New York City would have the right to terminate its franchise agreements with Time Warner Cable and Cablevision Systems if broadband-delivered video starts to significantly erode cable TV revenue over
the next 10 years, under a new pact. The provision -- believed to be the first of its kind -- "helps protect City franchise revenue by enabling the City to renegotiate if there is substantial shift in
content delivery from cable to 'new' and/or emerging technologies," said New York's Department of Information Technology & Telecommunications.
City officials will have the option to
terminate the agreements if franchise fees decline 22.5% or more compared with the "peak year." Otherwise, the franchise terms will run until July 2020, which is the same length as the agreement
reached with Verizon Communications for FiOS TV in 2008. The agreements cap franchise fees at 5% of cable TV service revenue, the maximum allowed by federal law.
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