Verizon cable hits town
Published on June 28th, 2006
STONEHAM, MA - The town’s Board of Selectmen unanimously granted a franchise license to Verizon New England, Inc. on Tuesday night, making the corporation the third cable television service provider in Stoneham.
According to Peter T. Bowman, the Vice-President for external affairs for the New England branch of the corporation, Verizon plans to offer its highly touted FiOs product to the Stoneham area.
The cable, Internet, and phone services, which are tapped through its FTTP or Fiber-to-the-Premise infrastructure, has an advantage over its competitors — those being RCN and Comcast in Stoneham — as it utilizes high-speed fiber optic cables, the Vice-President contended.
Specifically, unlike common connections, the FTTP product abandons regular copper-wire connections that extend directly to a resident’s home or business, and instead installs fiber-optic lines directly to the customer’s dwelling, the applicants claimed.
Verizon, which is relatively new to the cable television arena, has already struck agreements to provide its FiOs services to several other neighboring municipalities, including Winchester, Reading, Woburn, Burlington, and Lynnfield.
“If a license is approved tonight, Verizon will soon provide great alternatives to Stoneham. Our FiOs product will provide more content, over 300 television channels, a library of on-demand services, and high-bandwith Internet,” Bowman told the Selectmen.
In May of 2005, the telecommunications company first announced its intentions to apply for a franchise license within the town.
According to both Town Counsel Bill Solomon and James F. McGrail, a Verizon-hired consultant from the Insight Group in Somerville, an accord was struck between the Stoneham attorney and Verizon officials after extensive negotiations since that time.
Included in that legal agreement, which was formally endorsed by the Selectmen last night, Verizon must commit to a number of financial incentives and service-centered milestones as a condition of its recently obtained license.
“We expect that within one-year, we would be able to provide cable services to 80 percent of the town. And we are committed to providing cable services to every single resident within the town within five-years,” explained McGrail, referring to one particular provision in the deal.
“In terms of capital support, the license requires Verizon to pay $540,000 over 10-years,” added Solomon, proudly announcing that the payment would be the largest such figure ever awarded by the company to a municipality the United States.
According to the Town Counsel, the break-down of those payments would include a $150,000 check within 30-days of the license approval, and then a $43,333.33 sum over the next nine years.
In addition to that agreement, the telephone and cable service provider would also dedicate five-percent of its annual revenues to Stoneham Community Access and the town.
Ultimately throwing his support behind the measure, former Finance Board member Dan Doherty questioned how the Verizon agreement compared to surrounding communities.
Specifically, Doherty inquired about one aspect of the legal pact that allowed Verizon to potentially wiggle-out of the ten-year deal just four-and-a-half years into the agreement.
In response, Solomon insisted that he took every possible precaution to ensure that a “level-playing field” existed between all three of the town’s cable television providers — meaning one company could not duck-out of its agreement due to an unfair advantage provided to a competitor.
As to the clause allowing Verizon a way-out of its 10-year commitment, the Town Counsel pointed-out that the company would pay over $320,000 to Stoneham in capital funds before that time.
Indicating that Comcast also has similar language in its accord, which he referred to as a “surrender clause”, Solomon also contended that he had ensured that Verizon could not abandon the deal unless it proved that the reason behind that exit was due to a lack of customer subscriptions.
“My concern was not as much that they would get out of the business, but that they would say they would be getting out of the business, and really just get out of the license,” the Town Counsel explained, saying his hope was to prevent Verizon from leaving to take advantage of a federally-issued franchise license (which recent legislation has since proposed allowing).
Pending contract negotiation, Patriquin is expected to replace Joseph Casey as Assistant Superintendent of Stoneham schools, a position he has held for five years, as he moves his career to Melrose to become that school system's superintendent.
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