Letter to the PSC regarding Verizon's Petition for Waivers
Written by Joshua Breitbart Wednesday, 25 March 2009 16:26
(See the letter as a PDF.)
Common Cause/New York
Consumers Union
New York Public Interest Research Group
People’s Production House
VIA USPS AND FAX TO (518) 486-6081
July 11, 2008
Hon. Jaclyn A. Brilling
Secretary to the Commission
New York State Public Service Commission
Agency Building 3
Albany, NY 12223-1350
Re: Case Number 08-V-0624, Petition of Verizon New York Inc. for a Certificate of Confirmation for its Franchise with the City of New York (“Verizon-NYC Agreement” or “Agreement”)
Dear Secretary Brilling:
This comment letter is to follow-up on our June 19 letter requesting the New York State Public Service Commission issue a notice inviting public comment regarding the Verizon-NYC Franchise Agreement, which is of significant interest to millions of consumers located in the proposed service area.1
On June 30, we were informed by Mr. Brian Ossias from the Department of Public Service that the required 10-day comment period had closed on June 13 following public notice published in the New York Times, Daily News and Post on June 3. He has since furnished us with a copy of these public notices and informed us that it is the practice of the Secretary to accept comments after the period has closed. It is with that understanding that we submit the following comments regarding the Verizon-NYC Agreement.
PUBLIC INPUT AND PARTICIPATION
Before New York City’s Department of Information Technology and
Telecommunications and the Franchise and Concession Review Committee
Our groups are concerned that the public was not provided with adequate notice of intent by the City of New York to host a public hearing regarding the proposed agreement, nor sufficient time to access and review the agreement itself in advance of that hearing.
When the Agreement was before the City, notice was provided to the public on the following days:
- May 2: Print version of the New York Daily News and New York Post
- May 6: Print version of the New York Post and New York Sun
- April 19-May 20: Print version of the New York City Record
It is unlikely that concerned New Yorkers can scour each of these newspapers each day on the possibility such a notice may run. A box this size with such minute text puts the burden on the interested members of the public to find the procedural equivalent of a needle in a haystack.
Inclusion in the City Record would be helpful but this is not readily available to the general population. An annual subscription to the print version of the New York City Record costs from $500 to $700 annually. The free, online version of the City Record did not include notice of the Agreement.
Nor was the agreement itself readily available prior to the FCRC’s May 20 hearing, the lone public hearing held throughout the duration of this process. The agreement was not available online at the NYC Department of Information Technology and Telecommunications, the NYC Franchise and Concession Review Committee, or any other online outlet prior to this hearing.
The undersigned organizations joined with the Chair of the NYC Council Technology in Government Committee and the Chair of the NYC Council Zoning and Franchises Committee on the steps of the NY City Hall to call on the FCRC to delay its approval of the Agreement pending further public review and improvements to the agreements consumer protection provisions.
Many elected representatives in the New York City delegation of the state legislature, who learned of the Special Public Hearing by personalized notice, specifically and unsuccessfully requested the hearing be rescheduled because it prevented them from the “full opportunity to participate.” (Please find the enclosed letter dated May 14, 2008.)
Despite these calls for more deliberation from good government
groups, media activists, consumer advocates, members of the New York
City Council and the New York State Legislature, city-level approval
came only four business days after the only public hearing, on May 27.
Before New York State’s Public Service Commission
At the state-level, Verizon’s Petition for a Certificate of Confirmation was listed as a New Case before the Public Service Commission (PSC) as of May 26 to May 30. Notice of the Petition appeared on June 3 in the New York Times, New York Daily News and New York Post, activating the 10-day public comment period. It is our understanding that this 10-day comment period is shorter than all other public comment period for issues put before the PSC.
Each copy of the notice included an Albany address for individuals to submit comments regarding the petition. It did not, however, mention that individuals could request additional information or how to go about requesting that information. It did not note the PSC’s phone number or website URL. Presumably, even an individual requesting a copy of the petition by Overnight USPS would have very little time to review the inches-thick document before needing to get their comments into the PSC before the 10-day deadline expired. Online notice could be provided on the website of the PSC, for example.
