Verizon adds another big TV partner
Carrier signs a content deal with Walt Disney and its ABC, ESPN and Soapnet units, as it prepares to launch its Fios television service.
Under the agreement, made public Wednesday, Verizon will offer customers of its Fios broadband-over-fiber television service 12 more channels of Disney content, including various ABC-, Disney- and ESPN-branded ones, as well as Soapnet. Verizon will also be granted retransmission consent from television stations that ABC owns and operates.
Verizon has been busy over the past six months racking up content deals before the launch of its television service. It already has agreements with Showtime Networks, A&E Television Networks, NBC Universal Cable, Starz Entertainment Group, Discovery Networks and Movielink, which will offer on-demand movie downloads. The company said it plans to offer customers more than 300 channels of video and audio content.
Verizon's Fios will host the television service as part of its "triple play" offering, which will include voice, video and data services. The fiber network is being built in half the states where Verizon's landline telephone service is available. It will provide more bandwidth than is available over Verizon's existing copper-based network, according to the company.
TV service will begin in some regions within the next two weeks, Verizon CEO Ivan Seidenberg said during an appearance in Boston on Tuesday, according to reports.
Verizon has obtained franchise agreements in Texas, California, Florida and Virginia. The company is expected to announce during a press conference Thursday that Keller, Texas, will be the first town to test the Fios TV service. Keller was also the first community to get Fios broadband service.
Securing content is only one hurdle Verizon has had to overcome in its quest to offer a TV service. Another huge barrier has been local video franchises, which are obtained from individual towns and cities, and grant new entrants in the market permission to offer video services in those communities. These franchise agreements are crucial for Verizon to continue with its plan to offer video service.
Changes to franchise laws would help streamline the process, drastically reducing the time it would take to offer new service in a particular community. Verizon has been actively lobbying at both the state and federal level for change.
"We already have the network to provide voice and data," Seidenberg said Wednesday in a speech to the Suffolk Nassau Chamber of Commerce. "Now we have to go through an additional process in each individual town just to provide video over the same pipe. It makes no sense."
Cable companies argue that laws granting blanket franchises would give telephone companies an unfair advantage, because cable companies have traditionally been expected to negotiate contracts with local municipalities.
Earlier this year, Verizon got a boost in Texas with the passage of a law that allows it to obtain a statewide franchise. Other states, such as New Jersey, are considering similar legislation.
The stakes are high for Verizon and SBC Communications, another Baby Bell phone company also planning to enter the television market. These companies have been spending billions of dollars to upgrade their networks to offer video service.
They hope that with an infrastructure that also handles video service, they can compete better against the cable companies, which have already begun offering telephone service over their broadband networks.