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Note: Statewide video franchising passed in Virginia in 2006. In this first phase of service roll-outs, Verizon is said to be red-lining low income communities in two major cities.

from: Daily Press

Verizon: There's a new competitor in town
It's been long in the making, but competition for cable is coming to parts of Newport News.

BY CHRIS FLORES

April 4, 2007
NEWPORT NEWS -- Verizon has told the City of Newport News it hopes to start selling cable television service in some parts of the city sometime around April 16.

The city is still working with the company on the terms and conditions, which might not be done until May. But a new state law from the 2006 General Assembly means Verizon doesn't have to finish wading through municipal bureaucracy to start competing with Cox.

Verizon first announced in late 2004 that it would install fiber optic cable in parts of Newport News, and later work its way to other parts of the Peninsula. The new Verizon high-speed Internet and television service is called FiOS, and the company is already selling cable in Virginia Beach. As Verizon moves in, the presence of a new competitor for Cox should put pressure on customer service, price and offerings.

The map showing the initial Newport News service areas doesn't reach street-level. It appears to leave out the Southeast community, a small piece of central Newport News and a northern section of Denbigh. When asked by the Daily Press, both Newport News and Verizon officials initially denied that they had a map of the service territory.

Every city and cable company in the country has a long, detailed agreement called a cable franchise, which spells out where a company must offer service within a city. It also has some provisions other than price, which is only regulated by the federal government.

The timetable for serving different parts of each locality is one of the most difficult parts of a franchise negotiation.

The law on franchises was changed last year to make it easier for competitors to sell television service before they get a franchise. Verizon is using that right to start selling television before the agreement reaches Newport News City Council in late May.

Part of the compromise from last year's legislation means that existing and new cable companies must be treated equally. If the city grants a new competitor such as Verizon more favorable terms than those put on Cox, they must also allow Cox to switch to the new agreement.

"The real challenge is to make sure that citizens get the competition they want," said K.M. Butch Blanks Jr., chief of staff for City Manager Randy Hildebrandt.

In Richmond, a political fight brewed during the franchise negotiation process because of the people who were not getting competition anytime soon. Some City Council members there also complained Verizon's plans excluded poor, black neighborhoods altogether.

The map submitted to the city of Newport News also leaves out the greatest concentration of poor, black residents in the Southeast community. This map is supposed to include the plans for the first three years of service.

Under the new law, cities can require a new cable competitor to serve up to 65 percent of the city's residents within seven years and 80 percent within 10 years. Blanks said there weren't any major contentious issues bogging down negotiations, which were moving along smoothly toward a conclusion.

"They're going to do all they can to serve as much of the city as possible," said Blanks.

Some Newport News residents already have access to the FiOS Internet service, but that doesn't guarantee they will be part of the first wave of customers who get television.

"Chances are pretty good they're eventually going to get FiOS TV, just maybe not on day one," said Harry Mitchell, spokesman for Verizon.