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					VERIZON
Broadband Perspectives: Past, Present & Future
Tuesday, April 28, 2009
                            Communications Infrastructure



1876          1891          1969          1979        1993


                                                      C U L8R



                                             IP
                                          Signaling




       1876          1938          1965     1981         2005
                                         Today’s Communications Usage
                       Every day, consumers rely upon a wide range of
                               communications applications.*

                                                                Traditional
                                                                phone talk
                                       3%
                                                                Cell phone talk
                    9%
                                                                IM on PC

                                                                Sending email

                                                                Cell phone texting

                                            31%                 VoIP


* Source: Yankee Group, 2007
                                                                                     3
                                      Consider How You Spend Your Day
                                                   TIME                          ACTIVITY
  The average person spends
                                                  7:00 AM    Watch the morning news .
  5.25 hours using some form                      8:00 AM    Check blackberry on the way to work.
 of communications each day.                      9:00 AM    Turn on desktop at work.
                                                             Video conference call with clients in
                                                  10:00 AM
                                                             London.
• Consumers use a wide variety
                                                  11:00 AM   Pay bills online.
  of broadband technology every
                                                  12:00 PM   Order lunch on SeamlessWeb.com.
  day, either at home, at the
                                                             SKYPE with parents, who are on a cruise in
  office or on the go.                            1:00 PM
                                                             Alaska.
                                                  2:00 PM    Refill prescriptions online.
• Broadband Internet access is                               Receive a text message that Sam got home
                                                  3:00 PM
  now available to about 70                                  from school alright.

  million households in America*                             Email Mai to let her know you’ll be on time
                                                  4:00 PM
                                                             to pick her up from ballet.
  and well more than 90% of all                              Text Mark to pick up salad-fixings at the
                                                  5:00 PM
  U.S. homes and businesses.**                               store.
                                                  6:00 PM    Check blackberry on the Metro.
*Source: Pew Center for Internet and Society
                                                  7:00 PM    Download a movie to watch with the kids.
**Source: National Cable Television Association

                                                                                                         4
                            Broadband Value Increases…..
  The value of today’s broadband Internet can be found in the
innovations and network advancements over the last ten years.

The reach of broadband is getting bigger while giving consumers more
value and faster speeds for less money.

 • The price of a basic wireline broadband connection has fallen by half – or
   more – since 2001.

 • Broadband connections reach more and more homes, from 3 M HHs in
   2000 to 67 M HHs 2008.

 • Innovation and investment have driven faster speeds, up from 756 kbps-
   1.5 mbps earlier this decade to 50 mbps with Verizon FiOS today.

 • Today a customer can get 50 Mbps of broadband speed for what he had
   to pay for 1/10 that speed in 2001.

                                                                                5
                     As Broadband Reaches More and
                                    More Americans

                                                                        >50,000
                                                                        WiFi
                                                                        Hotspots


          55% of adults
          in US have
          broadband at
          home                              100

                                             80

                                             60

                                             40

                                             20

                                              0
                                                  Percent of US Population with Access

                                                          Cable Modem     DSL
Four national wireless broadband networks
                                                                                         6
                                      … New Uses Arise

Traditional voice service now competes with a proliferation of
options enabled by capacity and competition: Voice over the
     Internet, e-mail, text messaging, instant messaging,
                    twittering, and mobility.




                                                                 7
       Rapid Increase in Uptake and Types of
  Broadband Suggests Market is Working But
There Is Still Room for Broadband Expansion




                                           8
Despite Competition and Investment Some Americans
Have Not Signed Up or Cannot Get Access




                                              9
                  But Price of Broadband Access Does Not Appear
                  to Be the Main Reason People Are Not Adopting
                  Broadband

Summary of reasons dial-up and non-internet users cite for not
having broadband at home
                                                              % of dial-up +
                                                                non-online     % of all
                                                                      users     adults
Relevance
(not interested in getting online + nothing could get me to
switch + too busy + other unspecified reasons)                    51%          16%
Price
(price must fall + too expensive + no computer)                   18%          6%
Usability
(difficult + waste of time + too old + physically unable)         17%          6%
Availability
                                                                  14%          5%

                                                                                     10
                       A Healthy Broadband Ecosystem Depends on
                                       Innovation and Investment
        Investment and innovation is producing huge benefits for
               Americans and our economy in many forms.


• Verizon is spending $23 billion to build FiOS.

• In 2007 industry invested $60 billion in communications networks; twice
  the government’s annual investment in building the interstate highway
  system and putting a man on the moon – combined.*

• Broadband accounted for $28 billion of GDP in 2006: Of that amount,
  deployment generated approximately $8.3 to $10.6 billion in new GDP.**

• The broadband/IT sectors created nearly half of all new American jobs in
  2008.*
*Source: The Telecom Sector and the Economy: How U.S. Broadband Policies Are Working for America, Jeffrey A. Eisenach, Ph.D., September 2008.
**Source: Information Technology and Information Foundation.


                                                                                                                                                11
                      Information Technology is Creating Jobs
      While overall employment is shrinking, Information Technology
      is continuing to create jobs.

      • The IT sector created more than half of all net new jobs between
        April 2007 and April 2008.
      • Information sector jobs generally, and telecom jobs in particular,
        are among the highest-paying jobs in the economy; average hourly
        earnings in telecom are 42% higher than in manufacturing.




Source: The Telecom Sector and the Economy: How U.S. Broadband Policies Are Working for America, Jeffrey A. Eisenach, Ph.D., September 2008.

                                                                                                                                               12
                                   IT is a Critical Driver of GDP Growth
• In 2007, IT was responsible for nearly one-fifth of overall GDP growth,
  triple the level five years earlier.
• Telecom is the largest segment of the IT sector (about 18%).
     25%




     20%
                                                                                                                     18.18%
                                                                           16.13%
     15%                                         14.17%



     10%                                                                                          11.03%


      5%    6.25%                5.20%


      0%
        2002                   2003                   2004                   2005                   2006                   2007


Source: The Telecom Sector and the Economy: How U.S. Broadband Policies Are Working for America, Jeffrey A. Eisenach, Ph.D., September 2008.

                                                                                                                                               13
                                      Broadband benefits…
• Health Care costs
• Educational opportunities
 (Please check out Thinkfinity.org)
• Global Warming
• National Security
• US Competitiveness
• Democracy




                                                            14
                              What’s In the Pipeline…

Open Development Initiative




                                         4G Wireless




                                                        15
                               Protecting Future Innovation
  In order to ensure that our broadband networks continue to
     advance and foster positive solutions for consumers, the
   United States government must promote more deployment
                and a pro-investment environment.
We must encourage the government to:
• Implement the 2009 American Recovery and Reinvestment Act effectively
  and properly by following these four principles:
    1.   Finish what’s been started ‐ focus on unserved areas
    2.   Rely on state and local expertise to manage broadband stimulus spending;
    3.   Realize that transparency and accountability are key; and
    4.   Prioritize the work.
• Support the FCC’s broadband principles “to ensure that broadband
  networks are widely deployed, open, affordable, and accessible to all
  consumers”;
• Avoid legislation/regulation that would discourage major network
  investments; and
• Promote new policies and incentives to stimulate greater investment.
                                                                                    16

				
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