Williston Park Village officials met last week with the representatives of Verizon who outlined their proposal to the village.

John Harrington, of Verizon Telecommunications Inside Group, came to the microphone. He said, "I'd like to take a moment to recognize the efforts of village clerk Walter Moloughney and village counsel Richard Reers, who represented the village during negotiations. They made a commitment and took the time and effort to learn a technology that is challenging to even experts who deal with it everyday. As a result of their efforts, Verizon made a significant concession from the original agreement that Verizon presented to the village. It was a pleasure dealing with them."

Harrington continued, "I am sure you are all familiar with Verizon. Verizon has been providing telephone service in Williston Park for more than 100 years. We come before you this evening to ask your permission to allow Verizon to provide Cable Television service to Williston Park. The service will allow Verizon to provide choice of cable service providers to Williston Park residents for the first time and will create a competitive market place with the incumbent provider.

"Common sense tells us that when customers have the ability to take their business elsewhere, good things happen for all customers. The facts tell us that competition means lower prices. The Federal Communications Commission (FCC), in its 2005 Assessment of Video Programming Competition, reports that increased competition in the multi-channel video programming distributor market, which is what we are talking about in this agreement this evening, has led to improvement in cable television services and in the case of facilities-based competition, lower prices for customers.

"Studies by the general accounting office in 2004 and the FCC in 2005 show the prices are 15 to 16 percent lower when two wire line cable providers compete in the same market. Finally, The Bank of America Equity Research Report found that where Verizon has been permitted to provide FIOS TV, competitors have responded by offering attractive pricing well below the national average pricing. Competiton means more programming choices and more diverse programming. Competition means improved service, quality and better customer service. The benefits of competition are obvious. When customers have choices, all competitors must constantly strive to improve all aspects of their product. If Verizon is permitted to provide cable service in Williston Park, it is not just Verizon customers that will benefit, all of Williston Park cable customers will benefit from competition. We are here tonight to ask Williston Park to join the other New York communities to bring the superior service of a total fiber optic network competition and choice to their cable consumer residents."

The next to speaker was a member of Verizon's outside counsel, Brendan Pinkaid. He also thanked village clerk Moloughney and village counsel Reers.

He said, "This agreement has also been the beneficiary of substantial analysis by the New York Public Service Commission. (PSC) Over the course of the last two years the PSC had the opportunity to consider and render approvals for 28 Verizon cable franchises including the towns of Oyster Bay and Hempstead. Through that process the PSC has clarified its parameters of its regulations and has established a standard for cable franchise going forward.

"I would like to point you to a particular provision by the PSC rule that will likely be the subject of much discussion this evening. In anticipation of arrival of competition in the provision of Cable television service, in April of 2005 the PSC amended its rules to include what is called, "The Level Playing Field" requirement. Generally, the rule is designed to foster true competition between cable providers by ensuring that the terms of any franchise agreements granted by the municipality do not allow any provider to enjoy material competitive advantage over another. While we obviously agree with the objective the rule seems to promote, competition, it is important to understand how that rule is intended to work in practice.

1. "The Level Playing Field rule requires an analysis of the economic and regulatory burdens of each franchise taken as a whole. That means while some terms of the agreement may differ the measure of whether the Level Planning Field has been met is in their totality their prospective agreements do not impose a material competitive advantage of one provider over another.

2. "The rule is designed not to protect the incumbent from competition by allowing them to dictate the potential terms of the competitor's agreement but rather to ensure that the village and consumers are realizing the benefits of a truly competitive market-place.

"Accordingly, our job is to make sure that the village is comfortable with the terms of our franchise that will allow both Verizon and Cablevision to serve the village on equal footing. Finally, with the amendment of the PSC rules of 2005, the PSC became the body ultimately to determine whether that "level playing field" has been met. In issuing anonymous approvals of Verizon's previous 28 franchises the PSC has never conditioned a Verizon franchise on the basis that it failed to satisfy the "level playing field" rule. Based on the agreement before you this evening we fully expect the same result by the PSC for Williston Park."

