VIEWS: 7 PAGES: 41 POSTED ON: 5/2/2012
Negotiations With Verizon Trying to get to Yes! •Please keep in mind that, while “negotiating,” Verizon has been lobbying on the national, state, and local level from the beginning. •Verizon has complained bitterly to Congress, the FCC, DTE (cable div.), state legislators, and citizens that towns have dragged their feet and made outrageous demands. •Lakeville has NOT! What are our goals? 1. Competition between cable companies that results in lower prices/better service. 2. A fair deal. 3. A zero net loss in revenue, studio support, and capital funding, which we know will be necessary to fund upcoming Access Corporation. Why Does Lakeville Need $$ from Verizon/Comcast? 1. In January of 2011 our license with Comcast expires. 2. We know that all cable companies, including Comcast, are looking to eliminate their access studios. 3. We’ll need $ in order to fund our own Access Corporation in order to broadcast ANY town activities (e.g. Town Mtg., BOS/BOH mtgs., Graduation, etc.) “Level Playing Field” Language Comcast License (Sec. 2.3b, pg 10 of Comcast’s License): “The grant of any additional cable television license(s) shall not be on terms more favorable or less burdensome than those contained in this Renewal License. The grant of any additional cable license(s) shall be at the sole discretion of the Issuing Authority.” “Level Playing Field” Language Comcast License (cont.) (Sec. 2.3bii, pg. 10 of Comcast License): “Should the Licensee demonstrate that any such additional cable television license(s) have been granted on terms and conditions more favorable or less burdensome than those contained in this Renewal License, the Issuing Authority shall consider and negotiate, in good faith, equitable amendments to this Renewal License.” “Level Playing Field” language recognition by Verizon Proposal (9/27/06) (Page 2, para. 1) “WHEREAS, the Issuing Authority exercised diligent efforts to ensure the terms and conditions in this Final License are, in light of all relevant circumstances, not more favorable or less burdensome than those terms and conditions contained in the Cable Television Renewal License, dated January 29, 2001, granted to… “Level Playing Field” language recognition by Verizon Proposal (9/27/06) cont. …MediaOne of Massachusetts, Inc., which is offering service as Comcast [______], and the Issuing Authority has made findings reasonable demonstrating such equivalency of overall benefits and burdens…NOW, THEREFORE,…THE SIGNATORIES…DO HEREBY AGREE…” Impact of Ignoring “Level Playing Field” Language • Comcast will likely seek equity. • Lakeville will lose money and studio support • Lakeville will struggle to launch needed Access Corporation w/o enough money. Time Frame-1 1. April 2005—Original meet-and-greet 2. August 2005—Received Form 100 from Verizon. 3. November 2005—BOS responded with IAR (Issuing Authority Report). 4. December 2005—Received first original proposal from Verizon. Draft was NOT in format requested, barely understandable. Time Frame-2 5. LCAC studied 12/05 Verizon license proposal. a. Many conflicts/contradictions. b. Very difficult to understand. 6. 2/21/06—LCAC wrote to Verizon, requesting new, understandable draft. 7. NO RESPONSE UNTIL 7/20/06! (Keep in mind lobbying on all fronts by Verizon) Time Frame-3 8. 07/20/06—Received Verizon letter requesting resumption of negotiations, saying they were “eager” to sign a license w/ Lkvl. (Note proximity to DTE hearing of 8/16/06) 9. 08/04/06—First sit-down meeting w/ Verizon—First real negotiations. 10. 8/29/06—Met w/ Verizon re: 31 open issues that LCAC can decipher. Time Frame-4 11. 9/13/06—Met w/ Verizon to discuss remaining open issues. Still have NOT received requested “understandable” proposal. 12. 9/27/06—Received “understandable” Verizon proposal. LCAC took under advisement/studied it further. 13. Lkvl’s atty. (P. Epstein) on vacation through much of October. LCAC continues study. Time Frame-5 14. Late October/early November, much discussion w/ P. Epstein and LCAC re: latest proposal. 15. Early November—discussions between P. Epstein and Verizon. 16. 12/13/06—conference call: LCAC, Verizon, P. Epstein—negotiations re: 20 open issues. Time Frame-6 17. 