County, Verizon strike deal

Comcast may get more competition in Montgomery

Friday, Sept. 15, 2006

Montgomery County and Verizon reached an agreement Wednesday stipulating that Verizon would drop a lawsuit filed earlier this year if the County Council agrees to open the county up to the company’s cable TV service.

The agreement would allow Verizon to offer cable service over its fiber optic lines to customers to compete with Comcast Cable, said William R. Roberts, president of Verizon Maryland.

Comcast recently launched a promotion bundling TV, phone and Internet service, prompting the Philadelphia company to hire hundreds more workers in the region.

As part of the agreement, Verizon would support the county’s public education and government channels, provide cable television to the county’s 100 public buildings, such as schools, fire stations and libraries, and pay the county 5 percent of its gross cable revenues as franchise fees.

Verizon and Montgomery County staff began working on an agreement last year, but negotiations stalled when Verizon filed its suit, said Jane E. Lawton, cable communications administrator for the Montgomery County Department of Technology Services.

The negotiations had gone slowly in part because Verizon had two teams of negotiators working on the project and neither Verizon team seemed to be pushing to reach a deal, Lawton said.

‘‘It wasn’t like they gave it their full attention,” Lawton said. ‘‘We’d have a meeting and there was a long gap until the next meeting. It was frustrating for us as well as for them. We were at different places and if they had remained at the table we would have continued to negotiate. But [the lawsuit] really did help them step it up.”

Verizon spokesman Harry J. Mitchell declined to discuss the negotiations or the company’s decision to file a lawsuit.

‘‘We’re beyond the point of finger-pointing,” Mitchell said. ‘‘But Verizon was very engaged throughout this process in 2005.”

The company would be able to provide the fiber-cable television service called FiOS TV to about half the homes in the county by the end of this year if the county council approves the agreement, Mitchell said.

Verizon has been upgrading the county’s fiber optic network since late 2004. The company has a timetable to expand the fiber optic network over the next several years.

Verizon already offers the fiber-optic television service in Howard and Anne Arundel counties as well as Bowie.

Where FiOS TV is offered, Verizon’s penetration rate is about 10 percent within six months of offering it, Mitchell said.

He declined to provide numbers on what the company expects to do in Montgomery County.

Meanwhile, Comcast officials are reviewing Verizon’s agreement with the county, said Comcast spokeswoman Lisa Altman.

Comcast provides service to 1.1 million subscribers in the greater Washington, D.C., area, but does not provide a breakout of subscribers in each county or the company’s penetration rate, she said.

‘‘We’ve been competing for years in Montgomery County and will continue to provide our customers with the best products and services,” Altman said.

The public will have a chance to review and comment on the franchise agreement with Verizon before it goes to the council for a vote. The hearing will be held at 7 p.m. Sept. 28 at the Council Office Building, 100 Maryland Ave., Rockville.

‘‘We’re eager to work with the council to bring this matter to conclusion so that Verizon can bring ... competition to Montgomery County residents as quickly as possible,” Roberts said.