By Alex Kraus
A new Virginia law taking effect July 1 will make it easier for
telecommunications companies to offer new video services to consumers--
from DSL Internet access to "Comedy Central." The competition, Verizon
says, will mean lower prices for consumers.
The new law, signed by Gov. Tim Kaine on March 10, will make it easier for companies like Verizon and Sprint to compete with local cable TV and satellite providers by shortening the time local governments have to approve a new service provider for their community.
Before this law was enacted, cable providers had to wait up to 18 months for a local government to approve their franchise. The new law shortens waiting time by setting a three-month time limit for local government approval of franchises.
Adelphia currently has a virtual monopoly on Lexington's cable franchise. However, the law allows other telecommunications companies, like Sprint or Verizon, to build a fiber optic line in Lexington and apply for a competing franchise.
A franchise is the license issued by a local government allowing the telecommunications company to serve its citizens. The new law will allow Adelphia to re-negotiate its franchise agreement with Lexington if the incoming telecommunications companies negotiate more favorable terms than Adelphia's current franchise.
“If your community put Adelphia under very different standards and Verizon comes in and gets provisions that are not as strict, then you’ve got one provider that is able to run the board because they have provisions that are not as onerous," said Ray LaMura, president of the Virginia Cable Telecommunications Association. “Under this provision, Adelphia is under the same rules and you don’t have one locked into an old contract.”
The Virginia Cable Telecommunications Association represents all cable providers in the state.
“The secret here is getting choice to consumers as quickly as possible,” said Harry Mitchell, a spokesperson for Verizon Virginia. “Cable rates increase annually and studies have shown that where consumers have a chance of choosing cable providers, prices are 16 percent lower than where they don’t have a choice.”
“It truly was a compromise in legislation,”
said Mitchell. “No party involved got what it wanted. On balance, it’s a
bill that from our point of view will give us a more definite timeline
that we can start offering video services, instead of the 16 to18 months
that we’ve been seeing under the current method.”
Verizon was a big supporter of the new legislation, said LaMura. The
company is building a fiber optic line to offer different kinds of
high-speed services to areas in Virginia. Mitchell said the new law will
quicken the speed at which Verizon can offer services such as
high-definition TV and video-on-demand through its FiOS fiberoptic
television network.
The Verizon fiberoptic network currently serves only Richmond, Hampton Roads, and areas in northern Virginia, but the network will continue to expand, said Mitchell.
“It’s a work in progress and will be for the next few years. It’s a tremendous project, something that our predecessors have never done before. It will offer a huge network and offer our consumers a tremendous amount of choice,” he said.
Mitchell could not say when other less-metropolitan parts of the state will have access to Verizon's FiOS service.
Rockbridge County is not likely to get the competitive service any time soon. LaMura said he is skeptical that Verizon will be able to expand into less-populous parts of the state.
The law requires that new applicants must provide service to a minimum percentage of people in a given locality; applicants have seven years to reach 65 percent of a community. This is a slower growth curve than previous regulations, which required a provider to reach the same number of people in two or three years.
“The question for Verizon is, when are they coming to your community? They say they’re going to provide a choice and the question is, when are they going to come?” LaMura said.
Chart the history of the telecom bill in the General Assembly
Produced by Washington and Lee journalism students.
Lead supervisor: Prof. Claudette Artwick
Reporting supervisor: Prof. Doug Cumming
Editing supervisor: Prof. Pamela Luecke
Technical supervisor: Michael Todd