NYC in historic video franchise negotiations - what about the public interest?

by Juan Gonzalez, New York Daily News

City officials spent�Tuesday in secret talks with phone giant Verizon on a new franchise deal that could finally offer New Yorkers real competition in cable TV service.

Talks on the new 15-year Verizon franchise, which have gone on for months, were supposed to be wrapped up before Christmas, but they apparently stalled. Verizon and City Hall refuse to comment on the negotiations or the reason for the delay.

But make no mistake - this Verizon deal is huge.

Not only is it worth billions of dollars, it will set the pattern for the city's renewal of the existing Time Warner and Cablevision franchises that expire later this year.

Most of us can't wait for an end to those two monopolies.

The big stumbling block between Verizon and the city, cable industry sources say, is the phone giant's desire to offer its service, known as FiOS, in the city's wealthiest neighborhoods first.

Public housing projects and poor neighborhoods would just have to wait.

"We have to make sure Verizon doesn't cherry-pick," said City Councilwoman Gale Brewer (D-Manhattan).

Decades ago, "the city didn't let the cable companies build on the upper West Side unless they built in Harlem at the same time," Brewer said. Back then, city negotiators set strict timetables for providing service in each neighborhood.

As head of the Council's Committee on Technology in Government, Brewer supports a "firm stand" by the Bloomberg administration on the issue of "universal buildout."

Verizon spokeswoman Heather Wilner declined to talk about Verizon's position, except to say: "We've been laying fiber and building our network in all five boroughs, and are really excited about bringing TV choice and competition."

A major technical problem with Verizon's system is the glass fiber lines that carry its video and data don't bend easily around sharp corners like copper wires.

That means bringing fiber into high-rise buildings can be more expensive. There is also a risk of lower transmission speed if strands of fiber are damaged.

Wilner said the company remedied the problem by ordering a new type of bendable fiber developed by Corning.

While franchise talks drag on, Verizon has been feverishly reaching deals to bring FiOS to scores of towns around the state.

Just before Christmas, for example, Verizon inked an agreement with 15 villages on Long Island's North Shore.

Those wealthy North Shore towns, which include Great Neck, negotiated such a terrific deal for themselves that Mayor Bloomberg's aides would be crazy to settle for anything less.

For example, New York City gets a 5% license fee from all gross revenues from the Time Warner and Cablevision contracts.

In addition, the public access channels in each borough get less than 50 cents per month, per subscriber to pay for producing all their community-based programs.

Great Neck negotiated what amounts to 6% of gross revenues, with about half of that set aside for public access channels.

In addition, it is requiring Verizon to wire every village hall, school district, library and district park in the franchise area to allow for the broadcasting of community and school meetings and other events from those places.

Imagine using just a few of those hundreds of cable channels to serve the people of a community instead of just to sell them more consumer products.

That's the kind of improved use of cable technology Manhattan Borough President Scott Stringer has been advocating fiercely with City Hall.

Whether it's Verizon, Time Warner or Cablevision, they all need public streets and rights-of-way to run their cables.

The only time the public can get something back for those valuable rights is when the deal is being done.

Others write history, I give you news: The deal is going down now.

article originally published at http://www.nydailynews.com/money/2008/01/16/2008-01-16_verizon_deal_could_finall....

The media's job is to interest the public in the public interest. -John Dewey