By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, January 4, 2006
Verizon Communications Inc. broke into Maryland's cable television market as the Howard County Council voted unanimously last night to grant the company a franchise, giving the telecommunications giant another victory in its effort to expand its array of services nationwide.
Under the agreement, Verizon could start rolling out cable television service in parts of the county in early March, though it has yet to announce pricing. The New York company would have three years to build a fiber-optic network in the eastern, most populated part of the county and a total of seven years to reach the more rural areas.
Verizon has won similar agreements in six other states, including Virginia, which has approved franchises in Fairfax County, Fairfax city, the town of Herndon and the Marine base in Quantico.
Verizon's television initiative is part of a broad and aggressive push to offer its customers telephone, Internet and television services in one package. In 2004, it invested $1 billion in building its fiber-optic network nationwide, and it accelerated construction in the past year. The network passed by 3 million homes and businesses last year, and Verizon expects to build outside another 3 million homes and businesses this year. In Maryland, the company has hired 250 full-time employees and more than 1,400 contractors to lay down fiber lines.
The effort comes as cable companies have begun offering Internet-based phone services. But the phone company's push into cable's television arena has put it at loggerheads with that industry, which says Verizon is seeking unfair competitive advantages in the deals it is trying to strike. Comcast Corp., Howard County's sole cable provider, demanded that the county grant Verizon the same terms and conditions under which Comcast operates.
Even though there are inherent differences in the regulations governing telephone companies and cable television providers, the legislators tried to have both franchises look as much alike as possible, said Dean Smits, cable administrator for Howard County.
"Neither company has been provided lesser or more onerous regulations" under this deal, Smits said.
The legislation included amendments requiring Verizon to provide contact information on customer bills and create a local customer service office in the county once it has 30,000 subscribers.
"I've taken Comcast's issues seriously," said Councilman Ken Ulman (D-West Columbia), who co-sponsored the amendments with Councilman Christopher J. Merdon (R-Northeast County). "But at the end of the day, my constituents are telling me that they want competition. Studies have shown when there is competition, prices come down and customer service goes up."
Harry Mitchell, Verizon's spokesman, dismissed Comcast's arguments about leveling the playing field. "The playing field is tilted in their favor because they have 100 percent of the cable market" in the county, Mitchell said. "We come in with no customers and no market share."
Jim Gordon, a spokesman for Comcast, said his company appreciates the changes the county has made in this agreement. "We still think there are a few more areas the county could look into further," Gordon said. "But we have the product, the technology and the team to compete in the marketplace today as we have been doing for several years."
Other states that have reached franchise agreements with Verizon are Texas, California, Florida, New York and Massachusetts.
Howard County executive James N. Robey (D) is expected to sign the measure as early as today.