Seidenberg, Ivan G. 1946–

International Directory of Business Biographies, (2005) by Tim Halpern

PLAYING OFFENSE

As Verizon continued to lose traditional customers, Seiden-berg remained focused on transforming the industry. In 2003 Verizon became the first Baby Bell to offer the now ubiquitous flat-rate plans that offered unlimited long-distance and local calls. Not long after, every other Baby Bell introduced its own plan. Said Seidenberg, "When you're the market leader, part of your responsibility is to reinvent the market" ( BusinessWeek , August 4, 2003).

BETTING ON THE FUTURE OF BROADBAND

TAKING ON CABLE

In 2004 Seidenberg backed up his vision of the future by announcing a multibillion-dollar initiative to bring high-speed fiber lines into millions of customers' homes. Those lines could one day carry television programs, allowing Verizon to compete with cable companies. At the January 2004 Consumer Electronics Show, Seidenberg declared that his investment would be the start of the "all-broadband, all-the-time lifestyle" ( Fortune , May 31, 2004).

Unlike other telecoms that were bringing "fiber to the curb," Seidenberg planned to go one step further by bringing it to the house. It was a much costlier strategy but one that promised networks with higher speed. Seidenberg relied on a crucial Verizon asset to fund his grand scheme: its tremendous cash flow. By 2003 the company's operations were generating about $22 billion annually in cash—50 percent more than SBC, twice as much as Bell South, and triple AT&T's number. In fact, Seidenberg planned to pay for his fiber plan without increasing his capital budget. Seidenberg said that "funding is not an issue" ( BusinessWeek , August 4, 2003). Another benefit of "fiber to the curb" was of a regulatory nature. In 2003 the Federal Communications Commission ruled that it would not force Baby Bells to give access to competitors on fiber networks that ran into the home—the same might not hold true for networks that stopped at the curb.

PIONEER OR POKER PLAYER?

In the first stage of his initiative, Seidenberg planned to bring fiber to one million homes by the end of 2004, an ambitious project that would cost $1 billion—more than 8 percent of the company's total capital expenditure budget for that year. He hoped to have another two million homes wired by 2005. Some analysts calculated that outfitting the homes of Verizon's other 32 million customers with fiber would cost $40 billion. Some called Seidenberg's plan nothing more than a bluff. Said Susan Kalla, a telecom analyst at Friedman Billings Ramsey, "He's not going to do it. The numbers, they just don't make sense" ( Fortune , May 31, 2004).

Seidenberg contended that he was planning to move slowly at first, to test his strategy. As for investors' concerns, he was not really worried: "Most investors only understand that which has already been done. They never really like things that haven't been done before. That's why Christopher Columbus had so much trouble getting financing" ( Fortune , May 31, 2004). Verizon also made a push into the corporate market, building a national network that could accommodate the vast numbers of bits and bytes on which corporations rely to communicate with their disparate offices. The company expected the new services to generate $250 million per year; it hoped to increase that figure to $1 billion by 2007.