DSL offerings) beginning in early 2010.

-        Prices are Falling:  Cell phone prices have fallen 40 percent in the past decade; the price of a 768 Kbps broadband connection has fallen by 50 percent since 2001.

-        New Services and Devices are Proliferating on Broadband Platforms:  High-speed fixed and mobile connections are enabling new services like Mozy (online data backup), T-Mobile@Home (VoIP) and V-Cast (mobile TV); new devices like Apple iPhone, Blackberry Storm and Google G-1; new services like Twitter, Facebook, and You-Tube.

-        Penetration is Growing Rapidly:  U.S. residential broadband penetration nearly doubled – from 32 percent to 56 percent – between Q1’05 and Q2’08 and has gone from 4 million households in 2000 to approximately 65 million households today.  Yet, at the Free Press event where the new report was discussed, I constantly heard comments about the market not working to get broadband into homes.

I look at our industry and how far it has come on so many dimensions and I am amazed how much has been accomplished. We are one of the three leading nations when it comes to fiber to the home deployment for example, driven by competition and demand.     We far surpass Europe in this regard and yet Free Press consistently cites the European policy model as superior to that of the U. S.  It is hard to understand how such a pessimistic picture of our industry and its accomplishments can be set out but that is what Free Press has done.  I think it is misleading and not a good guide for policy.

In this latest deal, Frontier will acquire all of our local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin.  The transaction also includes a small number of Verizon’s exchanges in California – some of those bordering Arizona, Nevada and Oregon.  At the end of 2008, these operations served approximately 4.8 million, or about 13 percent, of our 36.2 million local access lines.  All of our remaining local landline operations have high concentrations of FiOS in more densely populated markets.

Verizon’s approach here is not new.  This transaction is part of our multiyear effort to transform our growth profile and asset base to focus on our stated direction of wireless, FiOS development and global IP.  Verizon believes that the wireless, broadband and global IP sectors are in their infancy in terms of market development and will provide our company and shareowners access to markets with much higher growth opportunities well into the future.

Reaction to the news has been largely positive with commentators calling it "the right thing for Verizon to do," and saying "the deal appears to be a win-win for both sides."

We think this transaction will result in more highly focused, higher growth Verizon, plus an approximate 68 percent ownership stake in the new company.  In addition, there is no change in dividend policy;our goal remains an annual dividend increase.

Customers will benefit from Frontier’s commitment to increase broadband penetration in these markets, and employees will be treated fairly.  Frontier will honor existing collective bargaining agreements and has agreed to provide management employees, for no less than one year following the merger, at least the same rate of base salary, performance and other bonus opportunities.

We expect the transaction to be completed in about a year.

The survey found that 20 percent of households had only cell phone service in the last half of 2008, while 17 percent had only landlines.

What do we make of these findings?  And what do we make of commentators, like the New York Times’ Saul Hansell, who wonders whether or not the telephone industry is headed for bankruptcy because of the decline of landlines?

First, we’ve seen this trend from landline to wireless phones for a number of years now, so we don’t believe it is primarily economy-related.  We believe it is essentially a technology transformation, and Verizon has already transformed its business as a result.

What any business must do to survive is to adapt to change. This is pretty obvious, I guess, yet many fail to do so. A decade or more ago, we saw that wireless phones could be popular, and we’ve built a tremendous wireless business.  Earlier in this decade, we saw an opportunity to provide fiber-optic technology directly to customers’ homes and offer the best possible video, audio and Internet services, and we’re building the largest fiber-to-the-home network in the United States.  Both networks help us weather – and surmount– changes in communications technology.

Our customers continue to switch from traditional phones to wireless phones, but our landline loss has tracked within a certain range for the past five quarters, with no substantial changes in the trend.

The good news is that if you look at Verizon overall, Verizon Wireless gained 6.4 million customers during 2008, including customers as a result of the Alltel transaction.  In the same period, Verizon lost 3.8 million landlines.  However, we lost only 2.04 million landline customers when you consider that customers often have more than one line.

