Verizon: We'll Take Manhattan …

After picking up franchises on its outskirts for more than two years, Verizon is poised to invade New York City and battle two incumbents for their 3.1 million cable-TV subscribers.

Verizon jumped on a request for proposals the city issued for citywide cable TV coverage and has submitted a bid to wire all five boroughs.

Incumbents Time Warner Cable and Cablevision Systems divide the territory with 10-year franchises that expire this September. They are seeking renewals now; Verizon has asked for a 12-year franchise. Some parts of the city also can get cable, telephone and high-speed Internet from RCN, an “open video service” provider.

Verizon and city officials acknowledge they've been talking for months about the terms required for a citywide franchise. And the telco (which is also the local phone incumbent) has been stringing fiber-optic cable for high-speed Internet service since 2004, claiming to have wired hundreds of apartment buildings already.

Activating FiOS TV in an existing FiOS Internet-ready building basically requires two pieces of equipment in addition to a set-top, said Matt Stump, senior analyst at researcher One Touch Intelligence in Denver. “I think you need an optical network terminal and a gateway, but 80% of the work is done” once fiber is in the building, Stump, a former Multichannel News editor, said.

Verizon buys “bendable fiber” from Corning to make it easier to wire multistory apartment buildings in New York City, Stump said.

Time Warner, in Manhattan, Brooklyn and Staten Island, has 1.3 million subscribers to Cablevision's 500,000 in the Bronx and Brooklyn, Pali Research analyst Richard Greenfield estimated.

Neither cable firm has expressed interest in a citywide franchise.

Greenfield, in an April 16 research note, said city officials indicated to him that their most significant requirement was that Verizon build out the entire city, “which Verizon appears to satisfy with their proposal.” He thinks the city will do whatever it can to fast-track Verizon's proposal, eager to add video competition within the boroughs.

He thinks city and state officials could sign off on the franchise in three to four months, but five to eight months looks more likely.

Greenfield said Verizon might already pass as much as 15%-20% of the buildings in the city.

Verizon in January said it had surpassed 1 million FiOS TV customers, after earlier saying it had 5.9 million marketable homes in 13 states, averaging 16% video penetration across markets. The first FiOS TV market was Keller, Texas, in September 2005.

Kent Gibbons

Kent has been a journalist, writer and editor at Multichannel News since 1994 and with Broadcasting+Cable since 2010. He is a good point of contact for anything editorial at the publications and for Before joining Multichannel News he had been a newspaper reporter with publications including The Washington Times, The Poughkeepsie (N.Y.) Journal and North County News.