1/03/07—conference call—LCAC, Verizon, P. Epstein re: 19 issues. 18. January 2007 phone calls back and forth between LCAC, P. Epstein, and Verizon re confirmation of movement by Verizon/LCAC. Frequent requests by LCAC for Verizon confirmation of their positions during this time. Time Frame-7 19. 2/9/07—After multiple requests for Verizon positions, email from P. Epstein re latest V positions. 20. 2/21/07—Meeting w/ Verizon to clarify their positions. 21. 3/13/07—This meeting. Outstanding Issues-1 Term of License Lakeville Verizon 1. Open to 15 yrs. subject to 1. 15 years other issues being resolved, but presently at 10 yrs. 2. Request for Lkvl to make 2. LCAC will not get written request for involved in “interconnection” “interconnection” issues resolution between between Comcast and Comcast and Verizon. Verizon. Outstanding Issues-2 Gross Annual Revenues 3. Lakeville 3. Verizon a. 10 yrs. @ 4.5% of a. 15 yrs. @ 2.5% GAR plus fees or 15 of GAR including fees yrs pro rata. (Includes “until such time as value of present studio Comcast renews its space.) license and provides different funding prior b. Needed $ for Access to such renewal. In the Corp. when Comcast event of different License expires. funding, Verizon will match said funding.” b. 10 yr @$102,884, incl. Vid On Dem. $ Outstanding Issues-3 Gross Annual Revenues (cont.) Lakeville Verizon 3.(cont.) Gross Ann. Rev. 3.(cont.) Gross Ann. Rev. c. Includes $27k (1%), c. Unwilling to pay $31693 (stu. budg., value of existing cust. $34963 (pres. office serv. office. Will be costs.)=approx. 3.5% paying cust. serv. $ in d. Value of present other ways. studio space=?? d. Unwilling to pay value of studio space. Outstanding Issues-4 Capital Funding 4. Lakeville (10 yrs., but 4. Verizon (15 yrs.) open to 15) a. 10 yrs @ $95k or a. $102,884 ($50k+ $142,000/15/yrs, $48k+$4884)/10 yrs. (Had been $147,000 at b. If 15 years, then 8/4/06 meeting) Verizon should pay b. 10 yrs @ $102,884, pro rata ($154,326) incl. VOD $ Outstanding Issues-5 Inspection of Books 5. Lakeville 5. Verizon Sec 8.1—BOS has right Verizon has not yet to inspect books “at a agreed to confirm a location reasonably location after saying at convenient to the least 3 times that they’ll parties.” LCAC agreed “look at it.” to Boston. b. “mutually convenient location but no farther than Boston.” Outstanding Issues-6 Liquidated Damages 6. Lakeville 6. Verizon (Cap or no cap?) Verizon demands a LCAC fought long and $10,000 cap on all hard because of trouble damages. Reason: w/ AT&T service in “Corporate policy.” 2002. LCAC moved a great deal on this issue, but b. Agrees to $25K cap on amount ($50k) was Liquidated Damages. unacceptable to Verizon. • Comcast has no cap! Outstanding Issues-7 Senior Citizen Discount 7. Lakeville 7. Verizon • LCAC feels that, • Verizon sees it as “a form since Comcast offers of rate regulation” and one, Verizon should refuses to sign a license also. (Level playing with a senior citizen discount of any kind in it. field language) • Verizon refuses any • LCAC has tried to get payout. $ payout in its place. • Will get back to us. Outstanding Issues-8 Customer Service Office 8. Lakeville 8. Verizon Presently exists in Will NOT consider such Comcast License. an office until there is a LCAC wants from “need” determined by Verizon at least the Verizon. Will NOT pay $34963 Comcast the money as part of the presently pays. GAR. b. Agree to build w/in 18 mos. but no $ (1% GAR) if they don’t build. Outstanding Issues-9 Subscriber Complaints 9. Lakeville 9. Verizon “’resolve’ means that the • Present Verizon Licensee shall perform language will NOT those actions, which, in the guarantee resolution of normal course of business, are necessary to subscriber complaint. investigate the Subscriber’s Complaint • LCAC finds this and advise the Subscriber totally unacceptable. of the results of that investigation.” Outstanding Issues-9 (cont.) Subscriber Complaints • Comcast Language: • Verizon language: “Upon reasonable notice, “resolve means that the the Licensee shall Licensee shall perform those expeditiously investigate actions, which, in the normal and resolve all Complaints course of business, are regarding the quality of necessary to investigate the