The stage is set in New York City for a battle between Verizon, Cablevision and Time Warner Cable (TWC) now that the New York State Public Service Commission (PSC) has signed off on an agreement between Verizon and the city of New York that will let the telco offer video services.

The New York PSC confirmed the agreement yesterday between Verizon and New York City, which means that Verizon can offer its FiOS video service in all five of the city’s boroughs.

Currently, Time Warner Cable provides services in the boroughs of Staten Island, Manhattan, Queens and one-third of Brooklyn. Cablevision offers its video services in the Bronx and the remaining area of Brooklyn, as well as in areas outside of New York City such as Westchester County, where it competes directly with Verizon.

New York City will receive 5 percent of the fees from Verizon’s video service, which is the maximum amount allowed by federal law and the same amount Time Warner Cable and Cablevision pay. Time Warner Cable and Cablevision’s franchise agreements are set to expire this year, but after preliminary hearings in January, the two cable operators are working on renewing their agreements with the city.

The confirmation by PSC follows an agreement on April 29 by the city's Department of Information Technology and Telecommunications to accept the Verizon proposal, and approval by the city's Franchise and Concession Review Committee on May 27.

"Now, for the first time, direct competition will exist among New York City’s cable companies, affording each of the city's three million households not only a true choice of providers and competitive prices but also a host of benefits associated with the agreement," said the deputy mayor for economic development, Robert Lieber.

Verizon, which is building out the new fiber optic system to reach all of New York City's estimated three million homes, has said that 30 percent of its new network would be built by the end of this year, 50 percent by the end of 2010 and all of it by 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. Verizon didn’t provide a detailed schedule of its video rollout in the boroughs, but Staten Island is expected to be first this year.

Verizon announced yesterday that its FiOS broadband and video services are now available to an additional 800,000 homes and businesses in six west-central Florida counties.

On Tuesday, the board of selectman in Sutton, Mass., signed a cable franchise agreement with Verizon. Verizon currently offers FiOS TV in 73 Massachusetts communities.

And today, Verizon announced a franchise agreement in Hampton, Va. The 15-year franchise agreement covers 55,000 homes in Hampton.