Verizon: We won. Let's ask for more.
Will the phone giants hold broadband rollouts hostage to tax reform?
I should first say I am not defending a hideously complicated regulatory and tax code. But this quote from Verizon Communications CEO Ivan Seidenberg is interesting. The company, and the other big local phone companies, have said for years they wouldn't invest more in broadband until the FCC ruled their way on a bunch of regulatory issues, essentially overturning much of the 1996 Telecommunications Act.
Well, they got their way on most of it, and are now starting to roll out fiber projects. But today we hear Seidenberg say the following: "Verizon's future depends on our continued ability to make big investments in growth markets. For us to do that, we need public policies that allow us to earn a return for the risk we take. And that means clear and consistent rules that expedite the development of next-generation services and products."
More simplicity in the tax code and regulatory system are the answers, he said. Is this another carrot-and-stick approach coming? Change the tax code, or we can't finish our fiber build-out? I wouldn't be a bit surprised.
Seidenberg is also pushing health care reform that doesn't tie health care to the job. No, not single payer, perish the thought – he likes the idea of people "owning their own" health care.
Small separate rant here. "Owning your own" health care is great for businesses, because they donÂ’t have to pay as much. For your average regular person, it's a flat-out dangerous idea.
The point is to introduce market-based reforms into health care, so the person consuming has incentive not to overuse the system. But what sick person is the "informed consumer" in the theoretical perfect free market? This provides a disincentive to preventive care, which is the thing that actually lowers systemic costs. This leaves consumers holding the bag for accidents that go above the level in their "savings account" level. Got the flu and got hit by a car in the same year. Too bad for you.
End rant. Keep an eye on Verizon and the other Bells next year, it's going to be a huge lobbying year. There will probably be a rewriting of the Telecommunications Act, and now it looks like the phone companies might be involved in tax reform too. At least the lobbyists will have jobs next year.