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Verizon wins state TV franchise

The phone firm plans to sell video service in some Southern California cities as early as April.

March 09, 2007|James S. Granelli | Times Staff Writer

Verizon Communications Inc. won approval Thursday from state regulators to sell TV service in as many as 45 Southern California cities.

The approval by the Public Utilities Commission was the first under the state's new video franchising law, which stripped local governments of their jurisdiction over applications to provide pay-TV service and gave it to the PUC.

Verizon plans to disclose in a few weeks which cities it will serve first, said Timothy J. McCallion, the company's Pacific region president. Service in those communities could be up and running in a month.

McCallion declined to reveal how many cities would be in the first wave, saying only that it would include many of the 45 municipalities covered by the regulatory approval.

The company is required by law to notify cities at least 10 days before it starts to offer service.

Verizon is the state's second-largest local phone company, serving 2.4 million homes, primarily in Southern California beach communities as well as about 15% of the city of Los Angeles.

The carrier has been installing fiber optic lines in dozens of Southland cities, an expensive undertaking designed to take the high-speed connections into each home.

Verizon plans to spend $18 billion over six years to increase its fiber coverage to 40% of its customers in 28 states by the end of the decade.

The cost has shareholders worried about whether the company can recoup its investment.

"We do need to get customers to demonstrate that this is the right strategy," McCallion said. "We think this is the best network available."

The PUC's quick response to Verizon's application, filed a week ago, sets a tone for what the state expects from Verizon and AT&T Inc., the state's dominant local phone company.

"The PUC is trying to say it wants ... competitors to cable TV yesterday," said Blair Levin, a telecom analyst at Stifel, Nicolaus & Co. in Washington.

AT&T filed its application Wednesday.

"As new companies enter into the video marketplace, we believe California consumers will benefit from more choices in programming and service options," said Steve Larson, the PUC's executive director.

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