407 West State Street, Trenton, NJ 08618  (609)695-3481
 NJLM logo 

William G. Dressel Jr, Executive Director - Michael J. Darcey, CAE, Asst Executive Director

Peter J. Ventimiglia

Video Choice and Competition
A Winning Combination for
Consumers and Municipalities


Peter J. Ventimiglia
Vice President, External Affairs
Verizon, New Jersey

In the last half decade we’ve seen technologies converging at breakneck speeds. Today consumers can download music and carry it around in their hands. Rental DVDs can be ordered through the Internet one day and delivered to your home the next. And you can make phone calls over the Internet or through your cable connections rather than using a traditional telephone.


Verizon’s entrance into the cable TV market with this new and innovative product—and the resulting benefits to consumers, towns and the state—are being impeded by the state’s outdated cable franchise laws.


The convergence of these technologies means more choices for consumers. And when there is more choice, there is competitive pressure on pricing. Just ask Blockbuster what Netflix has done to the video rental business.

The next logical step in this convergence is beginning. Today, Verizon is placing miles of fiber optic cable throughout residential neighborhoods in New Jersey. The service that will ride this fiber network is called Fios(sm). It is available to many consumers right now in Bergen County.  By the end of this year, we will deliver fiber connections to homes and small businesses in more than 70 communities in eight counties in New Jersey.

Fios(sm) offers customers unmatched network reliability, crystal clear voice transmission, incredible data speeds, and many exciting new options for voice and data connections.  This high-speed, future-proof network is capable of carrying hundreds of diverse television channels and more than 1,000 movies on demand.  As a result, thousands of Verizon customers in New Jersey could have a brand new way to spend their cable TV dollars.   

Unfortunately, Verizon’s entrance into the cable TV market with this new and innovative product—and the resulting benefits to consumers, towns and the state—are being impeded by the state’s outdated cable franchise laws.  Verizon already has a franchise to deploy and operate networks in the state, and municipal consent to use rights of way in the communities it serves.  Yet, under existing cable franchise law, Verizon would have to obtain a second franchise to use those same networks to offer consumers a choice of cable providers.

Consumers believe that it should be easier for new entrants, like Verizon, to bring them new and innovative services.  A benchmark survey was conducted last May to measure attitudes toward – and perceptions of – communications companies among consumers throughout the Garden State. Not surprisingly, almost seven in ten homeowners (67 percent) strongly agree that it should be easier for companies to compete to provide television service in New Jersey.

At the root of this sentiment is consumers’ strongly held belief that the cable industry today is a “monopoly” that pales in comparison to telephone companies and cell phone companies in particular, when it comes to offering not just competition, but reliable services, good value and good customer service. In fact, 70 percent of respondents describe cable television service as a monopoly “with no choice for consumers.”


Under draft legislation, companies that negotiate “territory-wide” franchises would pay higher franchise fees directly to each municipality.


Clearly, when it comes to cable TV competition, consumers support it. More and more newspaper columnists and editorial boards are beginning to support it as well. In an editorial last June the Bergen Record said, “Standing in the way of the new cable-like TV service are outmoded state laws that require Verizon or any other company to get the approval of a municipality before it can offer TV services to any of that town’s residents. That hurts Verizon, but it hurts New Jersey consumers even more. A strong new alternative to cable TV would make the industry more competitive and could lower rates.”

Consistent with consumer demand, legislators are beginning to take a closer, harder look to support making it happen. One solution being considered is draft legislation that would allow new entrants and existing cable providers to seek a territory-wide franchise that would obviate the need to negotiate a video franchise with each municipality.  Under this scenario, a new entrant like Verizon would still need the approval of the BPU and would work out the implementation details with each municipality including the provision of public access channels for local use.

This approach would promote cable competition for the benefit of consumers and our communities.  The benefit to consumers is obvious.  When Verizon enters the cable market, consumers will have a choice of cable providers that will compete vigorously for their business.  This means consumers will be able to order better services at fairer prices.  A report by the Government Accountability Office indicated that when a land-based cable TV competitor is in the market, prices tend to be more than 15 percent lower. Verizon’s entry into the cable TV market is well positioned to drive cable prices down.

The benefit to towns is no less significant.  Under draft legislation, companies that negotiate “territory-wide” franchises would pay higher franchise fees directly to each municipality.  Since these fees would be calculated on all cable TV revenues and not just basic cable service, the municipalities would see higher revenues that the municipality could use for its own purposes.

