NYC Seeks City-Wide CATV Franchisee - Verizon believes it is the right operator

On April 11, the Department of Information Technology and Telecommunications (DoITT) announced the issuance of a formal solicitation seeking cable television franchise proposals from any company ready, willing and able to offer service to every household in New York City, in competition with existing providers.

“Millions of New Yorkers rely on cable television as an important source of information, news, and entertainment, and today we’ve taken a significant step toward opening this market to potential new providers,” said Commissioner Cosgrave. “It is our firm belief that – as in any business – direct competition between cable providers will result in greater choice, lower prices and enhanced customer service for cable television subscribers. We look forward to receiving and reviewing these new proposals.”

The solicitation issued is non-exclusive and open-ended, so that any company interested in and capable of offering service to all City households will be eligible for consideration for a franchise over the months and years to come. While in recent months, DoITT has been in discussions with Verizon regarding the terms under which Verizon would build and offer competitive cable television service to every home in New York City via its advanced FiOS TV system, any grant of a franchise pursuant to this solicitation will not preclude the grant of additional franchises to other companies to offer service simultaneously or in the future.

Any and every franchise agreement arising out of today’s solicitation will include significant customer service requirements and be subject to approval by the City’s Franchise and Concession Review Committee (FCRC) after the public has an opportunity to review the proposed agreement(s). An open public hearing will be part of the public review process for every franchise agreement to be considered by the FCRC.

The existing City-administered cable television franchises with Cablevision and Time Warner were last renewed in 1998 and will expire this fall. Through DoITT, the City of New York is now also beginning the renewal process for these contracts. As part of this process, DoITT hosted public hearings in each borough this January and February, and accepted written comments submitted through March 31, to gather input about cable television service issues and concerns. This feedback will provide DoITT valuable insight as it proceeds to negotiate renewal agreements in the coming months.

As New York City’s technology agency, DoITT administers the City’s telecommunications franchises, including those for cable television, high capacity fiber, public pay telephones, and mobile telecommunications equipment installed in City streets.

Verizon's Position

On Tuesday, April 15, Verizon announced that it has filed with the New York City Department of Information Technology and Telecommunications (DoITT) its application and plan under which, for the first time, TV service will be offered by a single provider throughout the City of New York. Verizon's revolutionary FiOS TV service will be delivered over the most advanced fiber-optic network.

"Our investment in the City is historic, which is reflected in the citywide nature of our plan," Azare said. "When our fiber deployment project is completed it will reach to each and every borough, neighborhood, boulevard, avenue and street, without regard to the demographics of a particular area. More importantly, City residents will be able to take advantage of the power of fiber optics delivered straight to their doors."

This 12-year proposed agreement is unprecedented in scope and is designed to serve the unique needs of approximately 3.1 million households that will have access to FiOS TV, including households in multiple dwelling units.

In keeping with the citywide scope of the Verizon plan, key aspects include:

-- Verizon building its state-of-the-art fiber-optic network throughout the entire City by midyear 2014. This will make Verizon the largest provider of television service in New York City, and the only one serving the entire City;

-- Making available FiOS TV service to requesting customers in all five boroughs within a six-year time frame as Verizon's wire centers are upgraded to being video-capable. If Verizon's proposal is approved, hundreds of thousands of New York City residents will have access to FiOS TV this year;
 

-- FiOS TV will include an all digital channel line-up of more than 400 channels and 150 HD channels by year-end, and a growing library of more than 10,000 video-on-demand selections;
 

-- Verizon will provide a fiber-optic institutional network (known as an INET), primarily to support the City's public safety needs;
 

-- Verizon agrees to pay franchise fees equivalent to five percent of gross revenues on cable TV service, as do other cable TV operators in the City;
 

-- Verizon has agreed to appropriate customer service provisions.

Verizon has an aggressive plan to provide FiOS service to requesting customers in multiple dwelling units (MDUs). Already, Verizon has installed FiOS in hundreds of MDU buildings throughout the City. The company works with property owners and landlords to gain access to the buildings, and then creates a fiber network to serve tenants in the buildings who request the FiOS services.

 

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