Verizon fired a shot across the bows of both Time Warner Cable (TWC) and Cablevision when it announced yesterday that it has applied for a city-wide franchise agreement to serve all five New York City boroughs with its fiber optic video service.
Verizon submitted its plan in response to the New York City Department of Information Technology and Telecommunications' (DoITT) open solicitation that was issued on Friday.
"Millions of New Yorkers rely on cable television as an important source of information, news and entertainment, and today we've taken a significant step toward opening this market to potential new providers," said DoITT Commissioner Paul Cosgrave. "It is our firm belief that – as in any business – direct competition between cable providers will result in greater choice, lower prices and enhanced customer service for cable television subscribers. We look forward to receiving and reviewing these new proposals."
The DoITT said in its press release that "the solicitation is non-exclusive and open-ended, so that any company interested in and capable of offering service to all city households will be eligible for consideration for a franchise over the months and years to come," which means that other cable companies could also seek a city-wide franchise.
Currently, TWC provides services in the boroughs of Staten Island, Manhattan and Queens, while TWC and Cablevision both provide video service in parts of Brooklyn. Cablevision also offers video services in the Bronx, as well as in areas outside of New York City such as Westchester County.
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.
TWC's New York region issued the following statement in regard to its franchise agreements in New York City: "Time Warner Cable is proud of the service we provide to residents of New York City, where competitive options have always been available. As we are in the process of working out a schedule to renew our franchise agreement, we look forward to continuing to bring New Yorkers an innovative array of new technology, 24-hour-a-day local news and exciting video choices, including scores of high-definition channels.
"The RFPs issued by the city are for new video applicants and separate from our renewal discussions. Our contract expires in September, and we expect to begin discussions to renew our current service areas with the city shortly."
The DoITT said that any and every franchise agreement arising out of its solicitation will include significant customer service requirements and be subject to approval by the city's Franchise and Concession Review Committee (FCRC) after the public has an opportunity to review the proposed agreements.
If the Committee and the city approve Verizon's proposal, it will be submitted to the New York Public Service Commission for confirmation, as are all cable franchises. If all approvals are achieved in a timely fashion, Verizon said that it would begin offering service to city residents later this year.
Verizon has proposed a 12-year agreement to serve the approximately 3.1 million households, which include households and multi-dwelling units (MDUs), in the New York City boroughs.
Verizon said it would have its fiber optic network completed in mid-2014.
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.
In January, it was reported that New York City officials were having secret discussions with Verizon about a 15-year video franchise deal (story here).
Verizon also announced yesterday that the Orchard Park Village Board of Trustees, which is located in New Jersey, has granted a video franchise to Verizon.
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