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from: NY Sun

Slow Going on Push for Fast Internet Service

BY JILL GARDINER - Staff Reporter of the Sun
May 18, 2007

New Yorkers who are anxiously awaiting the day when they can switch cable television providers and sign up for new super-high-speed Internet service will need to sit tight.

While the city is now in the "final stages" of negotiations with the telecommunications giant Verizon over a cable franchise that would break up the Time Warner and Cablevision duopoly, it could take years before the majority of New York City residents can get Verizon's new FiOS fiber-optic network in their homes.

"If there's one key word as to how things will change it's ‘slowly,'" a senior cable and satellite analyst at Sanford C. Bernstein & Co., Craig Moffett, said. "The contract is only one piece of a much bigger puzzle. First they have to build the network, and doing that in New York City is much more complicated than it is in most places."

Many say having a powerful player such as Verizon in the market to compete with cable companies would not only give New Yorkers more options but would drive down their monthly bills.

For months, Verizon has been advertising its FiOS network, which delivers digital television along with Internet connections that are far faster than its DSL service. The network is already up and running in full in some surrounding suburbs.

The hurdles to constructing a new fiber-optic system in New York City are myriad. For one, replacing old copper wires with new fiber-optic lines is more difficult than outside the city because many of the lines are buried underground, not attached to telephone poles as they are in New Jersey, Long Island, and other nearby suburbs.

Even if Verizon is granted a citywide cable franchise, experts say New Yorkers, especially those who live in areas with lots of apartment buildings, will have to be patient if they want to switch. Many buildings are locked into exclusive 10-year agreements with Time Warner or another provider and Verizon will have to negotiate with each individual landlord or co-op board.

Mr. Moffett said New Yorkers who live in neighborhoods with more single-family homes may get access to Verizon's FiOS Internet and television first. "If you live in Riverdale you may get fiber sooner than if you live in the West 90s," he said.

A spokeswoman for Verizon, Heather Wilner, said negotiating with building owners and landlords would be the "major challenge." But she said Verizon is launching its FiOS Internet in more and more communities and that technology upgrades are forging ahead.

"It's true that there are challenges, but they're surmountable and we're already building out the network," she said.

Verizon, she said, is already offering its FiOS Internet service, which does not require any additional city approvals, in some parts of the city. That service is currently available on most of Staten Island as well as in some places in Lower Manhattan, the Bronx, Harlem, and Long Island City. The company plans to launch it in parts of Brooklyn this summer, but would not disclose where.

Once Verizon gets approval on its cable contract, it will be able to start offering television in the neighborhoods that have the upgraded fiber-optic network.

Mayor Bloomberg's Department of Information Technology & Telecommunications commissioner, Paul Cosgrave, said negotiations between the city and Verizon have entered the final stretch.

"Discussions with Verizon about a cable franchise are making substantial progress on key issues," Mr. Cosgrave said in statement. "In the meantime, Verizon continues to build-out the new FiOS system in the city as discussions proceed to their final stages."

Mr. Cosgrave said the goal is the "widest possible build out of cable television and broadband service as quickly as possible." The mayor, who has recused himself from negotiations because his financial news company has a cable channel, has maintained that competition will give New Yorkers more choices and drive down prices.

Technology advocates have been pressing the city to mandate that in exchange for granting Verizon a cable franchise, the company ensure low-income communities do not get left out of the upgrade.

The cable contract is crucial to Verizon because it is rapidly losing telephone customers to Time Warner and Cablevision. Those companies already offer package deals for cable, high-speed Internet, and telephone — the industry's so-called called triple play.

Bruce Lai, the chief of staff to Council Member Gale Brewer, who heads the council's Technology in Government Committee, said that while the network will take a long time to build, Verizon has every reason to get it up as fast as it can.

"If they don't aggressively move ahead to provide more bandwidth they are going to become extinct," he said.