Service, equipment Subscriber’s Complaint and malfunctions, and similar advise the Subscriber of the matters.” results of that investigation.” Subscriber Complaints Solution?? • “’resolve’ means that the Licensee shall perform those actions, which, in the normal course of business, are reasonable to investigate and effect a reasonable (and timely—strike) solution to the Subscriber’s Complaint and to advise the Subscriber of said solution.” Verizon Lobbying-1 Nationally: 1. Congress—Force towns into 90 day decision. Congress turned it down. 2. FCC—Force towns into 90 day decision. FCC, in 3-2 vote, along party lines, approved it but, to date, has not published it so that it can be challenged. Verizon Lobbying-2 Nationally (cont.): 2. (cont.) There are serious questions about whether the FCC has the power to change legislation by their regulation. Presently being scrutinized by Congress and others. Very likely to be challenged. Verizon Lobbying-3 In Massachusetts: 3. Solicited DTE (cable division) to force 90 day decision by towns. Hearing on 8/16/06. Over 30 municipalities, including Lakeville, testified. At present, no decision. Verizon Lobbying-4 In Massachusetts: 4. Verizon presently supporting a bill in the Statehouse that would force municipalities into a 90 day decision. At present…pending. Verizon Lobbying-5 In Lakeville: 5. Website used to encourage letter- writing/”complaining” to Town Hall. 6. Flyers mailed to encourage letter-writing. 7. Citizens calling Town Hall to report Verizon has told them that the town is to blame for there being no license/competition yet. Question: What would have happened IF Verizon had made a “level” offer that matched Comcast’s license? Answer: LCAC would have recommended that the BOS sign the license asap. Question: What would have happened by now IF Verizon had focused all of that lobbying money and manpower on negotiating with all cities/towns? with Lakeville? Recommendations: April 9th hearing? Resume Timeline 1.Less than one week after the March 13th meeting w/ Lakeville Subscribers, Verizon threw a new wrinkle into our negotiations. They said, “If they have to pay Comcast in order to connect to our PEG channels, that money would be taken out of our 2.5% GAR money.” 2.This we see as totally UNACCEPTABLE! Resume Timeline 3.Our cable attorney is unaware of any other town in the Commonwealth who has this kind of language in their license. Why Lakeville? 4.The LCAC sees this as Verizon going back on its word, introducing this into the negotiations at this late date. 5.We told Verizon that this was unacceptable, and have not heard a word directly from them since. Resume Timeline 6. On June 5th, the Mass. House and Senate subcommittee on telecommunications held a hearing on Verizon’s bill to require all Mass. cities/towns to decide w/in 90 days on all Verizon licenses. At that hearing Verizon reps. told the committee that, in the bill, cities/towns would be able to require 6% of Verizon’s GAR be paid to the town. This is NOT what Verizon is offering Lakeville, and is misleading at best. Resume Timeline 7.In mid-June a Verizon rep called the BOS’s office to set up a meeting with the BOS to ask them whether they were “satisfied” with the way negotiations were being handled by the LCAC. 8.When our town administrator told him what Verizon’s own positions were and that the BOS had been kept very aware of what was happening, he NO LONGER WANTED THE MEETING. Resume Timeline 9. In early July a Lakeville subscriber called Bob Marshall (chairmn.) to ask what the status of Verizon negotiations was. After telling him all of the above, Bob invited him to call the Verizon rep who had wanted the BOS meeting to find out where things stood with Verizon. 10. He said he was told that things were “progressing” well and things “should be wrapped up soon.” When Bob called, he got a slightly different answer. Resume Timeline 11. He told Bob that the Verizon negotiator would be hearing from his boss and we should be hearing from him soon. 12.In mid July, Bob contacted our cable attorney to make sure he knew and to ask if he had heard anything. He had not. 13.That’s where things stand as of 7/17/07.
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