Friday, August 01, 2008

Verizon’s Cable Franchise for NYC Leaves Safety Questions Unanswered

Verizon has been building out its FiOS service around the state, one municipality at a time. FiOS is Verizon’s fiber optic product which can provide voice service, high-speed Internet access, and video programming -- the “triple play” alternative to the offerings by Cablevision and Time Warner Cable. While the company can switch its voice and dial-up or DSL customers to FiOS as soon as the fiber is installed in their neighborhood, Verizon is unable to turn on its cable programming until it receives a franchise from the local franchising authority (generally, a town, village, or city), which is then approved by the New York State Public Service Commission. This is the same process required of all cable companies around the state.

At its July Agenda Session, the PSC had a special Verizon cable TV franchise application on tap -- one for New York City. Keep in mind that Cablevision and Time Warner Cable divvy up the City now, so, for the first time, there will be true competition for the provision of cable television service in the country’s largest city. See Verizon Begins Competing for Cable TV Customers. Satellite services, of course, serve the entire country, but with the large number of multi-dwelling buildings and lack of a direct sight line to the satellite due to the skyscrapers, these offerings have not been as successful in NYC as elsewhere.

Generally, the Commission’s monthly Agenda Meetings are not for the faint of heart or for those lacking a good night’s sleep. They can be known to run on for three or more hours, with Commission Staff explaining in excruciating minutia the details of a utility’s proposed financial plan and the five Commissioners asking questions to the Staff in a well-orchestrated effort to create regulatory policy. Dissents are almost unheard of; the details and compromises apparently have been addressed behind closed doors.

Not this time, and not in a case as important and as highly visible as Verizon’s NYC cable franchise. In this case there was a little issue of public safety. It appears that Verizon has had some grounding issues with its FiOS service -- violations of the National Electrical Code which can lead to “shocking” results.

These concerns only became public when Commissioner Patricia Acampora’s questioned agency Staff about whether Verizon had resolved its grounding problem. See PSC Session Transcript, p. 92 - 119 As it turns out, Verizon was to submit a report on its progress regarding this delicate issue, but didn’t get it in until the close of business the day before the big meeting.

Commissioner Acampora questioned how she could rule on the NYC franchise application when she never even had a chance to review the safety report. Even after being assured that compliance would occur prospectively, she actually voted “no” on the cable franchise item. Somehow, Commission Staff’s statement -- that its five field inspectors could handle Verizon’s nearly 300,000 installation locations in New York City alone -- couldn’t sway her vote.

Apparently, a little electrical shock can’t compete with a customer’s choice of two providers of the History Channel.

Common Cause/New York, Consumers Union, New York Public Interest Research Group, and People’s Production House submitted comments to the Commission which raised concerns regarding the lightning like speed of the proceedings which had worked to limit public input on the franchise conditions and Verizon's request for waiver or relaxation of consumer protection standards, such as changing the time for connection from seven days to one year from the date of a customer's request for service. These concerns were dismissed out-of-hand by the Commission, noting that the comments were submitted late -- though clearly not as late as Verizon’s safety report.

Common Cause urged the PSC "to make serious improvements to the existing franchising procedures and stand firm on consumer protections in advance of the renewal process with the incumbent cable providers in New York City." Renewal of the other franchises will be considered later this year.

Lou Manuta

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