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HomeMy WebLinkAboutAM Granting a cable television franchise to Verizon SouthwestTOWN OF WESTLAKE To: Honorable Mayor and Members of the Board of Aldermen From: Trent Petty, Town Manager Subject: Regular meeting of January 10, 2005 Date: January 7, 2005 Consider an Ordinance granting a cable television franchise to Verizon Southwest. g 1[4 [1la 1►/ 1 a I►ii7_�i7► Staff recommends approval. aw�1 fl ► ii7 For several months staff has been working with the Town Attorney and the Town's legal consultant for telecommunication issues, Clarence West on a cable TV franchise for Verizon. The process began with a meeting attended by Mr. West in Grapevine where Westlake, Grapevine, Colleyville, Southlake, Keller and Irving all met to discuss how this service would be rendered in each community. This is the first time the Town has considered a request by a telecommunications common carrier as defined by Title II of the federal Communications Act to provide video signal. Verizon has chosen to offer this service as a result of its deployment of a fiber FTTP Network which uses laser -generated pulses of light to transmit voice, data and video signals at speeds and capacities far exceeding today's copper -cable systems. Not every city mentioned above is ready to adopt this franchise agreement. The primary concern of all the cities is the request by Verizon to offer services to residents within its Service Area as opposed to every resident in the community. This "build -out" provision has historically been an important inclusion in all television cable franchise agreements. The Board is aware that the Town of Westlake currently has two franchisees that have not been willing to serve the entire community as required in their franchise agreement. The result is an expired franchise with one and no action by the other illustrating that these companies do not intend to offer these extensions in a cost effective manner until they believe market conditions guarantee them the profit they expect to offset their costs. Verizon's reason for requesting that the franchise only extend to customers within their service area is that Verizon has not yet made the decision to exceed the recognized telephone service boundaries that have been long observed by Verizon and the other common carrier serving Westlake, SBC. Since customers in Westlake are very much demanding that cable TV services be offered, the staff sees this as an opportunity to increase the coverage of cable TV services to areas currently un -served without having to spend hundreds of thousands of dollars in litigation costs to attempt to force the other franchisees to serve these un -served areas. Moreover, it is believed that by increasing the coverage and service within Westlake, the area will become more competitive for bundled services and the market will take care of additional expansion into un -served areas. Verizon made it very clear early on in the negotiations that if the municipalities required them to build out across their service boundary that they would not agree. SBC has already announced that they intend to provide video signal via fiber as well, so staff feels it is only a matter of time before the service boundaries dissolve under the weight of the competitive market. Verizon is going to pay the town 5% in gross revenue and include customer service standards and the standard service protection and oversight mechanisms the Board is accustomed to seeing in cable TV franchise agreements. This service will be deployed in Vaquero first but will ultimately serve all customers within the Verizon primary service area. Verizon will also provide educational and governmental programming for facilities inside its service area and has committed in the agreement to provide those services to all facilities if and when it decides to go beyond their service boundary. Both Mr. West and Mr. Lowry have approved the attached franchise agreement with the caveat that the Town understands that the franchise does not contain a build out provision. Verizon has proposed a term of 15 years for the franchise. Staff has cautioned Verizon that the Board may prefer a 10 year agreement. Mr. Larry Manion of Verizon will be present to speak at the Board meeting and answer questions.