Panel Asks and Answers: “Why is New Jersey good for Telecom?”

New Jersey’s proximity to New York City’s financial and technology centers, the state’s colleges and universities known for their engineering and technology programs, and its highly skilled labor force are among the reasons for the resurgence of New Jersey’s telecommunications sector.

 That was the conclusion of industry experts participating in a panel discussion on Sept. 19 entitled, “Why is New Jersey Good for Telecom?” The talk, hosted by the New Jersey Tech Council, was held at the offices of Juniper Networks in Bridgewater and sponsored by the Piscataway campus of data center provider Digital Reality. 

The panel’s speakers included Assemblyman Wayne P. DeAngelo (D-14thDistrict); Philip Lamoureux, architect specialist for mobility at Juniper Networks; Gina LaPlaca, director of state government affairs at Verizon (Basking Ridge); Patrick Morgan, enterprise account executive at Lightower Fiber Networks (New York City); Gil Santaliz, CEO of New Jersey Fiber Exchange (Wall Township); and Surinder Anand, vice president of product management at Kirusa (New Providence).

Telecommunications has indeed been good to New Jersey and, for that matter, to everyone else who benefits from this business. According to industry reports, the telecommunications service market, including fixed networks and mobile services, was valued at an estimated $1.5 trillion in 2015 and is predicted to grow to nearly $1.7 trillion by 2019.

The optimistic outlook for the state’s telecom industry stands in stark contrast to the sector’s misfortunes earlier this century, when telecom companies in New Jersey (and elsewhere) were reeling from a sharp downturn in business, leaving thousands of the state’s telecom employees without jobs or underemployed.

New Jersey’s telecoms view the state as a key location for their operations due to its reputation as major hub for world trade and its proximity to New York, one of world’s top financial capitals. And as data use continues its strong growth trajectory, more data centers will have to be built in the state to handle the increasing demand. “Over the past four years, data usage has gone through the roof,” Lamoureux noted.

Telecom firms have also reaped the benefits of the state’s highly trained technology workers, including those from local educational programs focused on information technology and related fields. “New Jersey is a place of deep talent in telecom that should not be lost on any one,” said Lamoureux.

Anand pointed out that New Jersey has the second-highest fiber optic penetration on the East Coast, and is the country’s fourth-largest location for data centers, providing the connectivity that telecoms require in order to grow their operations and serve their corporate customers. But, Anand asked, “what do we do to bring in more business?” 

The panel’s speakers also pointed out that New Jersey’s reputation as being at the forefront of the telecommunications industry — with venerable brands such as Bell Labs, Verizon and AT&T— is another reason why telecoms should continue to do business in the Garden State.

New Jersey’s ability to provide financial assistance to draw and keep telecoms here has been another important factor in making the state attractive to this industry. According to LaPlaca, Verizon has worked with the state to receive tax subsidies and other financial incentives to make New Jersey its home. Verizon currently has an estimated 4,000 employees and 16,000 retirees across the state.

Verizon is also using the state as a testing ground for new technologies. LaPlaca noted that the company has been testing its 5G wireless technology, which is reportedly 10 times as fast as the 4G, in neighboring Bernardsville.   

However, the state’s laws and regulations affecting the industry have made it difficult for some telecom providers to continue to post significant growth in an increasingly competitive environment.

LaPlaca said that because Verizon is still perceived as just a telephone company, it must strictly adhere to state regulations governing that business. As a result, she said, it has put the company at a competitive disadvantage when attempting to sell its other services. Verizon is “reassessing” the state’s laws and regulations governing telecoms, which need to be changed to “inspire more job growth.”

New Jersey also could do a better job in attracting more data centers. The state continues to trail behind other locales, such as Virginia Beach, Va., which has seen a boom in data-center activity in recent times. Earlier this year, a Dutch company announced plans to build $1.5 billion to $2 billion hub in Virginia Beach to draw companies seeking to establish high-capacity connectivity between the U.S. and Europe. A year earlier, tech giants Microsoft and Facebook said that they would run a 4,000-mile cable under the Atlantic Ocean to connect a city in Spain with centers in Virgina Beach.

“As a state, we compete with Virginia Beach,” Santaliz noted. “We need to provide tax incentives to build more data centers here like they do in Virginia.”

DeAngelo, who serves on the New Jersey Assembly’s telecommunications and utilities committee, said that while New Jersey has a strong energy infrastructure that is critical for the telecom industry’s growth, he agreed that the state should increase its efforts to create a more favorable environment for this industry. 

DeAngelo blamed the challenges facing the state’s telecoms and other technology companies on the “ugliness of politics,” referring to obstacles put in the way of producing a more business-friendly tax structure. DeAngelo said that it’s highly unlikely that Governor Chris Christie will seek legislative changes for telecoms, given that the governor is nearing the end of his term. DeAngelo vowed that, when the new administration takes office, “we will hold their feet to the fire” to ensure that they’ll find ways to make it easier for telecoms to do business in the state. 

The assemblyman told the audience members that their’ participation, and that of their colleagues, is also required to change the state’s current regulatory landscape for telecommunications. “You need to come together as a group,” he said. “You have to push the agenda.”