Verizon CEO: We’ve Never Provided ‘Dumb Pipes’

Verizon CEO Ivan Seidenberg
Verizon’s CEO and chairman, Ivan Seidenberg
Source: Verizon

Ivan Seidenberg, chairman and CEO of Verizon Communications, isn’t a big fan of network neutrality. But he is a strong proponent of broadband networks — and of their owners taking an active hand in shaping the Net’s future.

In fact, to Seidenberg, carriers like Verizon play a major role in innovation in large part because the network isn’t simply a “dumb pipe”.

The phrase is something of a loaded term for followers of the Net neutrality debate, and for Seidenberg, it and other terms used in the network neutrality debate are troubling.

During his keynote speech at the Supercomm telecom conference today, he told the audience that there are some who argue that network carriers like Verizon and content providers like Google occupy different parts of the network ecosystem. The difference is usually explained as “dumb pipes and smart content” — a description that doesn’t sit well with the Verizon (NYSE: VZ) chief.

“This is a mistake — an analog idea in a digital universe. It fundamentally misreads how innovation happens in a dynamic and collaborative industry,” Seidenberg said. “It understates the role of sound network management practices and the smooth functioning of the Internet today and it ignores the very real benefit of smart networks for customers.”

Verizon and other major ISPs have long mandated the need for them to take an active role in regulating what takes place on their networks — a claim that Net neutrality advocates say paves the way for anticompetitive abuse and thwarts innovation.

But Seidenberg said that from a security perspective alone, Verizon’s active role in network management enable it to intercept network breaches before they become a problem. It also enables Verizon to prioritize high-priority traffic for emergency services.

“If we can’t differentiate between packets we can’t prioritize emergency communications for first responders,” Seidenberg said. “The truth is we have never provided dumb pipes — ever.”

Seidenberg’s appearance come at a critical time for the telecom industry, with the FCC on the verge of announcing proposed network neutrality rules this week.

According to Seidenberg, if Verizon is unable to earn a return on its network investments due to network neutrality meddling, then progress could be halted.

“If a burdensome regime of network neutrality is imposed on all parts of the Internet industry, it will inject an extraordinary amount of bureaucratic oversight into the economy’s main growth engine to the future,” Seidenberg said.

Rather than harmful restrictions, Seidenberg suggested that the FCC should focus on rules for encouraging growth, not limiting it.

“We can’t create a smart economy by dumbing down our critical infrastructure,” Seidenberg said. “We can’t move forward by pitting network providers and applications developers against each other when the real promise of broadband is an expanding pie for everyone.”

The promise of broadband: Economic stimulus?

Seidenberg told the Supercomm audience that, in his view, broadband networks are the key to productivity and the economic recovery. As a result, continued investment in broadband networks is required to help facilitate the emergence out of the current recession.

Over the last nine years, Seidenberg noted that broadband industry has made tremendous strides. He said that real bandwidth power for the average American is now one hundred times more than it was in the year 2000.

“The reason why we have a big impact is our technology is inherently productive and it has a multiplier effect throughout the economy,” Seidenberg said.

TV goes “truly interactive,” courtesy of Verizon

One major impact that the proliferation and evolution of broadband is having on consumers is the new capabilities it affords for interactivity.

In particular, Seidenberg said that Americans today have as many as 30 digital devices in their home, and the distinctions between them are rapidly disappearing, thanks to the role of the network.

[cob:Special_Report]”People want access to their digital media anytime, anywhere, and to do that, we’re using our technology to tie together a whole digital environment,” Seidenberg said.

For instance, Verizon is working to enhance its broadband routers, including expanded functionality to interact with the TVs of users of its FiOS service, giving them new features and helping them manage their digital lives.

Seidenberg said that to date, Verizon has had some widgets that enable users to get weather, news, Facebook and Twitter on their TV screens — but more innovation is on the way.

In part, that will come through a new software development kit (SDK) that he said Verizon plans to ship for developing apps for broadband-delivered TV. With the SDK, Verizon will begin opening the platform to third-party developers.

“The really exciting thing is we’re using this platform to realize the long-held promise of truly interactive TV,” Seidenberg said. “We’ll be encouraging innovation around the biggest, best and most under-utilized screen in your home, the TV.”

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