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Video Franchise Battles – First Local, Then National

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It is time to add coverage of the hyper local problems of broadband, video franchising, and other issues such as problems faced by municipalities. Patrick Hynes focuses on the battle between Cablevision and Verizon in the New York’s Long Island region. And if somewhere along the way, we find a success story, brilliant. Since I cannot be everywhere, it would need some help from the readers/community. If you are a citizen reporter, and can shed light to the issues involved, drop me a line, or a link. Any suggestions on how best to track it all would be welcome. – Om

By Patrick Hynes

While America loves an underdog, there is no real underdog in the telcos v. cable battles raging across the country and in Washington, DC. Nevertheless, it is hard not to cheer for the telcos. The cable companies have so abused their position in the market place over the years, many Americans are just fed up. I have likened the battle to a political campaign. The cable companies represent the incumbent and the telcos represent the challenger, albeit a well-funded one. In New York, the incumbent is getting nasty. Cablevision launched an aggressive, some would say dirty, campaign to keep Verizon out of Hempstead, a Long Island community of over 700,000 residents. Consistent with my political analogy, this battle featured a much-publicized negative ad.

Cablevision helped finance a television ad and a direct mail campaign that cleverly hinted that Verizon had “red lined” the map of Hempstead while deploying its FiOS product. (Cablevision didn’t actually say Verizon “red lined” for that would have been a crime.) In an editorial, Newsday said the smear campaign was” poisoning the debate” and the maps submitted to the city by Verizon “gutted their argument.” In the end, the city of Hempstead granted Verizon a franchise to compete for customers. As consultant Jeff Kagan told The New York Times:

What’s happening there in New York is an early curve of what’s going to be happening around the country in the next few years. … This is a new wave of competition. Basically the telephone and cable television companies are both rushing to offer the same bundle of services: television, phone, Internet and wireless. The sooner they do, the sooner prices will come down for all the customers.

And prices have already come down in the few California communities that have opened the door to video competition. University of California Professor Yale Braunstein released a study earlier this month in which he found “prices in the California cable TV market dropped 15 to 22 percent when the Cable giants competed with wireline paid- TV providers such as Verizon and AT&T.” The study was financed by AT&T, it should be noted, so take it with a pinch of salt.
The traveling road show now heads to New Jersey. Meanwhile, Verizon continues to lay fiber in Massachusetts, Maryland, and Pennsylvania.

What’s the end game? These local battles seem to be the proving ground for the war in Congress over national franchising. There is a mark up on the national franchise bill which risks being stymied by otherwise ancillary issues. These aren’t irrelevant or inconsequential concerns. But it is time Congress thinks about the consumers for once, and not the big industry players.

Patrick Hynes is a freelance writer from New Hampshire. He runs the blog the Channel changer

8 Responses to “Video Franchise Battles – First Local, Then National”

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  2. lessgov

    I agree with Mannyhawkin. How is a monopoly preferrable to a duopoly? Is that the new line from the Cable companies? Prevent a duopoly by preserving our monopoly? That’s not exactly convincing. But, even in a duopoly, competition exists, as companies must compete against each other for customers. That results in better service and lower prices. I see no reason for local municipalities to prevent the spread of services such as FiOS.

  3. As a lucky resident of Alameda CA I actually am able to use the cities municipal broadband services at a pretty steep discount over what Comcast offers in the area. I can’t speak to what happens in all areas when competition is introduced, but Comcast and Alameda have a bitter rivalry with Alameda having undergone a long term price war for several years now. To make it worse, Alameda sits in the heart of Comcasts Bay Area hub and represents a huge thorn in their side. Last year technicians were accused of illegally slamming Alameda customers and a good percentage of Alameda customers inexplicably found Comcast showing up on their sets instead.

    If you stay in Alameda, Comcast offers a locals only price of $10 off what you normally pay (which is still more then the municipal cable company) and they offer their specials for 12 months to customers instead of the customary 3 months that San Francisco residents receive. If there ever is a perfect example of what happens when competition enters a market, Alameda is it. I think it’s criminal that the telcos have bribed local governments to give them exclusive control over most communities. Rather then making their citizens pay extra money for cable so that the local school district can access studio time and cable channels, I’d rather see everyone pay less and enjoy the benefits of innovation which seem to occur when competition rears it’s ugly head.

  4. Mannyhawkin

    Jon said: “Oh well, it was good while it lasted.” I’m not sure what that means. What has lasted is the monopoly in my town. I would love to have a duopoly. Comcast is all we get for true broadband (we can get DSL, but I don’t consider that true broadband), and at the rate we’re going, it will be another century before we get FIOS and all the way to a duopoly.

  5. Jeff said:
    so unless you have broadband over power lines (generally unavailable), satellite broadband (latency and weather issues), or some as-yet-unheard of technology

    You left out muni-WiFi’s. Verizon wouldn’t try to block towns from installing WiFi networks would they?

  6. It’s only a matter of time before they settle into a nice comfortable duopoly. You only have one local cable company, and it’s like pulling teeth to have a real CLEC providing service (took me a month to get Speakeasy going in my old Virginia apt; Verizon are the devil)…so unless you have broadband over power lines (generally unavailable), satellite broadband (latency and weather issues), or some as-yet-unheard of technology (IP over natural gas, etc), you’ll have your two choices. The FCC will call this competition, the DOJ will roll over, and that’s it – while there may be multiple competing companies in each area, any given consumer will only have two picks.

    Oh well, it was good while it lasted.

  7. it’s ironic that where I live (DC) Verizon is asking Congress for a national franchise, but most of the staffers its talking to won’t actually get FiOS in their homes since the company has not announced plans to enter the District – only the rich suburbs.

  8. Thank you, I’ve been trying to tell everyone that these issues need to be addressed locally. If you have a concern about Net Neutrality, A La Carte service or any telecom issue, then bring it up at your local town council meeting when the Verizon road show hits your town.

    I’ve been trying to get the word out that if you have a concern with Verizon or AT&T then the time to address it is when they ask your local town council for permission to operate a cable TV franchise.

    Big picture questions need to first be asked locally. When the time comes for action at the federal or state level there will need to be precedent at the local level; otherwise the questions won’t even make it to the table.

    I have my own questions about Verizon and I am asking my town to address them. You can check out my simple blog at: to see how I am trying to ask my questions.

    Act locally. — Tom
    [email protected]