At the same time, we continue to see an increasing correlation between our triple play and landline retention.  As FiOS continues to scale, we expand our triple-play coverage, which tends to keep phone customers with Verizon.  Where we don’t offer FiOS, many customers can get our DSL-based High Speed Internet service, which we package with voice and DirecTV.

So when 40 or so financial analysts look at this picture – virtually all except for the one quoted by Saul – they see a business with a strong future.  Although traditional phones will be around for many years to come, it is obvious that there will be fewer of them. Instead we expect to have a great wireless, TV and Internet business with millions of customers happily using those services.

On the financial side, the takeaways for Verizon are:

• Verizon reported revenue, earnings per share and dividend growth for the first quarter of 2009 compared to the prior year – the only company to do so in the Dow 30 which has reported to date.

• The mass markets segment, which includes that traditional landline business, grew revenue at a rate of just under 1% annually for the first quarter – because of the investments Verizon has made in our fiber-optic service.  FiOS is now delivering superior service to over 2 million TV customers and nearly 3 million Internet customers.

• That same mass markets segment was 18% of Verizon’s revenues – because of investments we have made in wireless and services for enterprise business customers. Verizon Wireless now has over 86M customers, compared to fewer than 18M primary residence access lines.

• We continue to invest significant amounts of capital, over $17 billion in 2008, to upgrade the country’s broadband infrastructure.

• Our debt ratios are very healthy, and our business is generating cash – Verizon is not overleveraged and burning cash like some of the failing companies.

We’ve clearly adapted to changes in our industry and we’re serving customers no matter what sort of communications they choose.

Part of the reason for this year’s increase is that Mother’s Day will be commemorated on the same day in both the United States and Mexico, something that doesn’t usually happen.

The good news for all sons and daughters who intend to call mom if they can’t visit in person is that Verizon’s network is reliable, robust and ready to process the holiday calls.

On a typical work day Verizon’s landline network processes more than 1 billion calls on its wireline network with 99.9 percent reliability.

The Verizon landline voice network delivers unmatched voice quality – clarity and tone – that enables people to hear subtle voice inflections that express emotion and that are not attainable in a text message or e-mail.

So if you can’t visit your mom in person or send her a gift in the mail, the next best thing you can do is phone home.  And when you dial away, remember your call will be in good hands on Verizon’s network.

Just looking at the broadband and IP markets, however, should convince anyone that this simple nostrum is dead wrong.   Innovation can and does happen in both “managed” environments and in the more “unmanaged” or “open” environment that is the Internet. For example, here are some innovations that are based on the “managed” model.  I think they demonstrate that innovation has many features and influences.

• The “Wii” gaming system came about in the very much controlled and managed system Nintendo has created for its games.   The Wii system is one of the most innovative gaming systems ever developed and it was created in an environment very much under the control of Nintendo. It is hard to argue that this gaming model is not innovative.  At the same time, many MMORG games or “massively multi-player online role playing games” are created in the “open” Internet environment.  So innovation happens in both spaces in the gaming sector.
• The implication of many of the proponents is that a network operator who manages the set of devices that can be attached to its system will pursue the “full integration” model that was the old AT&T.  This is not true.   The Apple iPhone provides a good example.   It is a “closed system” in the sense that no application can be released for download on the iPhone without Apple’s review and approval but it clearly has spurred lots of innovation and the release of literally thousands of applications.  At this juncture, far more of its applications are being downloaded and used by consumers than other business models, including the Google Android phone.
• “Open” models for pricing (i.e., calls for “non-discrimination” in pricing which would prevent usage based pricing schemes of various kinds) are also lauded by the proponents of net neutrality.  Yet, ironically a prohibition of price differentiation could force providers to institute usage-based pricing because under the economic definition of price discrimination, charging users the same price for different levels of usage or for services that have different underlying levels of cost (i.e., more usage costs more) is discriminatory.    Again a blind focus on “openness” leads to decisions that are not necessarily in the best interests of consumers and may harm innovation.  Why is it good practice to force all consumers into the same model when there are pricing approaches that better fit usage patterns to prices and feature sets?  I’m not in any way advocating usage based models, just pointing out that they can be innovative and offer new choices to consumers.
• The advocates would say traditional cell phone models are “closed”. Yet, the innovation in this sector with respect to handsets is arguably as great or greater than the innovation related to PCs in the “open” Internet environment.   Further, the subsidized cell phone hand set model has led to rapid penetration of cell phones into all segments of society, including even homeless users.   The unsubsidized “open” Internet model for PCs has made adoption of broadband and Internet access more challenging.   So the cell phone model is “innovative” in the sense that it has led both to lots of innovation in handsets and to high rates of adoption.

