Yesterday, the city of New York announced that it had reached an agreement that will allow Verizon to offer its video service in all five boroughs of the city.

Currently, Cablevision serves the Bronx and two-thirds of Brooklyn, while Time Warner Cable (TWC) has the rest of Brooklyn, Queens, Manhattan and Staten Island. Verizon fired a shot across the bows of both operators when it announced earlier this month that it had applied for a city-wide franchise agreement (story here).

Deputy Mayor for Economic Development Robert Lieber and Department of Information Technology and Telecommunications (DoITT) Commissioner Paul Cosgrave jointly announced the agreement with Verizon.

The proposed agreement still needs to be approved by the city’s Franchise and Concession Review Committee (FCRC), which is scheduled to hold a public hearing on May 20.

Terms of the agreement included customer service protections and increased channel capacity, as well as funding for all of the public, educational and governmental (PEG) channels. The announcement took place at the Downtown Brooklyn studios of NYC TV, which will receive a $10 million capital grant as part of the agreement.

Verizon also agreed to pay the city a franchise fee of 5 percent of the revenues generated by the video services, which is the maximum percentage allowed by federal law.

Under the agreement, Verizon is slated to offer its fiber optic-based service to 30 percent of NYC households this year, 50 percent in 2010 and all of the homes by 2012.

Verizon has also agreed to:

  • Nearly double the number of  PEG channels currently available to 17;
  • Provide a $10 million grant to NYC TV and increased funding to the community access organizations located in each of the five boroughs;
  • Enhance the City’s internal telecommunications systems through direct infrastructure improvements to the fiber network, enabling it to handle public safety grade communications; and,
  • Provide a $4 million Technology Education and Municipal Facilities grant to expand public access to technology.

Verizon began building its fiber network in the city in late 2004, and subscribers are using its FiOS Internet services in some areas of New York City.

TWC and Cablevision have city-administered cable TV franchise agreements that were last renewed 10 years ago, but both are set to expire this fall. A Cablevision spokesperson said that DoITT held a series of public hearings in January in each borough.

Additionally, Verizon announced today that it will spend $86 million on new network technology for Rhode Island this year. The additional capital will be used to expand Verizon’s FiOS TV service to an additional 10 communities and expand its Providence-based fiber solutions center.

Introduced in Rhode Island in June, FiOS TV is now available to more than 170,000 households. When the service expands to the new communities this year, it will be available to more than 350,000 households.

Verizon will also upgrade its high-speed Internet Service, based on DSL technology, to eight communities in the Ocean State: Cranston, Hope Valley, Jamestown, Narragansett, Pawtucket, Providence, Tiverton and Weekapaug.

Verizon said that the new service, featuring download speeds of up to 7 Mbps, more than doubles the speed of Verizon's current highest-speed DSL offering and was designed to leapfrog speeds offered by cable companies.

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