AT&T asks for split of Verizon New Jersey

(Telephony) AT&T filed a formal petition asking state regulators to split Verizon New Jersey into separate retail and wholesale units as a means of spurring competition in the state.

In a statement, J. Michael Schweder, president of AT&T-New Jersey, indicated the split is needed because the existing regulatory framework cannot overturn Verizon’s “stonewalling and anticompetitive actions.”

He specifically noted a conflict of interest concerning Verizon’s position as the operator of the local network that virtually all carriers rely upon to provide retail local exchange services, and its status as the dominant competitor in the market.

The petition asks for the establishment of a Verizon wholesale company to sell network services to Verizon’s retail company on the same terms extended to other retail providers.

“Competition will happen only when competitors have equal opportunity to compete,” Schweder said. “Today, Verizon can favor itself at the expense of competition. The plan we’re proposing will at least begin to curb that incentive.”

According to Ed Young, Verizon’s senior vice president for federal government relations, the AT&T plan is a desperate attempt to delay Verizon’s entry into the New Jersey long-distance market.

“Every regulatory body that has looked at a structural separation solution has found that it just adds additional costs that are borne by consumers,” Young said. “It doesn’t provide additional regulatory security. AT&T’s proposal is really just a solution looking for a problem.”

Verizon estimates a structural separation would cost New Jersey residents and business $1 billion in the first year and $300 million in each succeeding year, because of the creation of duplicate operating systems, the division of employees between the retail and wholesale entities, and the creation of new business procedures.