Copyright 2005 Knight Ridder/Tribune Business News

Copyright 2005 Newsday


September 13, 2005, Tuesday

By Harry Berkowitz

From Lexis Nexis

Verizon Communications appears intent on undercutting cable TV competitors for at least some customers as it prepares to roll out its own video service.

But how big a break customers can get may depend on what kinds of premium channels, packages and services they want, including whether they get a bundle that also includes discounted phone and Internet service.

Verizon's first rate card for its new FiOS TV service has surfaced in Keller, Texas, where the giant phone company is conducting its first trials and where it plans to launch regular service by the end of this year.

A standard, or expanded basic, package of more than 180 digital channels costs $39.95 per month, according to the rate card. A version called La Conexion which features Spanish-language channels costs $32.95. A set-top box adds $3.95 per month for standard-definition and $9.95 per month for high-definition programming.

The expanded basic rate is about $20 less than the comparable digital package from the local cable TV company, Comcast, according to Craig Moffett, a media analyst at investment firm Sanford C. Bernstein. It is also slightly less than what EchoStar Communications charges for satellite TV service when including local broadcast channels.

"Verizon intends to position its video service very competitively versus current cable and satellite offerings," Moffett said in a research note.

FiOS rates probably will be higher in the metropolitan area, where there are more broadcast basic channels and higher operating expenses. In the area, Verizon has begun negotiating with some municipalities on Long Island and in Westchester for franchise licenses to compete with Cablevision. Some of those municipalities have said they expect the new competition to stabilize or lower cable prices.

Cablevision charges about $55 per month for its comparable Family Cable package of digital service plus $4.95 per month for a set-top box, whether it is standard or high-definition TV.

In New York City, Time Warner Cable charges about $46 per month for digital service in an expanded basic package, plus $6.75 for a set-top box, whether standard or HDTV.

The Verizon package includes a wide array of channels, some of which have agreed to be part of the Keller trial, even though they have not completed negotiations with Verizon. A Verizon spokeswoman declined to comment on the rate card.

To add 14 HBO channels, Verizon is charging $14.95 per month. In comparison, Cablevision charges $ 11.95 for HBO channels, and Time Warner charges $7.95 for HBO or other premium movie channels.

For a package of 26 movie channels including various versions of Showtime, Starz, Encore and The Movie Channel, Verizon charges $11.95.

It charges $5.95 for a package of 15 sports channels. Cablevision charges $4.95 for a package of 10. Time Warner charges $3.95 for a package of six.

For its iO Silver digital package, which includes expanded basic plus extra movie and sports channels, Cablevision charges about $67.

For recently released on-demand movies, Verizon charges $3.95 each, the same as Time Warner. Cablevision charges $4.95.