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New cable law will let Verizon vie for TV service
Competition may mean lower costs, more jobs
Saturday, August 05, 2006
BY JOSEPH R. PERONE STAR-LEDGER STAFF
Do not adjust your TV: The picture is about to change.
Phone companies will be able to sell fiber-optic television service statewide under legislation signed yesterday by Gov. Jon Corzine that turns up the volume on competition for the first time since the cable industry was born more than 30 years ago.
Verizon New Jersey said it would begin wiring homes by the end of the year. To do that, the company said it will spend $1.5 billion and hire hundreds of workers.
The legislation allows telecommunications companies and public utilities to apply for statewide TV franchises, rather than seek approval town by town as the current law requires. The new law, the first substantive change in cable TV regulation since 1972, allows Verizon and others to compete with cable companies such as Comcast and Cablevision.
"The power of competition can improve quality and lower prices," Corzine said.
The bill-signing followed a high-priced lobbying war between Verizon and the cable industry that dragged on in Trenton for more than a year.
Although the cable companies have long faced competition from satellite TV, the entrance of Verizon is expected to dramatically shake up the market. The Holy Grail for both cable operators and telephone companies is selling the "triple play" -- bundled packages that include high-speed Internet service, Internet telephone service and television, all over the same line.
Verizon said it plans to apply to the N.J. Board of Public Utilities for a franchise in early November, and hopes to begin offering TV service in more than 100 towns by year's end.
"Gov. Corzine's decision means New Jersey consumers and businesses are poised to have the nation's most advanced communications network delivered directly to their front door," said Ivan Seidenberg, chief executive of Verizon.
The company said it plans to offer 180 digital channels, including local news channels in some areas, as well as video-on-demand services with access to 2,500 movies or television shows for about $40 a month.
Internet access will be offered at speeds of up to 50 megabytes, which will allow consumers to download a movie in three minutes, according to Sharon Cohen-Hagar, a spokesman for Verizon New Jersey in Basking Ridge.
The company said it also will build a multimillion-dollar control center in Freehold to transmit video services to 3.5 million residents by the end of 2008. The company has already hired 1,000 technicians to build its network in various pockets of the state, and it expects the deployment of fiber-optic technology to lead to "hundreds of additional jobs in New Jersey."
Analysts said Verizon had little choice but to take on the cable operators because it has been losing customers in its core phone business to wireless competitors. Consumers will win in the end, according to Edward Snyder, an analyst at Charter Equity Research in San Francisco.
"The cost of your service is going to continue to drop," he said.
More competition can lower cable TV bills by up to 16 percent, according to Bill Dressel, executive director of the New Jersey State League of Municipalities, citing a report by the Federal Communications Commission.
Consumer advocates, however, are leery about whether new players such as Verizon will focus only on wealthy suburbs rather than the inner cities.
"How will they do apartment complexes in urban areas?" asked Phillis Salowe-Kaye, executive director of NJ Citizen Action. "We also are concerned that people in rural areas such as South Jersey will not have the same choices as other folks."
Rich Young, a spokesman for Verizon, said the company is required to build its system in "every city in the state," although it will take some time to lay fiber-optic cable throughout New Jersey.
Corzine signed an executive order yesterday directing state Public Advocate Ron Chen to monitor the build-out of the cable systems and bring enforcement actions if necessary. The order also directs the BPU to issue regulations to enhance the state's ability to monitor the build-out of new cable franchises.
"Through his executive order, Gov. Corzine took bold action to protect against redlining and promote universal service, requirements Verizon has consistently fought," said Bill Powers, a spokesman for Cablevision.
Patrick MacElroy, a spokesman for Comcast, said his company is not worried about competition from phone giants.
"We have invested more than $1 billion in New Jersey to build a fiber-rich network that delivers the best value in information and home entertainment services ... and we are very confident in our ability to compete against any and all competitors as we move forward," he said.