Pinkaid then summarized some of the terms of the agreement:

"First, compensation, Verizon's agreement, like Cablevision's, provides for a franchise fee of 5 percent of gross revenues, the maximum permitted by law. I note however that because Verizon's agreement clearly defines what 'gross revenue's including adopting the federal definition of cable service, Verizon is required to pay the village on a broader range of franchise fees than Cablevision.

"Additionally, Verizon has agreed to pay these franchise fees on a quarterly basis, as opposed to Cablevision who pays on a semi-annual basis.

"Financial support. In the many discussions we had with the village negotiation team it became apparent that improving on the village's communications resources was important to the village. So Verizon agreed to provide the village with a grant in the amount of $90,000 to meet the village's needs.

"Recognitition of the village, ability to regulate its 'rights of way'. Section 2.8 of Verizon's agreement acknowledges that nothing in the franchise will limit the village's right to impose the local laws on Verizon and to exercise its police powers. That means that Verizon will be subject to all local laws of the village and expressly comply to all provisions of the village code.

"Liability. Verizon has agreed to indemnify the village, its officers, agents, board and elected officials and employees from any liability undertaken pursuant to the franchise. This is a comprehensive indemnification provision that provides complete protection to the village and exceeds what is required under the PSC rules.

"Insurance. Verizon has agreed to provide $1 million of commercial general insurance and $10 million umbrella insurance and general insurance is double than what is provided by Cablevision.

"Service. There are pretty extensive rules in the PSC regulations governing this, over 30 pages, and Verizon is required legally to comply with those. But we have gone beyond those rules to agree to a more stringent set of obligations. Among them being to restore subscriber premises and municipal premises to pre-existing conditions. Providing parental control devices and requiring our representatives in the field to be identified as such.

"Enforcement of Obligations Under the Franchise. Any agreement must include provision that the parties must ensure that the contractual obligations are met. Therefore, Verizon agreed to include in its franchise, the right of the village to impose upon Verizon liquidated damages, on a per day basis, if Verizon failed to live up to its contractual obligations. As further security for Verizon performance under the agreement, Verizon has agreed to post a performance bond of $50, 000."

He ended his portion of the program by requesting a favorable action on the franchise.

The board then opened up the hearing to any comments by Cablevision.

The spokesman for Cablevision was Peter Bee. He started his comments by saying, "As you may be aware the PSC actually assigned a role to the existing cable company, like Cablevision, which will shortly be in competition with Verizon. It requires that Verizon serve a copy of their application to Cablevision so that Cablevision may come to the village and critique the Verizon proposed contract. No doubt the day will come when Verizon critiques the next negotiated contract with Cablevision.

Bee continued, "But at the present time we are cast in the role of providing some resources to you as party that would be dealing with cable franchise agreements all the time, it falls to us to offer our resources to you and let you know what things about this document might be improved on. Clearly, that's something that will be in Cablevision's interest to do. But, on the other hand, it seems there may be an alignment of interests to hear about some of the ways this contract could be improved. With that in mind, we want to make clear, it is not Cablevision's intent to stop competition. We anticipate that you will eventually vote to have a second TV provider in Williston Park and we intend to win in the market place. So we are not here to stop competition' we are here to make sure you are comfortable that you are about to get competition on the terms and conditions that you are satisfied with and that meet the needs of the village.

"In that regard, I noticed that the Verizon representatives pointed out what a wonderful opportunity you have to be among the first to offer competition. With opportunity, of course comes danger, and it is always a risk that being amongst the first you may discover that those municipalities that negotiate hereafter will get much more favorable terms and conditions and you are left with the less desirable contract.

"Interestingly enough, Cablevision's contract directly addresses that point." He then handed out, to the members of the village board, the contract with Cablevision that notes a MFN, "a most favored nation's" clause that basically says if Cablevision gives a better deal to any municipality in Nassau County, then Cablevision must give you that better deal in any respect.

