Verizon presses drive to offer TV

CEO gripes at difficulty in winning city franchises

April 19, 2005|By BLOOMBERG NEWS

Verizon Communications Inc.'s efforts to begin a television service this year are being hampered by the need to win franchise agreements from individual cities, Verizon Chief Executive Officer Ivan G. Seidenberg said yesterday.

"This is, at best, a slow process that presents an unnecessary impediment to consumer choice in video," Seidenberg said in a speech at the National Association of Broadcasters trade show in Las Vegas.

Phone companies already have agreements that let them sell telephone service and must seek additional franchises to offer television programming, Seidenberg said. He urged broadcasters to join Verizon, the biggest U.S. telephone company, in asking the federal government to do away with what he called "the biggest barrier" to Verizon's plan to sell video.

Verizon has begun installing fiber-optic cables to carry fast-Internet access and telephone and television service in more than 100 communities, Seidenberg said. As of last week, the company had obtained five local franchises.

The network will provide an Internet service called Fios, which is four-to-15 times faster than digital subscriber lines (DSL) that deliver Internet access over the older copper-wire system. Verizon plans to reach 3 million homes with the network by the end of the year.

As Verizon continues to pursue the franchises, it is seeking to remove the requirement both at state and federal levels, Seidenberg said.

Verizon shares fell 15 cents to $34 yesterday on the New York Stock Exchange and have declined 16 percent this year.

Seidenberg, 58, is seeking to stave off competition from cable-television companies that also sell telephone and Internet services.

Comcast Corp., the world's largest cable-television operator and the No. 1 U.S. high-speed Internet access provider, plans to make digital-phone service available to nearly 40 million homes through 2006.

Time Warner Inc. and Cablevision Systems Corp., among the other cable companies that operate in Verizon's 29-state local-phone territories, also sell Internet-based calling, known as voice over Internet protocol, or VoIP.

Verizon announced yesterday an agreement with General Electric Co.'s NBC Universal Cable to include channels including Bravo, CNBC, MCNBC, SCI FI Channel, USA and Telemundo in its TV lineup. Verizon said last week that it would carry movie programming from Starz Entertainment Group.

Verizon Executive Vice President Thomas J. Tauke, the company's top public-policy official, said separately that Verizon has begun selling high-speed Internet service over digital subscriber lines in certain Northeastern states. The decision to offer so-called naked DSL means consumers can buy fast-Web access from Verizon while purchasing local calling from a competing provider.

Some legislators have said forcing customers who request DSL to also purchase local calling is unfair to consumers. Sen. Herb Kohl, a Wisconsin Democrat, said in March that Verizon and SBC Communications Inc. should be forced to let customers buy the two products separately in order to win government approval of their planned mergers.

Tauke said Verizon intends to offer standalone DSL nationwide.

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