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Verizon moves to expand its cable-TV service

08:40 AM EDT on Thursday, August 23, 2007

By Timothy C. Barmann
Journal Staff Writer

State regulators have given Verizon Communications the first of three approvals required before the company can begin offering fiber-optic cable television service in 12 more Rhode Island communities.

The decision to grant Verizon “certificates of compliance” for Service Areas 2, 3 and 8 brings the company a step closer to offering its FiOS cable service to 158,000 more households in the state.

The company already has permission to provide the service in Service Area 6, a region with 79,600 households in the West Bay area.

In March, the company applied for cable franchises in those three service areas, which include Providence, Charlestown, Cranston, Foster, Hopkinton, Johnston, Narragansett, North Providence, Richmond, Scituate, South Kingstown and Westerly.

State regulators have divided the state into nine cable-TV service areas, and any potential provider must get permission from the state for each area where it wants to provide service.

Obtaining that permission is a three-step process that can take from several months to more than a year. Potential cable providers must get three different approvals from state regulators. Verizon has now completed the first of those three requirements. The company has said it expects to receive final approvals in time to begin service this fall.

This spring, regulators gave Verizon the final go-ahead to begin offering FiOS service in Service Area 6 that includes Coventry, East Greenwich, Exeter, North Kingstown, Warwick, West Warwick and West Greenwich. The company turned on the service there in June.

The Division of Public Utilities and Carriers is the state agency that oversees cable companies and issued a 54-page order granting the three certificates on Tuesday. It was signed by John Spirito Jr., the hearing officer in the case; and Thomas F. Ahern, administrator of the DPUC.

Even though the agency had already determined that Verizon was willing, financially able and technically qualified to be a cable operator during earlier deliberations about Verizon’s application for Service Area 6, the agency was required to go through the process again for the other service areas.

The DPUC held public hearings in May and June, and noted that 12 people offered comments during those sessions, and all were in support of Verizon’s application.

The only issue of significance that arose was a request by Cox Communications that the agency hold off giving Verizon the compliance certificates until an issue involving costs incurred by Cox to deliver certain community programming was settled. Cox told the regulators that it maintains 16 video feeds that transport public and governmental access shows from remote locations to the public access studios. It said that for Cox to pick up all the costs of providing and maintaining these feeds is unfair.

In its order, the DPUC rejected Cox’s argument, saying that the company could not provide figures as to how much it costs to maintain these feeds, and also said that the issue should be resolved through other means, such as a separate filing by Cox.

In its application, Verizon agreed to abide by an agreement reached in October between that company, Cox and the DPUC that requires Verizon to make payments to provide continuing support of public access facilities and programming.

As of the beginning of this year, administration of public access programming was shifted to the Rhode Island Public Telecommunications Authority, a new agency created by state law. Both Cox and Verizon supported the legislation, which allows cable companies to share the cost of operating public access studios. Without that change, Verizon would have been required to build its own public access studio in each service area, duplicating existing studios established by Cox.

Verizon still needs two more approvals in Service Areas 2, 3 and 8, before service can begin. One is a “construction certificate,” which gives Verizon permission to build its cable network. That approval is essentially perfunctory, as Verizon’s network is already in place. The company is delivering video services over the same network it uses to offer telephone service.

The final approval is the “operating certificate,” which is granted after any outstanding issues are resolved. At that point, Verizon can begin service.

Lillian McGee, a spokeswoman for Verizon, said yesterday that the company hopes to gain the final approvals by the end of the year.

She said the company still plans to seek permission to offer cable service statewide, but the company has not yet decided which service areas it will apply for next.

tbarmann@projo.com

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