Rhode Island news
R.I. cable TV battle ready to erupt
10:54 AM EDT on Monday, June 4, 2007
Verizon Communications is on the verge of fulfilling a promise it made more than a decade ago: offering cable TV service in Rhode Island. That will begin a fierce competition with Cox Communications, for years the state’s dominant cable provider, and give consumers a chance to weigh both services.
Verizon has won final approval from state regulators to begin service as early as Tuesday in seven communities in the West Bay area. But the company has not yet announced exactly what day service will start. The company was still finalizing its channel lineup and package prices late last week, said Phil Santoro, a company spokesman.
It was back in 1994 that Verizon’s predecessor, NYNEX, announced it would offer cable TV service in parts of Rhode Island. Soon after, the company actually began to string fiber-optic cable through some Warwick neighborhoods. That ambitious plan never came to fruition because the company decided at the time it was too costly.
Now, Verizon can’t afford not to expand into cable television. The company has seen its traditional telephone business steadily erode because of competition from other firms, such as Cox Communications, which began offering phone service here in 2000. Competitors controlled 43 percent of all telephone lines in Rhode Island last year, according to figures from the Federal Communications Commission. A decade ago, Verizon had a virtual monopoly on phone service.
In addition to Rhode Island, Verizon has entered the cable TV business in California, Delaware, Florida, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Texas and Virginia.
Verizon’s challenge here will be to convince potential customers that its offerings are competitive with those of Cox Communications, the company that provides service to 98 percent of all cable customers in Rhode Island.
For now, Verizon may offer the service only in Service Area 6, which includes 79,600 households in Coventry, East Greenwich, Exeter, North Kingstown, Warwick, West Warwick and West Greenwich.
The company has also applied for licenses to serve Service Areas 2, 3 and 8, which include 158,000 households in Charlestown, Cranston, Foster, Hopkinton, Johnston, Narragansett, North Providence, Providence, Richmond, Scituate, South Kingstown and Westerly. The last scheduled public hearing for those applications is set for Thursday. The company could get final approval for those three areas as soon as this fall, said Eric Palazzo, the Division of Public Utilities and Carriers’ associate administrator for cable television.
Verizon hasn’t released details about how much its service, called FiOS TV, will cost or what channels will be available. But the company has said it is likely to mirror its offerings and prices in Massachusetts.
There, Verizon’s expanded tier, which it calls FiOS TV Premier, is $47.98, including $4.99 for the required set-top box rental. That package has about 160 channels, including traditional cable staples such as CNN, the Discovery Channel, ESPN and Disney. Those with high-definition televisions can also receive 22 high-definition channels by renting an HD set-top box for an extra $5 a month.
A similar offering by Cox would be its Standard Service combined with Digital Gateway at $56.05, including set-top box rental. That comes with 115 channels, including 15 high-definition channels. (HD set-top box rental does not cost extra.)
But neither company wants customers to buy just TV service. They are both offering package deals that provide discounts if a customer also subscribes to Internet and telephone service.
In Massachusetts, Verizon now offers a three-service package deal for $99 a month. That includes unlimited local and long-distance calling, high-speed Internet access, plus the FiOS TV Premier service. That is a promotional price, which will last for two years. The current regular price for that package is $127.97.
In Rhode Island, Cox also has a three-service package for $99. That includes Standard Service, Digital Gateway, phone service with unlimited in-state calling, and a medium-speed Internet access. To get unlimited out-of-state long-distance calling and a faster Internet connection, the total would be $117.99, according to Cox. New customers can get a discount for these packages for two months.
There are many other features and fees to consider when shopping between the two.
For example, the rates for some premium movie channels, such as HBO and Showtime, are lower with Cox, compared with Verizon’s Massachusetts pricing. And Cox does not require a long-term contract as Verizon does for some of its services. Cox has its own channel that it produces devoted to local sports teams. And Cox may be cheaper if a customer has more than one TV set and does not want to rent a set-top box for some or all of the sets. (Verizon requires a set-top box for all TVs.)
On the other hand, Verizon’s basic price for video service is likely to be less expensive, includes more standard and high-definition channels, and has more video-on-demand titles for rent. Its $99 promotional package includes more telephone add-ons, such as call waiting, voice mail and caller ID, as well as unlimited national long distance. And the included Internet access is faster.
Customers are likely to hear a lot from Verizon about how its service is delivered over a fiber-optic cable that goes directly to a customer’s home, which the company says will allow them to bring customers more channels and better-quality pictures.
It is true that fiber-optic cables, which use pulses of light to transmit information, have more capacity than the coaxial cables that most cable companies use. Cox also uses fiber-optic cables, but those extend just to the neighborhood level; the company uses coaxial cables made of copper for the final link to a customer’s home.
“There’s a huge difference between what you can do with a fiber cable than what you can do with a coax cable,” said Phil Santoro, a Verizon spokesman.
But Cox discounts that claim.
“Their network is different, but that doesn’t mean it’s better than ours,” said John Wolfe, a spokesman for Cox. “We’ve built an extendible network capable of delivering services our customers say they want, when they want them.”
As for the fact that Verizon will offer more high-definition channels than Cox, Wolfe said that is not necessarily a reflection of network capacity. Decisions about which HD channels to offer sometimes come down to whether a particular channel is compelling, Wolfe said. Other times, it’s a matter of whether Cox can secure the broadcast rights.
As for picture quality, Wolfe said that it will be virtually the same as Verizon’s. Cox recently completed a year-long upgrade of its network so that customers who subscribe to digital service now receive all channels in digital format, he said.
“If you get 100-percent digital, it’s going to come across crystal clear,” Wolf said.
“Their network is different, but that doesn’t mean it’s better than ours.”
>spokesman for Cox
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