The point is not that open or managed models are always better or worse.  The point is that there is no one “right” model for promoting innovation.   There are examples of managed and open business models that have been both good for innovation and bad for it.  There are also examples of managed and open models that have both succeeded and failed.  The point is in a competitive market to let companies develop business models they believe will serve consumers best and see how things play out. 

With today’s technology, you don’t have to break much of a sweat to deliver 100 Mbps to a few customers.  But given the inherent limits of the cable platform, a cluster of bandwidth junkies living near each other could be a real problem.  One estimate is that a single 101 Mbps customer would use some 60% of the capacity in a neighborhood.  Other users?  Outta luck.

There is also the question of market demand.  How many customers have been storming the castle, asking for 101 megabits per second bandwidth?  What happens when a customer with that speed hits the much slower Internet?

So Cablevision is offering very high speed service to a very limited number of customers when there is little evidence of market demand for the speed.  It is a parlor trick. 

Consider this:

·         Verizon's fiber-to-the-home network has a capacity to deliver 400 Mbps to a single home, and we’ve had a 50 Mbps service available across the FiOS network for a year.  Verizon’s fiber optic network has the muscle to carry the load – 2.4 Gbps downstream dedicated to no more than 32 customers.

·         Don’t forget about the burgeoning need for upstream capacity.  Cablevision is promising 15 Mbps upstream.  Verizon already offers up to 20 Mbps upstream to all FiOS Internet markets.  And our fiber has plenty of room for more.

·         Effective speeds of networks depend on the speed available on the slowest link.  Today’s Internet runs at speeds far slower than 100 Mbps, on some segments speeds as slow as 10 Mbps.  So if you have a 100 Mbps link to the Internet connection point, but a 40 Mbps connection from there to the distant server, the effective speed of your transaction over that link will be 40 not 100 Mbps.  It is one reason why there is little customer demand for speeds in the 100 Mbps range today.

·         We believe this will change.  Cross-network speeds will increase and demands from users at home will escalate as new applications are developed for services like video, but also for services that don’t exist today.

Verizon has been the lone provider of ultra-high-speed broadband services for several years.  Competition is a key innovation driver, so in that sense FiOS along with CVC's product and the ultra-high-speed services of others, have the potential to spur the entire industry to breed new ideas at all levels…applications, content, information as well as transport.  And, of course, Verizon intends to keep our FiOS products fresh, strong and market-leading.

Time will tell whether CVC and DOCSIS are up to the task.  Increasingly, engineers are concluding that only fiber-all-the-way to the user will be able to actually meet broadband capacity needs, and that all else is stop-gap.  For now, CVC’s leap to 101 Mbps is about market positioning and bragging rights rather than delivering a useful service to a mass customer market.

UPDATE (4/30/09): 

I’ve seen a number of comments about this post, below and around the internet. You can see some of them at DSLReports.com, GigaOm, and LI Biz Blog, among other places.  Not everyone agrees with me, of course, but the conversation is great, and people are passionate.  Let’s keep talking.

Steve Zipperstein, vice president and general counsel of Verizon Wireless, was a guest this morning on WNYC's Brian Lehrer's show in New York City, talking about auto warranty telemarketing and our efforts to stop these calls from reaching our customers.  

Here are the related releases and here's the link to the radio interview on WNYC. 

Recently, some broadband providers began to test usage pricing that often included a range of usage packages or tiers (i.e., 1 Gigabit per month with a charge for any usage over that limit, and similar offerings with higher capacity limits).  The question I was asked was what Verizon thought about these approaches and whether we were planning to do something similar.

