Every remaining Verizon state will be in queue for Sec. 271 actio...

Orlando. “We are running this like a train,” he told institutional investors at conference. Within next 2 weeks, more filings will be made with state regulators in mid- Atlantic states such as Md. and Va., he said. Seidenberg said long distance entry was important part of company’s strategy to expand into new areas to offset revenue losses in some older businesses such as voice. Once company gets through Sec. 271 process, it will focus on providing domestic and international service to wide range of business and govt. customers, he said. Verizon has “good business model” but has been unable to produce good bottom line, with net income around 3%, leading to flat stock prices, he said. He attributed low return to factors such as spending in growth areas, which he said he “feels good about” and regulatory cost drains, which he said have hurt. In last 3 years, Verizon has “given back to regulators” $3 billion, mainly in rate reductions, Seidenberg said. Efforts to improve bottom line will lead to more “head count reductions,” he said. He said Verizon’s growing data and international business would offset revenue drain caused by reduction in number of access lines served by company and effect of consumers’ dropping their 2nd phone lines as they moved to other technologies. Asked in question period whether Verizon was interested in buying long distance company such as AT&T or WorldCom or engaging in horizontal merger with smaller ILEC such as Qwest, Seidenberg basically said no. He said Verizon had “little need to undertake any transaction like that” because “the hidden costs would be enormous” when taking into consideration “execution risk, market uncertainty and regulatory risk.” On idea of horizontal merger, Seidenberg said such strategy was good for company 3 years ago when scale was needed, but now benefits weren’t enough to outweigh risks. Asked what he would do if SBC bought another property such as AT&T Wireless or BellSouth, Seidenberg said: “I don’t feel we need to be baited to do something that may sound good but not have underlying merit.” Maybe in future, he'll change his mind, he said, “but right now I don’t see anything worth all the risks required.”