Verizon ended Comcast’s cable monopoly in Philly 15 years ago. The city plans to give Fios 5 more years.
The renewal of the franchise, which allows the company to build and maintain its network in public right-of-way, is the first since Verizon was initially approved to operate in Philly 15 years ago.
Fifteen years ago, Mayor Michael A. Nutter and City Council ended Comcast’s effective monopoly over cable and internet services in its home city by allowing Verizon to build out its Fios network in Philadelphia.
That deal, which was approved following contentious negotiations with lawmakers, is up for renewal this year. But it appears likely to pass without the drama of the 2009 talks.
A Council committee on Wednesday advanced legislation to extend for five years Verizon’s franchise agreement, which allows the company to build and maintain its network in city-owned right-of-way. It now heads to the full Council, which is expected to pass it before adjourning for its summer break in June.
“Ultimately, this agreement is advantageous for all citizens of Philadelphia as it addresses the growing importance of broadband connectivity in narrowing the disparity between individuals who have online access to information and resources and those who do not,” Melissa Scott, Mayor Cherelle L. Parker’s chief information officer, told Council.
Negotiations over the deal began under former Mayor Jim Kenney’s administration. Verizon’s original franchise was originally set to expire in February, but it was extended until August as Parker’s administration took over negotiations for the city.
Aside from that delay, it’s been a smooth path for the renewal. That’s a far cry from 2009, when lawmakers questioned whether Verizon would build out its network in disadvantaged neighborhoods at the same rate as wealthy ones and Comcast suggested its new competitor wasn’t being held to the same standards it was.
Under the renewal legislation, which was introduced by Councilmember Quetcy Lozada on behalf of Council President Kenyatta Johnson, Verizon will continue to pay the city 5% of its gross revenue from Philly cable customers, the maximum rate allowed under federal law. Over the last five years, the fee has brought in about $6.7 million per year to city coffers, Scott told Council on Wednesday.
Franchise renewals are opportunities for the city to push companies to pay for additional community benefits. Under the extension agreement, Verizon has agreed to provide a $500,000 grant to the city for digital equity efforts, public safety initiatives, and other uses.
The deal also involves Verizon building out publicly accessible 1G broadband internet service to 183 Philadelphia Parks and Recreation facilities at a cost to the city of about $5 million over five years. Additionally, Verizon will extend the city’s internal network by installing dark fiber connection at the same facilities, with a price tag of $7.6 million over five years.
“This means numerous students can access educational tools, easily stream videos, download or upload assignments and play video games with their friends,” Eric Fitzgerald Reed, who leads Verizon’s public policy and state government affairs team, told Council. “Residents will be able to conduct telehealth consultations with their physician or participate in remote job interviews.”
Verizon spokesperson Chris Serico said the rec center plan was, to the company’s knowledge, “the first of its kind in the country.”
The company will continue to support the city’s public access television services by providing $8 million in grants over five years that will be spent on the school district’s PSTV; the city’s PHLgovTV; and PhillyCAM, the city-designated nonprofit that operates Philly’s public access channel.