First, this is not an official view but I think the question begs an important issue.  These are highly competitive markets with companies trying to come up with more value, innovation and differentiated offerings to help them attract customers.   Markets are complex systems consisting of millions of people making decisions about what to buy and how to spend their money each and every day.  In such an environment, companies do experiment and try different things to see what attracts the consumer.  This is seldom very obvious and it is why competitive markets are so important. They help sort out what consumers’ value and what they are willing to pay for each product or service.

In this sense, the broadband providers offering these usage packages were testing consumer reactions.  In competitive markets, consumers decide whether they like something or not, and whether they see value or not.  In some cases with regard to these recent offerings, they seem to be speaking loudly and clearly.  I’m not going to vouch for how these packages were set up or marketed because those factors also influence consumer reactions.  So does time and experience.

So when the question was asked, I answered that I see these trials as a part of the continuing evolution of the broadband market.  Consumers clearly have choices and are making their views known.  That is not to say that things won’t change over time or that new offerings won’t be better received.  We’ll just have to wait and see what happens.

As for Verizon, we obviously have high quality, high capacity networks in our FiOS fiber to the home services.  We believe FiOS is an important initiative and offers high value for consumers.  We believe it helps differentiate us in the market and we are doing well with our FiOS packages.  I think it is fair to say that we are pleased with the way things are going and have been very successful selling our existing packages.

That said, broadband is a competitive market and pricing packages and offerings are an important part of the market.  Companies can try different pricing approaches and consumers will decide what they think.  I can see ways that usage packages could be priced that could really help many segments of the market, such as low level users.  I can't predict what will happen in the future as the market evolves.  Consumers are in charge and we’ll just have to see how they react to the market as it continues to evolve.  In the end, they will make choices that will help to drive more innovation and the offering of more options.

EDF will also highlight some of Verizon’s initiatives to lower energy consumption and reduce greenhouse gas emissions in the upcoming Innovations Review 2009: Green Advances for a New Economy. The report, which will be made available today, contains initiatives from various industries that EDF hopes will serve as models to help other organizations reach the intersection between good business and good environmental practices.

As businesses, we solve problems for our customers every day. In Verizon’s case, we operate the nation’s most reliable wireless network and the world’s most interconnected IP network--platforms for communications and commerce worldwide.  Verizon Business, for example, handles millions of virtual meetings each month through a wide range services including some of the most advanced meeting tools available today, like telepresence. This reduces travel, lowers emissions, and increases productivity. The virtualization of computing platforms is another area where Verizon services are helping our customers reduce the number of dedicated servers and PCs while reducing energy consumption.

I’m glad to say that we seem to be at the cusp of a wave of innovation. In my own industry, we’re certainly ready to provide the broadband and wireless communications services and expertise necessary to lead cleaner, smarter lives. I’m confident that as we create smart national grids, construct smart buildings, and see an increase in the use of renewable energy sources, we will also see a new generation of innovations.

Well, Fortune Brainstorm will be starting again soon, so that’s all for now.

In his April 16 column More Evidence Verizon Made Right Bandwidth Bet, Kim drives his point home by noting that “Verizon is the only former large U.S. incumbent local exchange carrier [ILEC] that has positive revenue growth within its consumer wireline segment.”

[Broadband reports blogged about the same column. – CZ]

To backup that assertion, he presents data gleaned from the fourth quarter 2008 financial results for Verizon, AT&T, and Qwest.  “Verizon had in-region consumer revenue growth of 2.9 percent,” Kim writes, “while AT&T had in-region consumer revenue growth of negative 5.3 percent.  Qwest Communications had negative in-region consumer revenue growth of 7.5 percent.”  As further proof, the author cites the opinion of the global credit rating agency Fitch Ratings, which has found that Verizon “has been most successful thus far, relative to the other large ILECs, in transforming its wireline business.”

Gary Kim’s position – which we were not aware of until we read his column – parallels our own view of the home network and the consumer technology sector.  Change is the only constant in this market.  And, the best way to enable our customers to take advantage of rapidly changing technology is to provide them with a network and services that not only meets their bandwidth needs today, but also into the foreseeable future and beyond.  That’s what the FiOS network provides and its one of the unique advantages that doing business with Verizon has to offer.

