Local Cable Franchise Politics Obstructs Verizon FIOS TV in Many Areas
A page one report in today's The Wall Street Journal indicates that Verizon is having difficulty launching FIOS-based television services in many parts of the country. Verizon plans to invest some $20 billion on a large-scale fiber-to-the-home deployment project, but is being asked for costly concessions on a town-by-town basis in exchange for a cable television franchise. According to the article:
Budget-strapped local officials, who have the final say over granting cable-TV-service franchises, are greeting the phone giant with expensive and detailed demands. In New York state, Verizon faces requests for seed money for wildflowers and a video hookup for Christmas celebrations. Arlington County, Va., wants fiber strung to all its traffic lights so it can remotely monitor traffic flow. Holliston, Mass., is seeking free television for every house of worship and a 10% video discount for all senior citizens. Others want high-speed Internet for sewage facilities and junk yards, flower baskets for light poles, cameras mounted on stop lights and Internet connections for poor elementary students.
FIOS is meant to compete with services like Comcast Digital Cable, Time Warner Digital Cable, and IO Digital Cable from Cablevision. These are premium, broadband-based television services with an emphasis on video on demand and bundled Internet access.
The providers have attached high monthly fees to these services in towns where they have monopolies. Beyond switching to DirecTV or The Dish Network, which can't provide broadband Internet service because of their satellite delivery method.
Walt Mossberg pointed out in September that FIOS has already changed the competitive landscape in high-speed Internet access in a limited number of areas of the Northeast. These are places where Verizon has decided to deploy FIOS in advance of permission to offer television services.
America needs a competitive digital television marketplace. More than one broadband solution in each town would be ideal. If the issues with the cable franchising process are that it's too political and too dependent on the whims of local franchise boards, maybe the solutions are to regionalize these boards and bring them into the 21st century by creating new rules that are designed for a competitive market rather than a monopoly. Deployment of a fiber-to-home network is very expensive, so regulatory barriers should be lowered to Verizon for a period of time.
If incumbent cable franchisees complain, they should be offered similar terms for similar capital investments. If upgrades have already been made, the requirements of their franchises should be temporarily relaxed in the same fashion offered to Verizon. [ Subscription required to view many articles from the Wall Street Journal ]
Technorati Tags: FIOS, Comcast Digital Cable, Time Warner Digital Cable, IO Digital Cable, DirecTV, Dish Network
Comments
this is one of the most important battles going on today in the Video Subscription market today. If competiton is going to come to the cable marketplace anytime soon, outdated cable franchising laws need to be reformed.
In New Jersey, that battle is happening right now. Considerable forces have been alligned in the battle. the Forces for competition have lined up significant support from municipal officals, but the cable companies are beginning to pour in dollars into the State.
There is a colilition of consumer groups, community organizations and individuals that have now engaged in the battle on the side of competition. They are waging a campaign for cable choice. If you live in NJ, watch for the ballot boxes that will be placed throughout the State.
Now it will be up to the legislature in December to act. People should watch New Jersey.
Posted by: Mark | October 28, 2005 11:16 AM
This is a very important battle. There is an organization called New Jersey Consumers for Cable Choice out there who are canvassing train stations. I signed one of their petitions the other day. The lady told me that when they let verizon come in in Texas, cable rates were cut in half. In Jersey we pay a ton of money for our cable. I'm ready for my rates to be cut in half.
Randy
Trenton
Posted by: Randy | October 28, 2005 12:05 PM
The cable companies are playing all their cards in an effort to keep their their captive audience paying premium rates. Obviously this is being done by the established cable companies in order to keep the artifically high user rates for themselves. They are encouraging the local municipalities to use the new entrents as cash cows thus creating the impossibly high dictates which means they can continue with exorbitant rates.
Posted by: Jerry M | October 29, 2005 6:55 PM
The cable companies deserve to have restless nights! Verizon has been fair with them and other companies, Verizon shares their lines without fear, Verizon shall not fear others, good customer service, and quality speaks for itself! If you weren't robbing your customer, you wouldn't be scared! Its a shame when you miss use your power, because you knew customers had no choice, you did what ever, now look if you treated your customers right then you wouldn't be having sleepless nights! I want a choice, I can't wait, and I won't look back once! Cable is too high, it not worth what is cost!
Posted by: Michele Huntley | October 30, 2005 10:33 PM
I jumped from Cable TV & Internet service to Satellite TV and DSL internet because of the strangle hold Cable has on the community. Choice brings better service and lower rates to the community it serves. Bringing Fiber to the home allows us to choose our provider; this will insure competition resulting in lower rates and better service to the consumer.
Posted by: Mike Girasoli | October 31, 2005 11:23 AM