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.
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Staff recommends approval.
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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.