Verizon spent much of the past year negotiating a deal to bring FiOS to NYC with Mayor Bloomberg's office. At no point have the closed door negotiations involved input from the public, and the actual franchise agreement appears nowhere on the NYC website -- though it is hosted
by one of the three NYC residents actually paying attention to what city residents are agreeing to. Now with the deal all but wrapped up, the city is holding a public hearing today, but gave attendees all of 22 hours notice
Verizon has promised to have the whole city wired with FiOS by 2014
, but the franchise agreement deserves a closer look than it's getting. For instance, Verizon is pushing a $200 early termination fee on city residents, and as usual, the 5% franchise fee is simply being pushed through to consumers. The penalties Verizon faces for failing to reach deployment checkmarks also aren't exactly steep when compared to overall Verizon profits.
Brooklyn, the Bronx and Queens aren't scheduled to see much FiOS deployment until at least 2011, and by then Verizon's liability for wimping out on their promise will be severely weakened. Here's the penalty fees Verizon (who just won a $679 million contract
from the Department of Homeland Security) has to pay by year:
2008: Thiry-Five Million Dollars ($35,000,000)
2009: Thirty Million Dollars ($30,000,000)
2010: Twenty-Five Million Dollars ($25,000,000)
2011: Fifteen Million Dollars ($15,000,000)
2012: Ten Million Dollars ($10,000,000)
2013: Five Million Dollars ($5,000,000)
2014: One Million Dollars ($1,000,000)
I'm sure Verizon, who pays $16 million every year on lobbying alone, is terrified
of only having to pay a few million to skip out on their obligations once the city's most lucrative areas are wired (not that they'd ever, in a million years dream of doing that). And they only have to pay those penalties if their lawyers can't negotiate an endless stream of extensions. Consumer advocate Bruce Kushnick, every telco employee's least favorite person for his relentless poking into telco finances, also notes that nobody at city hall bothered to think about retired copper
The basic read is Verizon can pull out whenever it wants by paying chump change. It is allowed to pass-through costs, including franchise fees, and there is absolutely no reference to the underlying question - What happens to the utility when Verizon starts pulling out the copper or it uses for 'local' phone products and services to deploy FiOS...
For those in NYC who care about your broadband future, the hearing is to be held today at the NYC College of Technology, 285 Jay Street, Brooklyn, NY. The hearing begins at 3:00pm and is anticipated to run until at least 6:00pm. City resident Joshua Breitbart notes
that after the Franchise and Concession Review Committee (FCRC) hearing today, there's a second public meeting scheduled for 11am next Tuesday, May 27 at 22 Reade Street.
It's unlikely your bullhorn will have much of an impact on the final agreement at this late juncture, but it might make you feel better to pretend the NYC government gives a damn about what you think.