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
•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
Why Does Lakeville Need $$ from
1. In January of 2011 our license with Comcast
2. We know that all cable companies, including
Comcast, are looking to eliminate their
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
(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
“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,
Impact of Ignoring “Level Playing
• Comcast will likely seek equity.
• Lakeville will lose money and studio support
• Lakeville will struggle to launch needed
Access Corporation w/o enough money.
1. April 2005—Original meet-and-greet
2. August 2005—Received Form 100 from
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.
5. LCAC studied 12/05 Verizon license
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)
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.
11. 9/13/06—Met w/ Verizon to discuss
remaining open issues. Still have NOT
received requested “understandable”
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.
14. Late October/early November, much
discussion w/ P. Epstein and LCAC re: latest
15. Early November—discussions between P.
Epstein and Verizon.
16. 12/13/06—conference call: LCAC, Verizon,
P. Epstein—negotiations re: 20 open issues.
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.
19. 2/9/07—After multiple requests for Verizon
positions, email from P. Epstein re latest V
20. 2/21/07—Meeting w/ Verizon to clarify their
21. 3/13/07—This meeting.
Term of License
1. Open to 15 yrs. subject to 1. 15 years
other issues being
resolved, but presently at
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.
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. $
Gross Annual Revenues (cont.)
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.
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 $
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
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!
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.
• Verizon refuses any
• LCAC has tried to get payout.
$ payout in its place.
• Will get back to us.
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
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
• LCAC finds this and advise the Subscriber
totally unacceptable. of the results of that
Outstanding Issues-9 (cont.)
• 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.”
• “’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
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.
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.
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.
4. Verizon presently supporting a bill in the
Statehouse that would force municipalities
into a 90 day decision.
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.
What would have happened IF Verizon had
made a “level” offer that matched Comcast’s
LCAC would have recommended that the BOS
sign the license asap.
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?
April 9th hearing?
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
2.This we see as totally UNACCEPTABLE!
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
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.
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
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
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.
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.