New York City demands ‘cord cutter’ provision in new Time Warner, Cablevision franchise contracts

In the first contract of its kind between a city and cable companies, New York City has asserted the right to cancel its franchise agreements with Time Warner Cable and Cablevision Systems if broadband-delivered video starts to significantly erode cable TV revenue over the next 10 years.

The “cord cutter” provision helps protect city franchise revenue by enabling New York City to renegotiate if there is a substantial shift in content delivery from cable to new technologies, said New York’s Department of Information Technology & Telecommunications.

The new contract provision formally recognizes a growing trend of cable “cord cutters” who are turning off cable to watch alternative television and movie programming over the Internet.

City officials will have the option to terminate the agreements if franchise fees decline 22.5 percent or more compared with the peak year of the agreement. If the contracts are not terminated, they will run until July 2020. This is the same length as the agreement reached with Verizon Communications for FiOS TV in 2008.

In another new provision under the renewals, Time Warner Cable and Cablevision will invest about $10 million to install Wi-Fi access in 32 public parks in all five boroughs (with specific parks yet to be determined). The Wi-Fi build outs are to be substantially completed within two years of franchise approval and to be maintained by companies through 2020.

And, for consumers, the cable providers will have to pay for failing to honor service appointments. The contract would make cable customers eligible for a credit equal to a full month’s bill if a technician does not arrive on time.

Customers can request notification by e-mail, phone or text message when a technician is heading to their home. And in most cases, after making a choice from an automated menu, a customer should have to wait no more than 30 seconds to speak to a representative.

In New York City, cable companies frequently don’t show up for service appointments. Some subscribers get so fed up with their cable company that they give up on customer service and complain to 311, the city’s help line.

Almost 1200 complaints have been received this year alone, most of them related to the quality of service, according to city statistics. But city officials believe that there are many more unhappy customers out there.

As Robert Porto, 38, a Time Warner Cable customer in Boerum Hill, Brooklyn, told the “New York Times,” the new contract is “the ultimate revenge for the little guy.”

The franchise agreements still require approval by the city’s Franchise and Concession Review Committee and the New York State Public Service Commission.