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NYC Approves Franchises For Time Warner Cable, Cablevision

New York City's Franchise and Concession Review Committee on Wednesday approved franchise agreements with Time Warner Cable and Cablevision Systems, extending their rights to offer cable TV in the Big Apple through July 18, 2020.

The franchise agreements -- which among other things require the operators to deploy Wi-Fi networks in 32 public parks and meet new customer-service standards -- must receive final approval by the New York State Public Service Commission, which is expected to occur this fall. TWC and Cablevision together have more than 2 million subscribers in the city's five boroughs.

The deals were provisionally reached between the MSOs and the city's Department of Information Technology and Telecommunications in September 2010. The city reached an agreement with Verizon Communications for FiOS TV in 2008 that also runs through 2020.

A spokesman for the city's DoITT said the agreements with TWC and Cablevision are largely the same as the ones reached last year with only minor changes.

Under a unique "opt-out" provision, New York City would will have the option to terminate the agreements if franchise fees decline 22.5% or more compared with the "peak year" -- a stipulation included in the event that broadband-delivered video starts to significantly erode cable TV revenue before 2020.

The agreements cap franchise fees at 5% of cable TV service revenue, the maximum allowed by federal law. Under the deal, the operators have agreed to create 40 public computing centers and provide commercial-grade Internet service to public libraries.

Time Warner Cable and Cablevision also agreed to enhanced customer service protections, which are intended to mirror the protections incorporated in the Verizon FiOS franchise granted in 2008.

These include: online appointment confirmation; 10-day time period for resolution of complaints; a requirement to answer customer service phone lines within 30 seconds; billing dispute resolution procedures; and four-hour appointment windows and customer credits for missed appointments and certain outages.

In another new provision under the renewals, Time Warner Cable and Cablevision will invest about $10 million to install Wi-Fi access in 32 public parks in all five boroughs (with specific parks yet to be determined). The Wi-Fi buildouts are to be substantially completed within two years of franchise approval and to be maintained by the companies through 2020.

Under the public Wi-Fi provision of the agreements, the MSOs'
customers would have access to the Wi-Fi hotspots for no extra charge,
as they do in a few parks and public areas already. For non-subscribers,
Wi-Fi would be free to anyone in up to three monthly sessions of 10
minutes each, with TWC and Cablevision allowed to charge 99 cents per
day for access thereafter. That pricing is fixed for three years, with
moderate increases possible starting in the fourth year.

Howard Szarfarc, Time Warner Cable region vice president of operations for New York City, said in a statement: "Time Warner Cable is pleased to confirm that today we've reached a new franchise agreement with the City of New York. This license to operate enables us to continue connecting New Yorkers and local businesses with the latest information, entertainment and technology."

"We are very pleased to have reached agreement to renew these important franchises with the City of New York," Lisa Rosenblum, Cablevision's executive vice president for government and public affairs, said in a statement. "Cablevision has been delivering enormous value to residential and business customers through its state-of-the-art telecommunications services in The Bronx and Brooklyn for more than two decades. Under these franchise agreements, crafted consistent with the competitive environment, Cablevision looks forward to continuing to provide its customers in The Bronx and Brooklyn with award-winning Optimum television, phone and high-speed Internet products for years to come."

The operators are scheduled to sign and execute the franchise agreements next week, after which they will be submitted for approval to the New York State PSC.

New York DoITT Commissioner Carole Post said the public benefits included in the franchise deals are estimated at approximately $60 million.

"We aggressively leveraged the city's franchising authority to negotiate new cable television contracts that are unique and innovative in the benefits they deliver to New Yorkers," Post said in a statement. "With expanded access to Wi-Fi in parks, new computer centers, broadband expansion to the City's industrial areas, and new public access channels, these agreements provide New Yorkers the world-class tools, services, and access they need to more fully participate in the digital economy."

The agreements call for the MSOs to enhance public, educational and government (PEG) channels by augmenting the nine current channels with eight new ones to be phased in over the next several years. At least one PEG channel will be in high-definition, and the operators are to devote 25 hours of video-on-demand for educational/government programming.

Earlier this week, the public-access TV programmer in Brooklyn, N.Y., approved its agreement with Time Warner Cable and Cablevision. Public-access programmer BronxNet in the Bronx also approved its deal with Cablevision this week.

The city collected more than $100 million in franchise fees from Time Warner Cable and Cablevision in fiscal year 2011, which ended June 30, 2011.

Time Warner Cable was first granted cable TV franchises for Northern and Southern Manhattan in 1970, which were renewed in 1990 and again in 1998; the Queens, Staten Island and Western Brooklyn franchises were granted in 1983 and renewed in 1998.

Cablevision was first granted cable television franchises for the Bronx and the non-Time Warner portion of Brooklyn in 1983, which were renewed in 1998.

The Franchise Concession and Review Committee is comprised of two representatives of the Mayor's Office, one representative each of the Law Department and the Office of Management and Budget, one representative of the Comptroller, and one representative for each of the five borough presidents.