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SBC, Verizon Chiefs Vow No VoIP Blocking

3/15/2005 9:46 AM Eastern

The leaders of Verizon Communications and SBC Communications Inc. Tuesday told a Senate committee that they have no intention of blocking the traffic of competing voice-over-Internet-protocol service providers.

“We are not going to block anybody’s traffic,” SBC chairman and CEO Edward Whitacre told the Senate Judiciary Committee.

Ivan Seidenberg, chairman and CEO of Verizon, said the company is not blocking and has no incentive to do so because his company's VoIP traffic must flow over networks owned by competitors.

“Just to give you some comfort, we also buy access to [AT&T Corp.’s] and [SBC’s] network to put our Internet traffic over it. So we would have no reason to block anybody else’s traffic when we are putting our own on other people’s networks,” Seidenberg said.

The hearing examined SBC’s proposed $16 billion merger with AT&T and Verizon’s $7 billion deal to acquire MCI Inc.

Three weeks ago, the Federal Communications Commission effectively fined a small phone company -- Madison River Communications LLC -- $15,000 for blocking competing VoIP traffic. Vonage Holdings Corp. -- the No. 1 VoIP provider, with more than 500,000 subscribers -- had publicly complained about such activity by a phone company, but it would not name the company doing it.

Last week, Comcast Corp. chief operating officer Steve Burke said the MSO does not and will not block competing VoIP providers from serving Comcast cable-modem customers.

“I think that would be a terrible business decision,” Burke said.

Asked by Sen. Herb Kohl (D-Wis.) whether their companies would accept a merger condition barring VoIP blocking, Seidenberg and Whitacre voiced opposition.

“I don’t like conditions. I guess at this point in the process, we need to see the whole picture,” Seidenberg said. “As a matter of practice, we are not doing anything that would suggest that we’re blocking anybody’s traffic.”

On a related topic, Kohl also asked whether the companies would provide “naked” digital-subscriber-line service, meaning that they would not require high-speed-data subscribers to purchase local phone service in a bundle.

“In the future, we are in the process of working through the mechanics of offering a DSL line without a phone number,” Seidenberg said.

Whitacre said SBC would provide naked DSL, but only if it were profitable.

“Would SBC do it? Of course SBC would do it. But SBC is not going to do it under the price of what it costs us to provide it,” he added.

Again, both Seidenberg and Whitacre said they opposed a merger condition requiring the sale of naked DSL.

 

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