Verizon's FiOS Quandary

With all the complaints U.S. customers have made against cable company fees over the last couple of decades, the chance to finally have some real competition for cable in local communities would seem to be an easy decision for them to make.

But Verizon Communications' FiOS (fiber-optic television service) has been receiving fuzzy reception from hundreds of city officials who see it as a way to get extra equipment and services installed to fulfill other city budgetary needs.

Out of 300 communities targeted, Verizon has secured just 14 franchises for FiOS. And out of 14 franchises, they have launched just one version of FiOS in Keller, Texas, a neighboring community of Dallas.

City officials are also worried about how FiOS will affect existing contracts with cable companies that might want the same cheap deal Verizon is pursuing. They say Verizon is just looking for the same tax breaks that cable operators, who have franchises, already receive.



Because of these considerations, municipalities argue that any further intrusions by companies looking to offer television service should mean opportunities for the city..

Some communities like Tampa, Fla. have asked for a $13 million wish list, including digital editing equipment and cameras for a math-tutoring program for kids. Others are asking for even weirder stuff: high-speed Internet for sewage facilities and junk yards, flower baskets for light poles, cameras mounted on stop lights, and free television for every house of worship.

This is the wrong approach. Verizon's FiOS shouldn't be linked to extra graft and gifts. That's short-term thinking. Officials would be better to view it from Verizon's perspective: that its traditional landline telephone service, like that of other U.S, telcos, is under attack from mobile phone service, Internet-based phone service and other communication technologies. Giving Verizon a franchise isn't giving them a free ride, as cities did with cable operators decades ago. There is way more competition--especially on the television front, with satellite distributors squaring off against cable.

Some city official are also short-sighted in this regard: What happens in the not too distant future when traditional land-line telephone service--another quasi-monopoly, like that of cable--starts disappearing in certain rural towns, as companies like Verizon realize it can make more money elsewhere? That could put some older and poorer citizens in a bind.

The better decision is not to make the same mistake cities did decades ago with the cable companies--and perhaps with telephone companies long before that--but to encourage true competition now.

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