I’m not sure what BR is referring to with regard to a “strategy” but if it is suggesting that we have not had a national broadband policy, that is not true.   There has been a policy and it has been focused on promoting platform competition among network providers.  

And the reality is that this policy of encouraging platform competition has on the whole worked quite well.   The BR comments suggest that other countries have had more “success” than the U. S. in encouraging broadband deployment and advancement because of their “strategies.”   But how do you measure “success?”  Isn’t looking to the future a key element of success and doesn’t it include evidence of rapid deployment of advanced broadband technologies?    Many European countries, for example, have not been able to rely on platform competition to promote broadband deployment and advancement.  So, they have used other strategies usually centered around government mandated unbundling and access regimes.  Some have pointed to the number of companies using unbundled or leased lines as evidence of success in promoting broadband deployment.

Yet, the most recent report from IDATE, a European based analyst firm, finds some strong evidence that where platform competition exists in Europe is where the most advanced networks networks of the future are being deployed.   For example, in France the largest number of fiber lines are being deployed to homes not by the companies using unbundling telco lines but rather by the cable company.   Countries like Denmark and Sweden that do have platform competition are seeing far more fiber deployments than other countries in Europe where platform competition is minimal.  To quote the IDATE report “with only around 1.7 million FTTH/B subscribers at the end of 2008, Europe is still lagging behind the US and Japan . .. “  In fact, according to the Fiber to the Home Council, the U. S. has more than 15 million homes where fiber to the home networks are available and more than 4 and ½ million consumers have fiber broadband connections.

The BR complains about broadband pricing again simply offering an observation that broadband prices in the U. S. do not compare with those in other countries. Yet, prices have clearly come down substantially in the U. S. over time.  For example, ADSL prices have come down from around $50 a month in 2001 to less than $20 in many U.S. markets today.  Again, the evidence from independent international observers suggests the U. S. is doing quite well on pricing.  The ITU just completed a report that suggested that based on a market basket measurement of prices, the U. S. has among the more affordable broadband offerings anywhere in the world.  The EU recently completed a report that found European broadband prices on average for 1 - 2 megabit service is around $42 a month, much higher than for comparable DSL speeds in the U. S.

The BR also complains about U. S. broadband speeds.   While it is true that Japan and South Korea both have seen extensive fiber deployment, there are a number of factors that suggest that these markets are far from perfect.  For example, studies on actual delivered speeds in these countries suggests that congestion is a problem in Japan, even with a significant fiber network.   And some tests show that the U. S. actually is among the countries with higher actual delivered – not advertised – average speeds including reports from speedtest.net.   I have also done my own analysis going back to the late 1980’s when I began to use the Internet, measuring the speeds I had available over time.  I found that the top, available U. S. speeds have doubled very twenty months.  That does not mean that 50 meg connections (generally the fastest speed available right now) are available to everyone but they are deployed and significant parts of the population are able to sign up for the service.  Further, if you look at the number of Americans moving up to faster speeds over time, you find that FCC data shows the number of transmission lines with speeds greater than 2.5 megabits to 10 megabits, for example, grew by 70 percent between 2005 and 2007, from approximately 27 million lines to over 45 million lines.   Broadband connections faster than 25 megabits are also growing dramatically.  Clearly faster and faster networks are becoming available to more Americans.

We do have some challenges in our markets, primarily related to two issues – lack of broadband availability in some rural areas and lack of broadband usage despite its availability among some segments of the population.  Verizon just submitted comments to the NTIA with regard to its broadband stimulus program acknowledging the importance of addressing the lack of deployment and suggesting ideas to help make the grant program as effectively as possible.  We believe this program is important. 

We also believe that demand side programs – such as digital literacy and training programs that can also be supported by NTIA programs now under consideration – are an important means of increasing broadband adoption.   Studies by the Pew Center suggest that the price of broadband is not the major impediment to the adoption of broadband in households that do not yet have it. Instead, factors such as the lack of familiarity with the Internet and with computers and the belief that there is little compelling reason to go online are major reasons why some people do not sign up for broadband service.   The NTIA grants can help in this regard and we need to promote these ideas.