After gaining final approval to rollout FiOS in New York City a few weeks ago, Verizon has come to a preliminary agreement with the District of Columbia to deploy FiOS television service in the nation’s capital. This long-awaited announcement follows nearly a year of negotiation between Verizon and D.C. franchising authorities.
Thanks to its especially onerous franchising regime, the District of Columbia has lagged behind surrounding areas in fiber-optic connectivity. Neighboring communities such as Arlington, Fairfax, and Bethesda have had FiOS for years, and D.C.’s lack of fiber-optic service has long been a sore spot for the city.
D.C. residents can’t celebrate just yet, though. Verizon must overcome one more regulatory hurdle before starting to dig up the streets. The franchise agreement must receive a green-light from both the D.C. city council and the Attorney General. If the New York City episode is any indication, getting politicians to acquiesce will involve expensive demands and forced concessions, resulting in higher prices for everyone.
As the nation’s second largest telecom, Verizon has the resources and legal know-how needed to navigate the municipal franchising process. But what about the entrepreneur who simply wants to offer service to a single neighborhood? Because of build-out requirements, revenue-sharing provisions, and other artificial entry barriers, it’s no wonder that there are so few new players in last-mile service. Getting permission to bring new television service to a community should be simple and straightforward, not costly and drawn-out.
We often hear complaints about the lack of choice in broadband and television service, but governmental attempts to enhance choice are mistakenly focused on prying open incumbent networks to let competitors leech off existing infrastructure. But as Verizon has demonstrated, what’s really needed is more infrastructure competition. Laying redundant sets of wires does have duplicative costs, but these are outweighed by the competitive benefits of greater choice. There’s room in the marketplace for multiple television and broadband providers. Last-mile service is not a natural monopoly.
Adding FiOS to the mix will bring the benefits of greater competition to D.C. subscribers. In northern Virginia, a fierce rivalry between Verizon and Comcast has pushed prices downward, even for consumers whose residences have yet to be “lit.” Cable companies have responded to FiOS with infrastructure upgrades focused on the most competitive markets. Comcast’s Blast! tier, which offers a 16mbps downstream pipe for about $50 a month, is available across Arlington and Fairfax counties, while most subscribers residing outside of the FiOS footprint can only get up to 8mbps.
Competition works, and consumers deserve more of it. Franchise reform, along with spectrum liberalization, must play an essential role in any legislative attempt to improve last-mile residential communications services in the United States.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.