Virginians Will Benefit From New Cable Choice Legislation

Consumers Will Have More Competition, Choice; Verizon to Focus on FiOS TV Deployment in State Using Fiber Network All the Way to Customers

March 10, 2006, RICHMOND, Va. - Landmark legislation signed into law today by Gov. Timothy M. Kaine promises to bring competition and choice for cable television services to more Virginians more quickly.

The new law also will give new cable competitors like Verizon a more certain environment in which to make investment decisions about where and when to build advanced networks that can deliver video services.

Last week, compromise cable choice legislation was passed by an overwhelming majority in both chambers of the Virginia General Assembly. The legislation becomes effective July 1. It provides a streamlined process for Verizon and other telecommunications companies that want to offer consumers an alternative to cable incumbents’ service. Competitors to cable incumbents can begin selling services 75 days after opening negotiations with a local franchising authority.

“This legislation will produce tangible benefits for Virginians, who will have more choices for their video services,” said Robert W. Woltz Jr., president of Verizon Virginia. "Studies and actual customer experience prove that consumers win when landline companies compete for video services in the same market.

“Verizon and other companies can invest in infrastructure like our all-fiber network with the knowledge that we’ll be able to turn that investment into real products and services for consumers more quickly,” said Woltz. “We anticipate that our investment moving forward will reflect Virginia’s progressive, competitive environment.”

Verizon is the only company to offer - on a large scale - all-digital, fiber-optic communications all the way to the customer. The company will provide more details on its fiber network and FiOS TV plans in coming weeks.

Verizon’s all-fiber network - over which the company is delivering voice, high-speed FiOS Internet Service and FiOS TV - is currently under construction in more than half the states where the company offers landline communications services. Since Verizon began building its fiber network in Virginia, the company has placed more than 17.3 million feet of fiber optics and created more than 600 new full-time positions to build and support the network and FiOS services in the state.

The network brings the power and capacity of fiber optics directly into people’s homes and has industry-leading quality and reliability. Fiber delivers amazingly sharp pictures and sound, and has the capacity to transmit a wide array of high-definition programming that is so clear and intense it seems to leap from the TV screen.

The network also features blazing fast Internet access, with downstream (download) speeds of up to 5, 15 and 30 Mbps (megabits per second) and upstream (upload) speeds of up to 5 Mbps,* as well as high-quality voice services.

Number of Video Franchises Mounting

In states where streamlined video-franchising processes do not exist, it typically takes Verizon six to 18 months - sometimes longer - to secure local cable franchise agreements, slowing the company’s ability to compete against incumbent cable operators.

Under the Virginia legislation, Verizon or another new entrant can obtain a local franchise through direct negotiation with a locality, as it does today, or through an “ordinance franchise.” A new entrant that chooses the ordinance franchise would negotiate for at least 45 days before filing a certification that it intends to provide video services under an ordinance franchise. Once the new entrant files its certification, it may begin to offer video services in that locality 30 days from the filing date. In this filing, the new entrant commits to serving an entire initial service area - identified by the company - within three years of the video franchise effective date, and serving 65 percent of the new entrant’s telephone service area in the locality within seven years.

The locality has 120 days from the filing date to put into place the appropriate local ordinances governing franchise and other fees, public/education/government (PEG) channels and customer service standards.

“This new law represents a compromise between cable incumbents and new entrants, and it satisfies Virginia law, which guarantees cities and towns the right to grant franchises involving the use of rights of way,” said Woltz. “No party got all it wanted, but in the end Virginians will get more cable competition and choice more quickly.”

Verizon has obtained video franchises covering more than 1.3 million households in California, Florida, Maryland, Massachusetts, New York, Pennsylvania, Texas and Virginia.

Verizon currently offers FiOS TV in Herndon, Reston and surrounding parts of Fairfax County, Va., as well as communities in California, Florida, Massachusetts, New York and Texas.

“Members of the General Assembly should be thanked for their foresight and hard work in passing this legislation,” said Woltz. “We particularly commend Dels. Terry Kilgore and Morgan Griffith and Sens. Walter Stosch and Kenneth Stolle, who - along with Mark Rubin, senior advisor to Gov. Kaine - forged the compromise that will bring quicker consumer choice for cable services in the state.”

* Actual (throughput) speeds will vary.

Verizon Communications Inc. (NYSE:VZ), a Dow 30 company, is a leader in delivering broadband and other communication innovations to wireline and wireless customers. Verizon operates America’s most reliable wireless network, serving 51.3 million customers nationwide; one of the most expansive wholly owned global IP networks; and one of the nation’s premier wireline networks, serving home, business and wholesale customers. Based in New York, Verizon has a diverse workforce of approximately 250,000 and generates annual consolidated operating revenues of approximately $90 billion. For more information, visit www.verizon.com.

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Lee Gierczynski

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Verizon Communications Inc.

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