Verizon FiOS to Hit the Big Apple

Verizon is taking its FiOS data technology to New York.

The telecom giant has reached an agreement, announced by the mayor’s office and the city’s Department of Information Technology and Telecommunications, under which Verizon will build out to 30 percent of the city by the end of 2008, 50 percent by the end of 2010, and all of it by 2014—if it acquires a certain number of subscribers.

The deal still needs approval from New York’s Franchise and Concession Review Committee, which is scheduled to hold a public hearing on the matter on Tuesday, May 20. It would pit Verizon service head-to-head against Time Warner Cable and Cablevision. (TWC is looking for a buyer, Time Warner officials announced Wednesday.)

City officials said the agreement includes rigorous customer service protections, increased channel capacity and 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.

“Our Administration is committed to bringing better service and competitive choices for cable television to the residents of New York City, and the proposed agreement would go a long way toward doing that,” said Deputy Mayor Robert C. Lieber. “With the introduction of direct competition among cable companies, prices and service levels would reflect real market forces, and New York City customers would be the beneficiaries. Today, the overwhelming majority of New York City residents have just one cable television provider available to them. If approved, the agreement would require Verizon to offer cable service to all residences in New York City, establishing a competitive marketplace in an industry that has been dominated by single providers and a lack of competition since its creation.”

Verizon’s agreement will also pay the City a franchise fee of five percent of the revenues generated in the City from its cable television services, the maximum percentage permitted by federal law. 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 increase 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; and,
  • Provide a $4 million Technology Education and Municipal Facilities grant to expand public access to technology.

Verizon’s commitment to installing a new fiber system on every street in the city within six years could be relaxed with up to three one-year extensions if certain subscription rate goals are not met, the city said. That would bring the completion date to 2017.