On June 2, Verizon filed for a waiver of certain rules in connection with the proposed agreement (Case 08-V-0497). Verizon requested waivers of and/or extensions of time to comply with certain requirements of the following sections of the Commission’s rules relating to:
- Provision of cable television service throughout the primary service area within five years and line extensions, (16 NYCRR §§ 895.5(b)(1) and 895.5(c))
- System description and anticipated stages of completion of construction, (16 NYCRR § 895.1(b))
- Installation within seven days of request, (16 NYCRR § 895.5(b)(3) and 890.91(b)(1)) and
- Public, Educational, and Governmental access. (16 NYCRR § 895.1(f) and 895.4)
The public was unable to comment on the substantial issues raised in this June 2 waiver, as it was not published in the New York State Register until May 21 – one day after the NYC FCRC hosted the lone public hearing regarding the Agreement.
We are concerned that the process, as presently configured at both the City and State level does not provide a meaningful opportunity for public review and participation in evaluating this contract.
CONSUMER PROTECTION ROLLBACKS
While we are hopeful that Verizon entering the cable TV market will reduce prices and improve customer service for consumers, the proposed agreement weakens established consumer protection standards. In the 12 years since Congress deregulated the cable industry through the 1996 Telecommunications Act, consumers across the nation have suffered under monopolistic cable pricing that has resulted in a 64 percent increase in rates—approximately two and a half times the rate of inflation. In addition to skyrocketing rates, consumers have virtually no choice of providers or channel offerings. Satellite television, the primary competitor to cable, has had little price disciplining effect. In the few areas where actual facilities-based competition exists, consumers enjoy cable prices that are 15 percent lower than non-competitive markets. (GAO-04-8, p.11)
A citywide franchise system with strong consumer protections and appropriate provisions to meet local needs could help foster new video competition and moderate ever-rising cable rates.
Consumers Union has previously laid out principles that should guide the negotiation of an effective cable franchise agreement, as set forth out below. Unfortunately, many of these points have not been adequately addressed.
An effective cable franchise agreement would:
- Maintain the control of local government authorities over rights of way, collection of franchise fees and enforcement of franchise agreements.
- Require video service providers to serve all consumers within their service territory over time.
- Ensure that existing and future public, educational and government (PEG) stations are carried by video service providers and receive adequate funding to operate
- Establish specific parameters for build out, rate of franchise fees, level of support for PEG stations.
- Require that video service providers maintain and upgrade their networks, and do not abandon communities they currently serve.
- Protect consumers by prohibiting cancellation fees, ensuring available customer service representatives, setting standards for prompt resolution of billing disputes, and guaranteeing credit for service outages.
- Protect the rights of municipal governments to create their own communications networks, and provide financial assistance to deploy publicly-owned communications networks.
- Ensure that communications networks built with or supported by public dollars are open to any competitor at a fair rate.
- Require that any and all communications networks operate under the principle of network neutrality, whereby all content is treated equally and without discrimination.
In addition, in March Consumers Union and New York City Comptroller William Thompson proposed a Cable Consumer Bill of Rights, but only some of the recommended consumer protections were incorporated in the Verizon-New York City agreement, and other existing consumer protections were weakened.
The Verizon-NYC Agreement would be strengthened by requiring:
- All PEG programming be made available through Video on Demand technology, greatly increasing the access everyday New Yorkers have to their government. These channels should be made available in high definition and not be treated as second tier resources.
- Resources for The Technology and Education Fund be dramatically increased, from its current pittance of $4 million for 5 boroughs over seven years.
- Verizon’s requirement to build-out services to lower-income communities be dramatically improved. Pegging the build-out requirement to the median household income, as opposed to the average household income, would amount to dramatic improvements.
