Verizon Agrees to Remove Its "Big Boxes"

Fiber Optic TV May Be Next Step - But Franchise Agreement Required

by Judy Silberstein

(April 17, 2006) After more than a year of negotiations with the Village of Larchmont, Verizon agreed last fall to terms for removing the large, metal, “cross boxes” they had begun mounting on utility poles in prominent residential locations during September of 2004. (See: New Verizon Boxes Appear on Old Poles: Wave of the Future - or Unsightly, Unsafe and Unpaid For?) On Tuesday, April 18, work crews were in Larchmont again, this time to prepare new, less obtrusive spots for smaller replacement boxes. Like their larger brethren, the new boxes will support Verizon’s fiber-optic services, including FiOS Internet. FiOS TV is also a possibility, but that requires a franchise agreement that Verizon has yet to secure.

2004: Verizon crews installed this "cross box" on Larchmont Avenue.

In 2004, following complaints from local officials about aesthetics and safety, Verizon had quickly repositioned objectionable boxes in the Town of Mamaroneck. (See: Larchmont Issues Stop Work Order on Verizon Boxes) However, hammering out an agreement took longer in Larchmont, where a stop work order issued in October 2004 prevented work crews from completing the installations.

In the interim, Verizon has been able to come up with cross boxes that are significantly smaller – about one third the size of the original metal lockers. They also agreed to ground-level locations that are less obtrusive (beside the Fire Department) or hidden by shrubbery (near the corner of Palmer and Pine Brook).

The dispute over the boxes has not prevented Verizon from rolling out new “fiber-to-the-premises” technology that is supported by the cross boxes and employs fiber-optic wire. Verizon has already signed up local subscribers for FiOS Internet, its high-speed service with “downstream connections” that start at 5 Mbps (megabits per second) and go as high as 30 Mbps. This compares to Verizon DSL service that tops out at 3 Mbps, and is comparable to what is available from Cablevision’s Optimum Online.

Not yet available in Larchmont (or anywhere in Westchester), however, is FiOS TV, Verizon’s new cable television service that it has started to unroll in selected communities in New York and six other states. That’s because cable TV providers are required by law to enter into franchise agreements with local municipalities before they can sign up subscribers – and Verizon has yet to sit down for serious talks with Larchmont-Mamaroneck’s Cable Board of Control, according to its administrator, Village of Mamaroneck Manager Lenny Verrastro. Like Cablevision, the sole current cable TV provider in the area, Verizon would be required to pay a franchise fee.

How high a fee? That would depend on the agreement, but it’s likely to be the same as paid by Cablevision, or 5% of revenues related to cable TV subscriptions in the tri-municipal area. Cablevision has also agreed to a capital allocation. For example the cable provider paid for equipment used in LMC-TV’s studios and to broadcast live from municipal board rooms.

Verizon has said it is willing to go through the local negotiation process. In fact, earlier this month it concluded negotiations with the Town of Hempstead on Long Island where Cablevision already provides service. However, Verizon is also supporting “consumer video choice” legislation that would free it to negotiate a single nation-wide franchise agreement. “The goal is to reduce the amount of time required to get new providers, big and small, into the video market,” said Heather B. Wilner, spokesperson for Verizon. “In many areas of Verizon's territory, where this has occurred, cable prices have dropped,” she said.

Earlier this month, a “video choice” bill passed a House of Representatives subcommittee by a wide margin.(See: House Subcommittee Clears Franchise Bill)

That concerns Erik Lewis, LMC-TV’s executive director. The federal bills “would take away local control – we don’t like them,” he said. It’s not enough to provide consumer choice, he suggested. “Satellite competes with cable but doesn’t provide local access programming. We are the ‘light that shines’ on government,” he said, referring to LMC-TV’s broadcasting of municipal and school board meetings and “all the activities that are important to the life of our residents.”

It’s possible Verizon would agree to carry LMC-TV’s programs, were they to be granted a national franchise. But Mr. Lewis wonders if Cablevision would allow a competitor to benefit from the broadcasting equipment it has supplied. “The devil is in the details,” said Mr. Lewis.

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