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Broadband Infrastructure Build-out Found to Meet or Exceed All Expectations
CAMBRIDGE, MA, November 19, 2002 -- Verizon's commitment to provide Pennsylvania with a modern and efficient broadband infrastructure remains as strong as ever, according to "Promises Fulfilled Again: Verizon Pennsylvania's Infrastructure Development," an independent report released today by economic consulting firm National Economic Research Associates, Inc. (NERA).
In fact, according to experts in NERA's global communications practice, Verizon Pennsylvania's network ranks as one of the best in the country, and the company continues to meet or exceed the technology and service commitments first laid out in its Network Modernization Plan (NMP) approved by the Pennsylvania Public Utility Commission in 1994. Verizon's NMP ensures the deployment of an advanced telecommunications network throughout Pennsylvania by December 31, 2015, in accordance with statutory obligations.
According to NERA economists, Verizon Pennsylvania has done an exemplary job of creating and maintaining an advanced network infrastructure in Pennsylvania by meeting or exceeding a number of its technology commitments. These include making broadband facilities available to 100% of all health care facilities, public schools and industrial parks within five days.
NERA also critically reviewed several interim milestones included in Verizon Pennsylvania's NMP as part of its commitment to make broadband transmission facilities available to 100% of its rural, suburban and urban customers by 2015. The report found that, by the end of 1999, Verizon had surpassed 30% availability for its entire serving territory (up from the 20% benchmark for 1998). In addition, the company has already exceeded its 2004 commitment level for urban and suburban consumers (reaching 78% and 57%, respectively, in 2001 vs. the 50% 2004 target), and remains on track to reach its 50% commitment for rural consumers by 2004.
"Verizon's network is well positioned to deploy the cost-efficient technology required to bring a high bandwidth connection to any home or business in Pennsylvania," said NERA Senior Vice President and Communications Practice Chair Dr. William Taylor. "The preparatory work has been done to support the market-driven technologies and service innovations that were envisioned by the NMP."
The report also praised Pennsylvania legislators for exhibiting sound judgment and good foresight when they set their 1993 mandates regarding the broadband market in Pennsylvania.
"At the time that Verizon Pennsylvania's NMP was proposed, broadband services were very different from what they are today," remarked Dr. Taylor. "Today, the use of the Internet has revolutionized the delivery of broadband services, and these services continue to evolve over time as a consequence of consumers' tastes and their willingness to pay."
NERA's report concluded that, by only mandating that broadband be made available and leaving open the determination of technology and services, Pennsylvania legislators were clearly acting in the best interests of consumers.
In performing a comprehensive analysis of broadband technologies and services, NERA's economists cited three key findings. First, there is, and has been, no consensus regarding the desirability of any particular broadband transmission capacity rate. Even today, various industry participants characterize a transmission rate from as low as 100 kbps (kilobits per second) to as high as 1.5 Mbps (megabits per second) as "broadband."
Second, although there are several broadband service options currently available to consumers, DSL (digital subscriber line) and cable modems remain dominant. In order for consumers to realize the advantages of a higher-capacity network, such as Fiber-To-The-Home, new services and applications would have to be developed, as there are no such services today. In this environment, service providers have little or no incentive to devise and market services that require higher rates of transmission capacity.
Finally, if bandwidth suppliers like Verizon Pennsylvania were to be forced to make faster transmission capacity rates ubiquitously available, they would be expending resources to facilitate the delivery of services that do not now exist. NERA's report concludes that it simply does not make economic sense for anyone to build such a network, when there are no services yet available to make use of that network.
In addition, by analyzing data made available from a set of annual reports to the FCC by each former Bell Operating Company, NERA economists were able to compare Verizon Pennsylvania's overall broadband infrastructure development to that of 47 other states. The analysis revealed that Verizon's performance in Pennsylvania as of 2001 ranked as the fifth best in the country, up from seventh best in 1997. Additionally, Verizon Pennsylvania is one of only two former Bell Operating Companies to maintain a top-ten ranking over the years NERA studied.
NERA economists concluded that there is no doubt about Verizon's commitment to place and maintain a modern and efficient infrastructure in Pennsylvania. Indeed, all evidence points to the conclusion that consumers in Pennsylvania can take advantage of one of the most modern broadband infrastructures in the country.
About NERA
NERA (www.nera.com) is a leading global economic consulting firm. Founded in 1961, its focus is on the practical application of economics to complex business and legal issues. Under the auspices of parent company Marsh & McLennan Companies, Inc., NERA operates with 500 professionals in 16 offices worldwide.
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