Verizon Pushes For Change To Cable Rules | Towns would be forced to negotiate deals on 90-day timetable
If passed, new legislation in both the state House and Senate supported by Verizon would drastically alter the ways in which towns and cities in Massachusetts evaluate cable license applications.
Currently, municipalities across the state have a one-year timeframe in which to evaluate, approve or reject new cable license deals, which typically span 10 years. The new legislation would require communities to complete that process in roughly 90 days — a timeframe that many say holds unrealistic expectations.
“A 90-day licensing timetable is not enough time to do a reasonable negotiation process for something as important as a cable contract, which impacts so many municipal, educational, public and First Amendment interests,” said William August, an attorney with the Boston-based law firm of Epstein & August.
August said he negotiates a fair amount of cable applications between companies and municipalities every year and said it’s the content of cable television at the local level that is most at risk if a shortened application process is adopted.
“Why should we tie our hands behind our backs and say, ‘Let’s give ourselves only 90 days,’ when based on experience, it often takes significantly longer than that?” he said.
But Philip Santoro, a spokesman for Verizon, said that communities have shown that they can negotiate these deals quickly, claiming that 38 percent have agreed upon terms with Verizon within 90 days.
While Verizon is pushing for the bill’s passage, its cable competition — like Charter Communications — is against the change. Verizon began offering its fiber optic TV network — called FiOS — in the Bay State in 2006. Since then it’s gone town-by-town establishing franchises in the state.
There are currently two similar bills filed on the issue. One bill, Senate 1531, was filed by Sen. Steven Panagiotakos, D-Lowell, chair of the Senate Ways and Means Committee.
Rep. Michael Rodrigues, D-Westport, has filed a similar bill (H 3765).
When it comes to negotiating an application with a cable company, communities are most often working to find a compromise for local access funding, according to Kathleen Dalgliesh, the cable access director for the town of Northborough, which negotiated a Verizon franchise last July.
She said that under current law, the amount of funding is need-based, but the proposed legislation would require that a new cable provider pay up to 1 percent of the company’s annual gross revenue, capped at the level of the amount invested by the current cable TV provider.
The proposed legislation also states that once the existing cable provider’s contract expires, the public access funding would revert back to the 1 percent figure.
According to Santoro, the new bill would provide an estimated $70 to $90 million statewide each year for local cable programming.
However, Dalgliesh said that the smaller communities, like Northborough, would suffer under the new bill, even if the statewide funding dollars appear high.
“The numbers just won’t work,” she said, adding that the bill levels the playing field for companies like Verizon looking to compete against traditional cable providers, but not in a way that benefits the towns.
“We like having Verizon here,” Dalgliesh said, but she added, “We got some capital funding that we would never have gotten under this new law.”
Santoro said that a 90-day timeframe is not unusual in other states, and that it is in line with recommendations from Federal Communications Commission.
In Times of Competition
Tom Cohan, director of government relations for Charter, characterized the proposed legislation as “a solution in search of a problem,” citing Verizon’s success in negotiating deals without the 90-day rule.
Verizon argues that it takes too long — up to three years — to negotiate deals. But Dalgliesh said that the delays have had nothing to do with the communities.
“The irony of all of this is that the communities have never delayed, Verizon has delayed the communities,” she said. “We were lucky if we could get Verizon to come to a meeting, and you cannot possibly negotiate a contract in one meeting.”
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