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Verizon to offer TV service

By David Freedlander | dfreedlander@am-ny.com

7:08 PM EDT, April 29, 2008

A decades-old stranglehold by cable behemoths on New York City households is coming to an end as city officials announced yesterday an agreement with Verizon to offer television service throughout the five boroughs.

City officials and media specialists predicted that the agreement will lead to lower prices, faster connections and better service throughout the city. Verizon service could begin in parts of the city as early as this summer.

"As the financial capital of the world and home to the savviest consumers, New Yorkers must have a choice among world-class cable-television services," said deputy mayor Robert C. Lieber at a news conference announcing the Verizon deal

Most New Yorkers can now only choose Time Warner, while those in the Bronx and eastern Brooklyn can only subscribe to Cablevision. Those companies have for years maintained a tight grip on cable service, using a combination of political muscle and technical know-how to keep competition at bay, industry observers say.

"This is a major improvement to media life in New York City," said Siva Vaidhyanathan, a professor of media studies at the University of Virginia Law School. "New Yorkers are blessed every day to have their choice of newspapers, and now they are going to have their choice of television providers. Cable companies have been fat and lazy for a long time, and New Yorkers have been the victim of this."

According the agreement with the city, Verizon must offer fiber-optic cable services to all city households, and has promised to reach 30 percent of those homes by the end of this year, and all by 2014. As part of the deal, Verizon has to provide the city with five percent of its revenue from the service, and will make a $10 million grant to NYC TV, New York's public-service channel.

Verizon officials said they have already begun to build the network over existing phone copper lines, in what officials are calling the largest cable-television franchise project in the city's history.

The expansion will wire the city for Verizon's FIOS TV service, which promises faster access and sharper pictures compared with existing services.

"The fiber gives you the capacity for the speed for whatever Google is planning to do five years from now or the kid down the block plans nine years from now," said John Bonomo, a Verizon spokesman. "We believe that when there is competition the consumer benefits."

The move into cable marks a further transformation for Verizon, which traces its origins to the old New York Telephone Co. As landlines go the way of dial-up, Bonomo said the company is aware of the need to adapt.

The stage for competition was set by the Federal Communications Commission in 1996, but it has taken 12 years for any company to reach an agreement with the city.

"Historically, it's been very difficult to support two competing companies head to head and still ensure that you can provide good service," said Bruce Regal, a lawyer at the New York City Law Department. "Now, high speed, open cable can be provided along the same infrastructure and you can see the possibility of two companies side by side."

The agreement still must pass the city's Franchise and Concession Review Committee, and then will likely go to the state's Public Service Commission this summer.

However, both sides agreed to add increased community-access programming and greater customer protections, such as 24/7 customer support, and were hopeful for passage.

For its part, Time Warner, newly challenged as the king of city cable, said it welcomed the competition.

"It is our responsibility to work with all communities in order to provide the best in customer options and service," said Novet Harriet, a company spokeswoman. "We expect to continue to offer the finest service to all residents in our service area."

*** No longer playing monopoly

The announcement that Verizon is moving in on the city's cable monopolies spells good news for consumers, according to city officials and media analysts.

Among the benefits:

Better prices: Look for the two companies to constantly try to undercut one another in the competition for customers

More deals: The cable providers are likely to provide an even better match of services across TV, Internet, and phone platforms in order to attract customers.

Better customer service: The agreement includes more customer service protections, including guaranteed quicker complaint resolutions and 24/7 customer support.

Speed: In order to compete with Verizon's fast FIOS TV service, look for Time Warner and Cablevision to upgrade their networks pronto.