"We suggest that you may want to say to Verizon what you said to us. If you give a better deal to someone else you will give it to us. Another point is that your liquidated damage clause provides for specific dollar amounts when there is a breach of the agreement with Verizon. It appears to be modeled on the liquidated damage clause that was drafted in the contract between Verizon and the Village of Mineola. They are very similar. Interestingly enough the penalties that your contract provides are in several instances only half the amount provided by the Mineola contract. While the Mineola contract provides for $100 a day the proposal before you calls for $50 a day. This is an example of how the absence of an MFN clause potentially does some harm to this village. You may wish to consider saying to Verizon, our Liquidated Damage Clause should be at least equal to the one at Mineola."

Bee said, "At the end of listing all the things included that Verizon listed in gross receipts, the Verizon contact says excluded is everything that is a non-cable service and non-cable services are defined as being everything that isn't video programming. Well, that's a pretty narrow definition that means that only video programming is cable services; everything is non-cable service. I would suggest that non-cable services should be everything that isn't cable services and then let the federal government decide what is and isn't cable services. If the definition of cable services some day is a more extensive list, you would get the benefit of that list.

"So with those thoughts in mind, I do not discourage you from ultimately entering into a competitive franchise agreement with Verizon. I do ask you to consider the specific terms and conditions that are in this proposal for Williston Park."

Pinkaid came back to the mike to answer some of the questions put forth by Bee. He said, "In reference to the gross receipts area, Verizon has agreed to pay franchise fees for anything, under the law, that is a cable service. Further, Verizon has agreed to enter into a provision that if the federal law is amended to include a broader range of revenues under that definition of cable service, Verizon will amend the agreement to pay franchise fees on those as well.

Pinkaid said, "Conversely, Cablevision never employs the term, 'cable service' as defined by federal law; It has the opportunity to but they have elected not to use that term. So that the suggestion that Verizon's franchise imperils the village is misleading. In respect to the Most Favored Nation's provision, it states that if Cablevision pays a higher rate to another municipality it must pay that rate to you. But, both Cablevision and Verizon are paying the maximum rate as provided by law which is 5 percent.

"In respect to Liquidated Damages, Verizon has agreed to pay an amount higher than what Cablevision pays. Our obligation is to match in totality what Cablevison has provided to the village and we recognized that and we exceeded that. In some places in the agreement Cablevision pays half the Liquidated damages. In totality Verizon is a far superior agreement."

Jeff Clarke, a Cablevision representative, then came to the mike. He said, "As far as the definition of gross receipts and how it ties to MFN, in the definition that Cablevision has with Williston Park, it didn't include a fee-on-fee, which was the result of some litigation, but that calculation became the calculation of franchise fees. Because this village had an MFN it was automatically included. There's a case when you weren't left behind when there was a change in the way the calculation took place and the MFN covered the village.

"The MFN isn't between with Cablevision, you want it with other municipalities, as Cablevision's MFN, so as we went out and negotiated with other municipality and they received a better deal you would be entitled to that. When we were negotiating agreements in the '80s most of the municipalities received 3 percent. Floral Park, in the late 90s received 5 percent and that opened the door to everyone else. And, that is what you are looking for the MFN between other muncipalities."

Attorney Richard Reers said, "Mr. Pinkaid said the federal law requires 5 percent."

Clarke answered, "It isn't required, but 5 percent is the highest. We actually have a municipality in Nassau that chose zero percent and we still have a few that are 3 percent, but 5 percent is the cap."

There were a few more back and forth challenges and the floor was opened to the public for questions.

A Verizon worker, who lives in the village, said she can't wait for the service, it's so wonderful. Another resident wanted to know if you could still get Channel 12, the Long Island channel and was told no, not with Verizon.

Another resident said they can't wait for Verizon service to begin.

The board then left the room and went to discuss the agreement in the back room. Within 15 minutes they returned and announced that the board had agreed to the Verizon franchise.

It was explained that it will probably take about 60 days and that each resident will be approached to see if they wish to sign on to the service or if they wish to continue with their Cable service. It will be an individual resident decision.

The next Williston Park Board meeting will be held on May 21 at 8 p.m. at village hall on Willis Avenue, Williston Park.