NYC Getting FiOS TV by Year's End

Verizon Communications Inc. (NYSE: VZ) is making progress toward finally offering FiOS TV in New York City. The telco has been struggling for nearly three years trying to get a cable franchise from the city and now says it plans to be signing up customers before the end of 2008. (See NYC Soon Getting FiOS TV.)

The company says it has submitted a formal proposal to the city outlining its plans for delivering video service to residents and that should the approval process go smoothly, it will be selling video in the largest city in its footprint in a few months. That approval process however will be far from a mere formality.

Verizon’s proposal is now in the hands of the Department of Information Technology and Telecommunications (DOITT), the city agency that handles cable franchises. If the DOITT approves the franchise, it will be forwarded to the Franchise Concession and Review Committee where it will be publicly reviewed for approval. Even after that, the state of New York still has to sign off on it. [Ed. note: Red tape is fun, isn’t it?]

In the meantime, the DOITT is reviewing the process and how quickly it approves is anyone’s guess, especially if it recommends further negotiations. “The city will work around the clock to evaluate this proposal,” says Vincent Grippo, chief of staff for the DOITT. “We certainly want to bring more competition to the market but it all depends on what’s in the proposal and how close the parties are.”

So what have the two sides been talking about for the past few years if a formal proposal has only just been submitted? “The talks really served as a way to gauge both the company’s interest and the city’s interest and make sure there is a foundation for a franchise,” says Grippo.

As if Verizon spending $23 billion and signing up over a million video customers so far didn’t suggest it was interested. [Ed. note: Again, red tape is fun, isn’t it?]

Verizon’s efforts to deploy FiOS TV have been well documented, but after everything it has done so far, it doesn’t have a single subscriber to speak of in the largest and most important city in its footprint. (See NYC Still Waits for FiOS and State Video Franchise Push Grows.) While it still has a lot of red tape to clear, the company is optimistic it will be over by year’s end.

New York City on the other hand is emphasizing that it doesn’t want to negotiate with just Verizon on a cable franchise and that it welcomes any company to come in an submit a proposal. “It’s our hope that other companies, such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , or AT&T Inc. (NYSE: T), might decide to expand their service offerings into New York in the next couple of years,” says Grippo.

That of course would mean an unprecedented action of a telco or MSO building out its footprint to compete with another telco or MSO. In other words, look for cable competition in New York to remain a two-horse race for years to come, once Verizon arrives at the party later this year.

— Raymond McConville, Reporter, Light Reading

rjmcmahon 12/5/2012 | 3:43:17 PM
re: NYC Getting FiOS TV by Year's End re: "As if Verizon spending $23 billion and signing up over a million video customers so far didnGÇÖt suggest it was interested. [Ed. note: Again, red tape is fun, isnGÇÖt it?]"

2.3 x10 exp 10 / 1 exp 6 = 2.3 exp 4.

Therefore, according to this article, VZ has sunk a mere $23,000 per to enter an industry which is shrinking. Vonage looks like a real deal in comparison and we all know where that ended up.
spelurker 12/5/2012 | 3:43:15 PM
re: NYC Getting FiOS TV by Year's End Two points
1. VZ also has something like 2 million data customers for FIOS, so it's closer to $8k per RGU
2. Vonage brought neither content nor infrastructure to the table. VZ is bringing infrastructure and reselling content.

So even if FIOS were to be a flop, there is still lots of equity in the fiber plant. (But it won't be a flop because they provide services that are best-in-class, and tend to have lower churn. -- it will just take longer to turn a profit.)
rjmcmahon 12/5/2012 | 3:43:14 PM
re: NYC Getting FiOS TV by Year's End VZ reselling content is equivalent to VG reselling voice. There is no value add and no reason to enter (other than to satisfy a regulator's fantasy.)

VZ building a duplicate TV infrastructure only makes sense if the infrastructure can be easily migrated to unicast data in the long run at little to no cost (as that's the revenue trend.) Unfortunately, PON technology doesn't support this very well.

I think of this like music. When bw reaches a tipping point it decimates the content industry's revenue. The only thing holding this back for video is the lack of access bw. Infrastructure with the bw to support unicast video will also decimate TDM revenues. So VZ has more to lose than to gain by real progress.

Better is to milk the existing wireline plants and grow wireless revenues. If they were serious about wireline investments, they'd let the speculators build it out and buy the assets from bankruptcy courts.

The numbers posted in this article and that lack of growth in GLW fiber revenues reveals, as Alan Greenspan would say, "Counter party surveillance is lacking and the regulator is unable to perform this function."
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