Verizon cable deal close

Officials hope more providers in Arundel lower bills

council will review contract

June 01, 2006|By PHILLIP MCGOWAN | PHILLIP MCGOWAN,SUN REPORTER

Anne Arundel County officials are scheduled to announce a tentative agreement today that would make telecommunications giant Verizon Communications the third company offering cable television in the county, pitting it in a head-to-head battle for customers with Comcast Corp. and Millennium Digital Media.

If the deal is approved, Anne Arundel would become the second county in Maryland to grant the phone company a cable TV license -- something experts say should result in lower fees for customers.

In recent months, Verizon has made an aggressive play to compete against Comcast in video services, just as Comcast is seeking to cut into its rival's market share by offering telephone service in suburban Maryland.

"The name of the game is competition and giving customers what they want," said Verizon spokeswoman Sandra Arnette. "A large part of that is bundling products and services."

Through the fiber-optic line, Verizon can deliver phone, high-speed Internet and cable TV. Communication giants are competing to offer such "bundled services," especially in affluent suburban communities.

The 15-year deal has been under negotiation since August, Arnette said. It still needs County Council approval. County Executive Janet S. Owens forwarded a bill to the council Tuesday that includes the 47-page contract after Verizon submitted a nonrefundable $10,000 application fee May 24.

The agreement would provide free basic cable service to all county schools, fire and police stations, libraries and other buildings "used for municipal purposes." Verizon has agreed to dedicate five channels for public access programming. In exchange, the county would receive 5 percent of all cable revenue from Verizon.

Owens declined to comment yesterday through a spokesman. County officials have announced a news conference for 1 p.m. today in Annapolis with Owens and Verizon Maryland President William R. Roberts.

Most council members said yesterday that they had not had time to review the deal. While withholding judgment on the bill, they said Verizon's cable presence could lead to better service and reduced bills. Currently, many areas of the county are served by either Comcast or Millennium, not both.

"It's the United States of America, and competition is good," said Councilman C. Edward Middlebrooks, a Severn Republican.

In January, Howard County became the state's first jurisdiction to get cable service from Verizon. The cities of Bowie and Laurel in Prince George's County have also reached similar cable deals this year. The company is pursuing agreements with Prince George's and Montgomery counties as well as Baltimore County, which this month granted Verizon permission to install 13 million linear feet of fiber-optic cable.

Arnette said the company plans to expand the service to other areas of the state "real soon."

A Howard county official had estimated the competition created by Verizon's cable presence could reduce cable TV bills by 15 percent.

According to the proposed deal, Verizon will provide cable service to about three-quarters of the county -- running east from Laurel through Odenton and Crofton and into Crownsville, Severna Park, Mayo and Annapolis -- in an initial phase. Within that area, Verizon has agreed to offer cable to all businesses within two years and to nearly all homes within five years. Where service will be installed depends on population density, according to the deal. Within seven years nearly three-quarters of the county will have service, except portions of the southern end.

With Howard County, the company has anticipated that it would extend service to at least 85 percent of the jurisdiction within three years.

Council Chairman Edward R. Reilly, a Crofton Republican who serves the county's southern half, said that Verizon, as with other cable companies, is "picking the low-hanging fruit first," referring to the county's dense suburban pockets.

"I'm expecting balance ... a reasonable timetable for service to South County," said Reilly, who did not elaborate.

Comcast, known more for its cable and high-speed Internet service, has responded to Verizon's charge by offering residential phone service. So far, Comcast has picked up 25,000 phone customers in eight counties and Baltimore, spokesman Jim Gordon said, and the company is launching a "bundled service" with phone, Internet and cable in Washington.

"We are more than ready to compete [with Verizon,]" Gordon said. "We say bring it on. We have the product, the people and the technology."

In addition to the Verizon contract, the council will also review cable agreements this summer for Comcast and Millennium. Reilly said the review process will be important in gaining assurances from cable providers to expeditiously extend service into sparsely populated, rural areas.

Council members said they have begun this week to meet individually with Verizon officials. A public hearing is set for June 19, and a vote on the agreement could occur that night.

phill.mcgowan@baltsun.com

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