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Verizon likely to break Comcast monopoly in Pittsburgh
Jul 07, 2009 (The Pittsburgh Tribune-Review - McClatchy-Tribune Information Services via COMTEX) --
Verizon is poised to break Comcast's cable TV monopoly inside the city.
Pittsburgh Mayor Luke Ravenstahl on Monday announced a tentative deal to allow Verizon Pennsylvania Inc. to install its fiber-optic network, dubbed FiOS, to provide high-speed Internet, phone and cable access within six years.
"For the first time in the city's history, Pittsburgh residents will have a choice in their cable provider," Ravenstahl said.
City Council must approve the proposed 10-year deal, which is the product of about 15 months of negotiations involving Verizon, city officials and consultant Dan Cohen, a former city councilman.
Comcast has been the city's lone cable provider since it purchased AT&T in 2002, said Bob Grove, a Comcast spokesman. Comcast has about 850,000 customers in the Greater Pittsburgh area, he said.
"From a competitive standpoint, we are very confident in our network and in the products and services we deliver today," Grove said.
Verizon would pay Pittsburgh 5 percent of annual gross revenues it earns in the city, said Howard A. Stern, director of city information systems.
In exchange, the city would grant Verizon access to city-owned utility poles, street-level cable conduits and other public rights-of-way to reach about 160,000 households.
The city gets the same 5 percent cut from Comcast, about $4.2 million a year. Comcast's 10-year deal expires Dec. 31.
"We wanted to bring competition to Comcast," Stern said.
FiOS would be installed in two, three-year phases.
Each phase would cover half the city and include at least 50 percent of households with moderate to low incomes, Stern said.
Phase one includes the North Side, Downtown and South Hills neighborhoods such as Carrick, Overbrook, Brookline, Beechview and Banksville. Phase two is the rest of the city.
"We didn't want them to come in and cherry-pick the more affluent neighborhoods. They had to service every single neighborhood," Stern said.
Lee Gierczynski, a Verizon spokesman, said residents in the Brookline, Beechview and Banksville neighborhoods who have Verizon FiOS Internet service will be among the first who can get FiOS cable TV because they are equipped for it.
Gierczynski said more than 250,000 customers in Allegheny County and a few other suburbs have some element of fiber-optic service. Expanding the full package into Pittsburgh is part of the company's plan to spend $18 billion between 2004 and 2010 on its fiber-optic network.
Philadelphia City Council approved a 15-year deal with Verizon in February. The $1 billion installation must be completed there within seven years.
"They're trying to catch up to where we are now," Comcast's Grove said. "People in Pittsburgh can have Comcast cable right now."
Verizon packages range from $47.99 a month to $57.99 a month.
Verizon agreed to provide Pittsburgh's public safety agencies with access to an institutional network, dubbed I-Net. It would provide communication links among police stations, fire stations, the City-County Building and other city facilities.
The agreement includes a five-year, $700,000 grant to upgrade outdated equipment in the city's in-house TV studio and funding for a government access channel, an education channel and a channel for Pittsburgh Community Television.
Legislation detailing the proposed Verizon agreement should be introduced today to City Council. Public hearings are likely to follow. The 11-member Cable Communications Advisory Committee is scheduled to meet at 6:30 p.m. Monday in the City Council Chamber, Downtown.
The meeting is public, but likely won't be televised, Stern said.
Stern said the goal is to have the deal approved by the end of July. If that happens, he said some areas could begin to access FiOS by August or September.
Councilman Bill Peduto, chair of council's Committee on Finance and Law, said final approval by the end of July is impossible. He wants to closely compare Pittsburgh's deal with Verizon to those of other major cities.
"They've had 15 months to get this done. Now that the backroom deal is done, it has to go through a public process," he said.
To see more of The Pittsburgh Tribune-Review or to subscribe to the newspaper,
go to http://www.pittsburghlive.com/x/pittsburghtrib/. Copyright (c) 2009, The
Pittsburgh Tribune-Review Distributed by McClatchy-Tribune Information Services.
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