Verizon First To Get State Video Franchise In California - InformationWeek

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Verizon First To Get State Video Franchise In California

California is the ninth state to offer statewide video licenses, with bills pending in 14 other states.

Verizon Communications is the first company to get a state-issued video franchise in California, a move expected to make it easier for Verizon to offer its fiber-optic TV and broadband service across the nation's most populous state.

The state's Public Utility Commission awarded the franchise Thursday under a law that went into effect Jan. 1. Under the franchise, Verizon can add 45 communities in Southern California, where it already offers FiOS TV service in 18 communities under local franchises, the company said. It plans to announce the names of the additional communities this month.

"The commission's rapid approval of our application opens up an exciting new dimension in home entertainment for many of our Southern California customers," Tim McCallion, Verizon's West region president, said in a statement.

Verizon, which aggressively lobbied for the new law as it made its way through the state Legislature, was the first company to file an application for a statewide franchise that would bypass local authorities. The company currently offers its digital TV and broadband service in more than 200 cities in parts of 10 states.

Supporters of state franchises argue that they'll help bring lower prices faster to consumers by providing more competition to cable companies, which dominate the TV market. Telephone companies need to offer TV service in order to more effectively compete with cable companies that are adding telephone service to their broadband and TV offerings.

Among telephone companies, Verizon is the furthest along in building the fiber-optic infrastructure needed to reach consumers and businesses. The company currently offers FiOS voice and Internet service in more than 1,600 cities in parts of 16 states. Verizon, however, doesn't have approval for TV in most of those communities.

California is the ninth state to offer statewide video licenses, with bills pending in 14 other states. While Verizon executives have said the number of FiOS TV subscribers have exceeded expectations, it currently has less than 10% of the potential 2.4 million subscribers in areas where the company offers the service, The Wall Street Journal reported.

AT&T has joined Verizon in supporting federal legislation that would allow nationwide franchises. While such a law has failed in Congress, the Federal Communications Commission this week approved new rules aimed at trimming the authority of municipalities and states in awarding new licenses.

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