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from: Herald Tribune

Cable bill could mean a windfall for Verizon

Debate over the legislation is one of the most intense of the session.
By DEVONA WALKER

The consumer broadband choice bill winding its way through the Florida Legislature could save telephone-company-
gone-cable-provider Verizon millions if not billions of dollars.

The New York-based company, which is spreading its FiOS TV network through Southwest Florida, has engaged dozens of lobbyist to push for support of the bill, which state senators approved in committee this week. A companion bill sailed through the Florida House of Representatives.

The bill would, in essence, open up the entire Florida market to Verizon in one swoop. It could forgo the costly and time-consuming process of negotiating new franchise agreements with every city and county it seeks to enter.

"Look at Sarasota County -- it took almost three years to get that franchise agreement," said Verizon spokesman Bob Elek.

Verizon has negotiated 13 franchise agreements in Florida, where it has a footprint for 63. By comparison, in New Jersey, a state with about 450 municipalities, it took three months to penetrate.

The New York company expects to spend $18 billion to $22 billion nationally by 2010 to lay fiber optics in front of 18 million American households. The proposed law would give the company a much more immediate return on its investment.

"A lot of the cost here are opportunity costs," Elek said. "Putting the network in the ground and knowing that in 180 days you're going to see a return on your investment."

Florida is one of 14 states currently considering similar legislation. Another 10 recently passed similar legislation. Arkansas, Hawaii, Rhode Island and Vermont also have rules granting telephone companies similar access.

A last-minute amendment also ruffled the feathers of wireless telephone provider Sprint/Nextel.

"The big debate we've really focused on is what does this bill mean for consumers of phone service," said John Taylor, a Sprint Nextel spokesman.

Taylor claims that telephone companies, while exhorting the merits of cable competition, are overcharging phone customers and charging smaller telecommunications companies outrageous access fees. "In the telephone market, they are behaving like monopolies."

Amended to the telecom bill is wording giving the telephone company a free pass on returning $150 million to Florida consumers in the form of basic telephone service rate reductions, the final phase of the 2003 Rate Rebalancing bill.

Also complicating passage is that the Senate bill includes build-out requirements, meaning Verizon will have to lay fiber in an entire market and not just selective communities, but the House bill does not.

The roughly 90 lobbyists that have descended on Tallahassee to push for the measure has made the debate over the proposal one of the most intense during the session.

The proposed law is scheduled to be heard in the General Government Appropriations Committee on Tuesday, before it reaches the Senate floor. If it passes, it will go into effect in July.

Even the cable industry has given half-hearted support to the Senate bill, fearing the passage of the House version. "This version of the bill addressed our concerns over cherry-picking with the build-out requirements," said Steve Wilkerson, president of the Florida Cable Telecommunications Association.

"There is still a lot of concern about the bill. It's a big issue. It affects a lot of people. I think it's future is still uncertain," Wilkerson said. "There's a lot of momentum to pass it, to pass something. They've put a lot of resources behind it. I say we support the direction it is going."

Last modified: April 20. 2007 4:45AM