New Jersey has the chance to lead the nation and create a new path to economic growth, technology investment and video compet NJLM - Video Choice and Competition

407 West State Street, Trenton, NJ 08618  (609)695-3481
 NJLM logo 

William G. Dressel Jr, Executive Director - Michael J. Darcey, CAE, Asst Executive Director

Peter J. Ventimiglia

Video Choice and Competition
A Winning Combination for
Consumers and Municipalities


Peter J. Ventimiglia
Vice President, External Affairs
Verizon, New Jersey

In the last half decade we’ve seen technologies converging at breakneck speeds. Today consumers can download music and carry it around in their hands. Rental DVDs can be ordered through the Internet one day and delivered to your home the next. And you can make phone calls over the Internet or through your cable connections rather than using a traditional telephone.


Verizon’s entrance into the cable TV market with this new and innovative product—and the resulting benefits to consumers, towns and the state—are being impeded by the state’s outdated cable franchise laws.


The convergence of these technologies means more choices for consumers. And when there is more choice, there is competitive pressure on pricing. Just ask Blockbuster what Netflix has done to the video rental business.

The next logical step in this convergence is beginning. Today, Verizon is placing miles of fiber optic cable throughout residential neighborhoods in New Jersey. The service that will ride this fiber network is called Fios(sm). It is available to many consumers right now in Bergen County.  By the end of this year, we will deliver fiber connections to homes and small businesses in more than 70 communities in eight counties in New Jersey.

Fios(sm) offers customers unmatched network reliability, crystal clear voice transmission, incredible data speeds, and many exciting new options for voice and data connections.  This high-speed, future-proof network is capable of carrying hundreds of diverse television channels and more than 1,000 movies on demand.  As a result, thousands of Verizon customers in New Jersey could have a brand new way to spend their cable TV dollars.   

Unfortunately, Verizon’s entrance into the cable TV market with this new and innovative product—and the resulting benefits to consumers, towns and the state—are being impeded by the state’s outdated cable franchise laws.  Verizon already has a franchise to deploy and operate networks in the state, and municipal consent to use rights of way in the communities it serves.  Yet, under existing cable franchise law, Verizon would have to obtain a second franchise to use those same networks to offer consumers a choice of cable providers.

Consumers believe that it should be easier for new entrants, like Verizon, to bring them new and innovative services.  A benchmark survey was conducted last May to measure attitudes toward – and perceptions of – communications companies among consumers throughout the Garden State. Not surprisingly, almost seven in ten homeowners (67 percent) strongly agree that it should be easier for companies to compete to provide television service in New Jersey.

At the root of this sentiment is consumers’ strongly held belief that the cable industry today is a “monopoly” that pales in comparison to telephone companies and cell phone companies in particular, when it comes to offering not just competition, but reliable services, good value and good customer service. In fact, 70 percent of respondents describe cable television service as a monopoly “with no choice for consumers.”


Under draft legislation, companies that negotiate “territory-wide” franchises would pay higher franchise fees directly to each municipality.


Clearly, when it comes to cable TV competition, consumers support it. More and more newspaper columnists and editorial boards are beginning to support it as well. In an editorial last June the Bergen Record said, “Standing in the way of the new cable-like TV service are outmoded state laws that require Verizon or any other company to get the approval of a municipality before it can offer TV services to any of that town’s residents. That hurts Verizon, but it hurts New Jersey consumers even more. A strong new alternative to cable TV would make the industry more competitive and could lower rates.”

Consistent with consumer demand, legislators are beginning to take a closer, harder look to support making it happen. One solution being considered is draft legislation that would allow new entrants and existing cable providers to seek a territory-wide franchise that would obviate the need to negotiate a video franchise with each municipality.  Under this scenario, a new entrant like Verizon would still need the approval of the BPU and would work out the implementation details with each municipality including the provision of public access channels for local use.

This approach would promote cable competition for the benefit of consumers and our communities.  The benefit to consumers is obvious.  When Verizon enters the cable market, consumers will have a choice of cable providers that will compete vigorously for their business.  This means consumers will be able to order better services at fairer prices.  A report by the Government Accountability Office indicated that when a land-based cable TV competitor is in the market, prices tend to be more than 15 percent lower. Verizon’s entry into the cable TV market is well positioned to drive cable prices down.

The benefit to towns is no less significant.  Under draft legislation, companies that negotiate “territory-wide” franchises would pay higher franchise fees directly to each municipality.  Since these fees would be calculated on all cable TV revenues and not just basic cable service, the municipalities would see higher revenues that the municipality could use for its own purposes.

New Jersey has the chance to lead the nation and create a new path to economic growth, technology investment and video competition.  Getting there is simple:  lawmakers should put territory-wide legislation reform on the fast track when the state legislature reconvenes this fall.

Such action creates a win-win scenario for consumers, for municipalities and for lawmakers ready to lead the charge.  It’s time to put into law what voters are demanding—access to the latest technologies that will create real choice and genuine competition in the cable television arena.

 

 

 

Article in October 2005, New Jersey Municipalities