The New York City's Mayor de Blasio (D) Administration, will attempt to shake up the Market for Broadband by introducing more Licenses for Providers, a move that is part of an Effort to Expand affordable High-Speed Internet Access to the Millions without it.
The City Council, on Thursday, Passed a Mayor-backed Bill that will Allow the City to Solicit New Franchise Agreements, through which Companies will Pay to Install and Maintain the Infrastructure required to deliver Broadband, Telephone, and Cable Service.
"The hope is that by bringing additional players to the broadband market, we can spur some competition in New York City and drive prices down," said Jessica Tisch, Commissioner of the Department of Information Technology and Telecommunications, which Oversees Franchise Agreements.
Charter's Spectrum, Altice's Optimum, and Verizon's Fios, Dominate New York's Broadband Market. The Companies built those Networks through Existing Infrastructure and Franchise Agreements established for Cable Television. Verizon agreed to Expand Broadband to 500K City Homes under a Court SDettlement and the Mayor will Expand Internet to 600k Underserved New Yorkers.
"That puts companies that don't provide cable but want to provide broadband at a real disadvantage," Tisch said. "The point of this resolution is to correct that."
The Last Council Authorization for Franchise Agreements Expired in 2018, at which point 20 Companies were providing $7 Million in Annual Revenue through the Deals. Those Companies are now operating under Holdover Agreements.
The Council's Authorization will allow City Hall to Negotiate New Franchise Contracts. Those Deals must include Provisions encouraging Affordable Pricing, as written in the Bill, with Security Deposits the City can Collect if the Companies Don't live up to the set Goals.
The de Blasio Administration will set those Terms through a Solicitation for New Franchises, which Officials hope to Publish early next year. It's Not clear at this point how many New Franchisees could enter the City, but Tisch said Several Companies had already Expressed Interest.
Within the City's Five Boroughs, 29% of Households do Not have a Home Broadband Subscription. Among Households below the Poverty Line, the Percentage without Home Broadband climbs to 50%.
The Number of Providers available to New Yorkers is strongly Correlated to the Wealth of their Neighborhood. Areas that have Three or More Broadband Provider Options have, on average, Household Incomes 50% Greater than Households in Areas with only Two Providers.
That Data comes from the Mayor's Internet Master Plan, which sets a Framework toward Reaching Universal Access to Affordable High-Speed Internet. The Plan, overseen by the Mayor's Office of the Chief Technology Officer, was Praised when it was Released in January 2020, but the Pandemic has Slowed its Implementation. A "universal solicitation for broadband," which would seek a Private Partner in the effort, was to be Released this year, but time is running short.
Tisch said the New Franchise Agreement would Work in Unison with the Overall Broadband Plan by bringing more Companies in to Compete on Pricing.
The Industry will watch closely how the City Structures the New Agreements, said Shrihari Pandit, Chief Executive of the Independent Broadband Provider Stealth Communications. Which Carrots and which Sticks will the City use to Push Providers toward the City's Goal of Expanding Affordable Access? "It will depend on how the franchise agreements are written," Pandit said, "but this could make residential broadband expansion appealing for many new entrants."
A Recent Deal with Verizon could offer a Preview of the City's Strategy. Last month Verizon Settled a 2017 Lawsuit from de Blasio's Office that alleged the Company Failed to meet the Terms of its 2008 Broadband Deal. Verizon Agreed in the Deal to Expand High-Speed Fios Coverage to 500,000 Households, focused on Neighborhoods with the Lowest Connectivity. The Settlement included an Extension of Verizon's Franchise Agreement, with the City able to Collect $7.5 Million in Damages if the Company does Not meet the Expansion Obligations by 2023.
Noel Hidalgo, Leader of the Technology-focused Nonprofit BetaNYC, said he hoped the Council Vote Foretells further Urgency from the Mayor on Broadband. "In the last year of his administration, we hope [de Blasio's] administration walks and chews gum at the same time," Hidalgo said. "We hope he puts a laser focus on implementing the Internet Master Plan and outlining an 'internet for all' framework."
NYC Wins When Everyone Can Vote! Michael H. Drucker
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