Staff writer Shira Ovide contributed to this report.
http://www.nj.com/news/ledger/index.ssf?/base/news-8/1154752049242710.xml&coll=1&thispage=2
Competition may mean lower costs, more jobs
Saturday, August 05, 2006
BY JOSEPH R. PERONE STAR-LEDGER STAFF
Do not adjust your TV: The picture is about to change.
Phone companies will be able to sell fiber-optic television service statewide under legislation signed yesterday by Gov. Jon Corzine that turns up the volume on competition for the first time since the cable industry was born more than 30 years ago.
Verizon New Jersey said it would begin wiring homes by the end of the year. To do that, the company said it will spend $1.5 billion and hire hundreds of workers.
The legislation allows telecommunications companies and public utilities to apply for statewide TV franchises, rather than seek approval town by town as the current law requires. The new law, the first substantive change in cable TV regulation since 1972, allows Verizon and others to compete with cable companies such as Comcast and Cablevision.
"The power of competition can improve quality and lower prices," Corzine said.
The bill-signing followed a high-priced lobbying war between Verizon and the cable industry that dragged on in Trenton for more than a year.
Although the cable companies have long faced competition from satellite TV, the entrance of Verizon is expected to dramatically shake up the market. The Holy Grail for both cable operators and telephone companies is selling the "triple play" -- bundled packages that include high-speed Internet service, Internet telephone service and television, all over the same line.
Verizon said it plans to apply to the N.J. Board of Public Utilities for a franchise in early November, and hopes to begin offering TV service in more than 100 towns by year's end.
"Gov. Corzine's decision means New Jersey consumers and businesses are poised to have the nation's most advanced communications network delivered directly to their front door," said Ivan Seidenberg, chief executive of Verizon.
The company said it plans to offer 180 digital channels, including local news channels in some areas, as well as video-on-demand services with access to 2,500 movies or television shows for about $40 a month.
Internet access will be offered at speeds of up to 50 megabytes, which will allow consumers to download a movie in three minutes, according to Sharon Cohen-Hagar, a spokesman for Verizon New Jersey in Basking Ridge.
The company said it also will build a multimillion-dollar control center in Freehold to transmit video services to 3.5 million residents by the end of 2008. The company has already hired 1,000 technicians to build its network in various pockets of the state, and it expects the deployment of fiber-optic technology to lead to "hundreds of additional jobs in New Jersey."
Analysts said Verizon had little choice but to take on the cable operators because it has been losing customers in its core phone business to wireless competitors. Consumers will win in the end, according to Edward Snyder, an analyst at Charter Equity Research in San Francisco.
"The cost of your service is going to continue to drop," he said.
More competition can lower cable TV bills by up to 16 percent, according to Bill Dressel, executive director of the New Jersey State League of Municipalities, citing a report by the Federal Communications Commission.
Consumer advocates, however, are leery about whether new players such as Verizon will focus only on wealthy suburbs rather than the inner cities.
"How will they do apartment complexes in urban areas?" asked Phillis Salowe-Kaye, executive director of NJ Citizen Action. "We also are concerned that people in rural areas such as South Jersey will not have the same choices as other folks."
Rich Young, a spokesman for Verizon, said the company is required to build its system in "every city in the state," although it will take some time to lay fiber-optic cable throughout New Jersey.
Corzine signed an executive order yesterday directing state Public Advocate Ron Chen to monitor the build-out of the cable systems and bring enforcement actions if necessary. The order also directs the BPU to issue regulations to enhance the state's ability to monitor the build-out of new cable franchises.
"Through his executive order, Gov. Corzine took bold action to protect against redlining and promote universal service, requirements Verizon has consistently fought," said Bill Powers, a spokesman for Cablevision.
Patrick MacElroy, a spokesman for Comcast, said his company is not worried about competition from phone giants.
"We have invested more than $1 billion in New Jersey to build a fiber-rich network that delivers the best value in information and home entertainment services ... and we are very confident in our ability to compete against any and all competitors as we move forward," he said.
Staff writer Shira Ovide contributed to this report.
http://www.nj.com/news/ledger/index.ssf?/base/news-8/1154752049242710.xml&coll=1&thispage=2
