Verizon turns on FiOS TV;Company plugs into the cable TV business with demands for easy entry to local markets
Copyright 2005 Newsday, Inc.Newsday (New York)September 22, 2005 Thursday NASSAU AND SUFFOLK EDITIONBy Mark Harrington, Staff WriterFrom Lexis Nexis
Despite "bricks and firecrackers" thrown at it by cable companies nationwide, Verizon Communications Inc. is stepping into the cable television market today with a video service called FiOS.
Initially available in Keller, Texas, the service could be available in Massapequa Park soon, depending on the outcome of a franchise license hearing next week.
In Huntington yesterday, a Verizon official called on business leaders to advocate a "streamlining" of the video franchising process.
In a speech before the Suffolk Nassau Chamber of Commerce, Verizon chief executive Ivan Seidenberg pointed to franchise rules that "make no sense" in pushing for reform.
"We're making progress in getting the franchises we need," he said, "but we think this could go faster, and the benefits of video competition could come quicker, if we could reform the whole franchise process." He pointed to a quicker process in Texas as an example.
On Long Island, by comparison, Verizon is near to finalizing a single franchise agreement with Massapequa Park. "We don't want to spend two years fighting through hearings," he said. Texas recently passed a law allowing Verizon to bypass local communities in gaining cable franchise rights.
In an interview, Seidenberg noted the cable industry is "trying to slow the train down here." He accused them of "throwing bricks and firecrackers all over the place," to block its TV ambitions. "They're using a lot of arguments we've already addressed," he said. But "when it's all over, we'll be around."
Despite a recent report saying Verizon lacked several key deals, Verizon yesterday said it finalized agreements with Disney and Fox Networks, among others. Said Seidenberg of once-pending deals: "They're all done. Everything's done."
While noting that in some cases Verizon will pay more for content than some cable companies, the bulk is bought on the same level, and some cheaper. Key to remember, Seidenberg said, is that content companies understand the importance of Verizon's vast wireless network as they begin to ponder delivery of video to cell phones. "If they want to put their content on wireless, they have to talk to us," he said.
For its part, Verizon "doesn't want to spend resources" on content development, Seidenberg said. Rather, it wants to be the venue for distribution and bundling of services over its broadband network. From that standpoint, he sees ventures like that announced yesterday by Charles Wang and Charles Dolan to launch an Internet-protocol TV network serving the Chinese market as benefiting from Verizon's efforts. "They all need a network," he said. "You can't get into IPTV without a network."
Asked about recent reports that the U.S. Department of Justice is expected to clear Verizon's proposed purchase of MCI Corp., Seidenberg said, "We think there is good momentum for Justice and the FCC to accomplish their reviews of the merger in the next 30 days or so." He pointed to published statements from officials that suggest the merger seems to "pass all necessary tests on the merits."
On the topic of consolidation in the telecom industry, particularly in wireless, Seidenberg said, "It's like life. It's never finished. It just changes its forms. I think consolidation is part of being healthy in an industry."