- The modified contract must include enforceable penalties built into the contract to insure adequate incentive for timely performance and incentive to correct problems.
The Agreement should strengthen provisions for poor customer service, missed service or installation appointments, and service outages, which should be tripled to 3 * 1/30 of a monthly bill for more than four hours of outage.
In addition, NYC should establish a Cable Franchise Oversight Committee, as has been done in many municipalities throughout the country.
CONCLUSION
The undersigned organizations wish to see a host of procedural improvements made to the way cable franchises are requested, reviewed, and granted at both the New York City and New York State levels.
The common thread in most successful franchise renewal negotiations has been an openness to community perspectives and points of view, where the municipality reaches out to citizens and a wide range of stakeholder groups, including consumer organizations, neighborhood and community groups, public access producers, nonprofit media organizations and libraries, and schools and educational organizations. The municipal authorities should specifically invite and incorporate public input and participation in the negotiation process, in effect making the community a full partner in negotiations. These diverse perspectives are critical for identifying community needs and opportunities, and helping the community to come to a unified judgment about what it wants. With this vital information in hand, the municipality will be much better prepared to effectively protect its interests in the renewal negotiations.
The Verizon-New York City agreement is a first-of-its-kind agreement that will shape the cable marketplace in New York City for many years to come, and is likely to influence future cable franchise agreements in municipalities throughout the state. Unfortunately, the Agreement has yet to receive the full public consideration it deserves.
Some may see the current process of cable franchise public notification as discouraging meaningful public participation. We see it as prohibitive. It has become abundantly clear to the undersigned organizations that improvements must be made to the cable franchising process in New York City, as well as at the state level.
We respectfully urge the Commissioners of the Public Service Commission to give full consideration to the concerns laid out in this comment letter, and send this agreement back to New York City for further public input.
New York City is, or will be shortly, in negotiations with Cablevision and Time Warner cable for franchise renewals agreements. It would be detrimental to New York cable consumers for this process to be replicated through those negotiation processes.
While New York City’s franchising system is unique to municipalities in New York State, analogous arguments could surely be made regarding many municipal franchising procedures and agreements throughout the state.
We thank you for your full consideration and look forward to your reply. If you have any questions regarding this matter, please feel free to contact Chris Keeley at Common Cause/New York at (212) 691-6421.
Sincerely,
Susan Lerner, Executive Director, Common Cause/New York
Russ Haven, Legislative Counsel, New York Public Interest Research Group
Chuck Bell, Programs Director, Consumers Union
Joshua Breitbart, Policy Director, People’s Production House
cc: Governor David Paterson
Paul DeCotis, Deputy Secretary for Energy to Governor Paterson
John A. Figliozzi, Chief, Franchising and Municipal Assistance, Office of Telecommunications, NYS DPS
Brian Ossias, Office of General Counsel, NYS DPS
New York City Comptroller William C. Thompson, Jr.
Bronx Borough President Adolfo Carrion, Jr.
Brooklyn Borough President Marty Markowitz
Manhattan Borough President Scott Stringer
Queens Borough President Helen M. Marshall
Staten Island Borough President James P. Molinaro
NYC Councilmember Gail Brewer
NYC Councilmember Tony Avella
NYS Senator Eric Adams
NYS Senator Martin M. Dilan
NYS Senator Carl Kruger
NYS Senator Velmanette Montgomery
NYS Senator Kevin Parker
NYS Senator John Sampson
NYS Senator Eric Schneiderman
NYS Assemblymember William Boyland Jr.
NYS Assemblymember Alec Brook – Krasny
NYS Assemblymember Karim Camara
NYS Assemblymember Dov Hikind
NYS Assemblymember Hakeem Jeffries
NYS Assemblymember Joseph Lentol
NYS Assemblymember Vito Lopez
NYS Assemblymember Joan L. Millman
NYS Assemblymember Nick Perry
NYS Assemblymember Annette M. Robinson
NYS Assemblymember Darryl Towns
