New Jersey to Let Phone Companies Become Pay Television Providers

NEW JERSEY TO LET PHONE COMPANIES BECOME PAY TELEVISION PROVIDERS
[SOURCE: New York Times, AUTHOR: David Kocieniewski]
New Jersey on Friday became the sixth state to allow telephone companies to provide pay television service, setting the stage for head-to-head competition between telephone and cable companies for the state’s 2.5 million cable subscribers. The new law, which Gov. Jon S. Corzine (D) said was intended to offer consumers more choices and lower prices, will also ease telephone companies’ entry into the television market by allowing them to apply for a single statewide franchise license instead of negotiating with each of New Jersey’s 566 municipalities. It is the latest example of how converging technology is provoking furious competition among utilities across the country. The immediate beneficiary of the law is Verizon Communications, which will now be permitted to use the fiber-optic network it is building across the state. Verizon’s network currently reaches fewer than 500,000 homes, but the company has pledged to spend $1.5 billion to expand it to offer service to 3.5 million households by the end of 2008. The victory for Verizon and other telephone companies came after a lobbying and public relations battle against the state’s two major cable providers, Cablevision and Comcast. The cable companies had warned that by awarding telephone companies a statewide franchise, New Jersey would be depriving municipalities of tax revenues and the ability to regulate the service in their communities.
http://www.nytimes.com/2006/08/05/nyregion/05cable.html
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