Baltimore County OKs Verizon cable deal

Council action means Comcast will soon have competitor

March 06, 2007|By Josh Mitchell | Josh Mitchell,sun reporter

Verizon cable TV deal approved The final obstacle to cable television competition in Baltimore County was removed last night when the County Council approved a deal with Verizon Communications.

The county becomes the third in the Baltimore area with competition between Verizon and Comcast, long the area's dominant cable provider.

Officials with Verizon, which has largely been a telephone service provider, said they hope to begin offering cable TV in parts of Owings Mills, Cockeysville and Reisterstown by summer and countywide within 10 years.

"There's been a lot of pent-up demand for a competitor to their incumbent cable provider, and we're taking advantage of that," Verizon spokeswoman Sandra Arnette said in an interview yesterday.

Verizon has begun selling cable hookups in Anne Arundel, Howard, Montgomery and Prince George's counties. Company officials said they hope to reach deals with the governments in Baltimore City and in Carroll and Harford counties.

Baltimore County officials said they hope competition will bring improved service and reduced rates.

Such expectations haven't always been met in other areas.

Montgomery County residents' cable bills from three competing providers went up recently, according to news reports.

"Two competitors is better than one monopoly, but it doesn't necessarily guarantee you lower prices or greater choice," said Jeannine Kenney, senior policy analyst with Consumers Union. "We're skeptical that competition alone is going to solve the problem."

She said more regulation of the prices television broadcasters charge cable companies for their programming is needed.

Rates vary by area. In Baltimore, Comcast offers basic cable service for $55.95 a month, a company spokesman said. Verizon advertises on its Web site basic cable service at $42.99 a month.

Both companies also offer combinations of Internet, cable and telephone services, with prices varying among package deals.

John Lamontagne, a Comcast spokesman, said the company recently increased rates by 3 percent in Montgomery County to cover millions of dollars spent on additional services, including more on-demand channels.

Arnette said Comcast's decision to offer more services in Montgomery is evidence that competition pressures companies to become "more innovative."

Some companies have begun offering higher-speed Internet connections at no additional charge.

"It's not necessarily just savings on prices," Arnette said. "Because we want to keep that customer base, you need to make sure you're priced competitively, that you're offering services consumers want and that you're able to roll those services out quickly."

Baltimore County Councilman Kevin Kamenetz said he has seen studies reporting a modest impact on rates from competition but that he hopes the companies in the county will at least be pressured to improve service.

"I want to keep people's expectations realistic, but I think it will be a healthy competition and good for the citizens," the Pikesville-Ruxton Democrat said.

Under the 15-year agreement approved last night, Verizon will pay 5 percent of its gross revenue to the county as compensation for using county land to deliver the service. Comcast contributes the same percentage to the county, paying about $9 million a year.

The council voted hours after the Federal Communications Commission issued rules making it easier for AT&T and Verizon to challenge cable companies in selling television services.

The FCC order requires local regulators to decide within 90 days on phone companies' applications to offer TV. The order also limits the types of fees and requirements that local agencies can place on TV franchises, Bloomberg News reported.

Before the council vote, Kamenetz said that under the new rules, the county would have less leverage negotiating with Verizon.

Thomas J. Peddicord, the council's lawyer, assured the panel that the Verizon deal would take effect immediately and would not be subject to the FCC's new rules.

josh.mitchell@baltsun.com

Area cable service

HOWARD: In January 2006, Howard became the first jurisdiction in Maryland to reach an agreement with Verizon for providing cable TV service to residents in competition with Comcast.

ANNE ARUNDEL: Last summer, Anne Arundel became the second, approving a 15-year deal with Verizon. Annapolis soon followed with a 10-year deal with the company.

CARROLL: The sole provider is Comcast, which assumed control of Adelphia in August.

HARFORD: Comcast and Clearview Cable offer cable. Clearview provides service to a small number of people in northern Harford and in York County, Pa., largely in areas where Comcast hasn't extended cable lines.

BALTIMORE CITY: Comcast is the sole provider, but Verizon officials say they want to begin talks about serving the city, along with jurisdictions such as Carroll and Harford counties.

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