Mayor Bloomberg has recused himself from the Verizon franchise talks, but some still see his hand on the remote.


As Verizon nears the finish line for its $4 billion cable television franchise agreement with the city, one person has been notably absent from all the negotiations: Mayor Michael Bloomberg (Ind.).

Bloomberg recused himself from the Verizon negotiations to avoid any conflict of interest presented by his ownership of Bloomberg Television, city officials said. But that has not stopped some from wondering whether the city’s plan to allow Verizon to compete with Time Warner and Cablevision for cable customers is actually much-delayed payback to Cablevision for helping wreck Bloomberg’s Olympic dreams five years ago.

One observer with clients involved called the move to break the Time Warner-Cablevision duopoly  “Bloomberg's revenge.”

The Verizon agreement was given the green light in a May 27 unanimous vote by the city's Franchise Concession and Review Committee. It now goes to the state's Public Service Commission for approval.

City Council Member Tony Avella (D-Queens), chair of the Zoning and Franchises Subcommittee, said the idea that Verizon is being brought in to compete with Cablevision as payback may be slightly farfetched. But the new deal between the city and Verizon still makes him uneasy.

“I think it was a huge conflict of interest here with the mayor and the cable access channels,” said Avella, a frequent Bloomberg critic who is himself running for mayor in 2009. “I'm afraid that the consumers and every New Yorker were shortchanged in this.”

But Avella said that he ultimately supports the agreement, arguing that competition among cable companies will improve services and prices for consumers.  

Cablevision, which owns Madison Square Garden, lobbied heavily in opposition to Bloomberg's effort to put a new Jets Stadium over the West Side Rail Yards in the hopes of attracting the 2012 Olympics. Cablevision Chief Executive James Dolan and Bloomberg engaged in a very public war of words, with the mayor calling Cablevision a “disgrace,” and Dolan accusing Bloomberg of trying to forward a financially flawed plan.

But Cablevision was apparently unfazed by the Verizon agreement. City officials said that the cable company did not send any representatives to the public hearings nor did it register any complaints.

“We have not seen any opposition from Cablevision or Time Warner on this,” said Bruce Regal, senior counsel at the New York City Law Department, who was involved in hammering out the agreement.

Regal also shot down the notion that the city was trying to undermine Cablevision's business by bringing in Verizon. The goal has always been to make the market more competitive, he explained.

“It long pre-dates any conflicts with Cablevision,” Regal said. “This has been a very long-term goal for the city and we’re very happy to have achieved it.”

In Bloomberg's absence, negotiations were led on the city’s side by Edward Skyler, deputy mayor for operations, Robert Lieber, deputy mayor for economic development, and Lieber's predecessor Dan Doctoroff, who retired last year to become president of Bloomberg L.P.

Under the agreement, Verizon will install a fiber optic network to service all cable customers by 2012. The company will pay the city a franchise fee of 5 percent of generated revenues and has agreed to nearly double the number of public, educational and government channels currently available to 17.

Verizon also agreed to numerous provisions in the “Cable Consumer Bill of Rights,” which was developed by City Comptroller William Thompson (D) and the New York Public Interest Research Group last May.

In a statement released after the committee decision, Thompson said that the new measures add a level of transparency that has been lacking in previous franchise agreements.

Consumer groups, untroubled by any perceived conflict of interest, disagreed with Thompson's assessment, saying the deal lacked transparency and accountability.

“Substantively, there are some provisions in there that represent a weakening of consumer protections, and they really jammed us,” said Chuck Bell, program director of Consumers Union. “They didn't give us adequate time to review it.”
Bell said that neither the city's Department of Information Technology and Telecommunications nor the franchise committee published notices about the agreement until the day of the hearing.

“Verizon had plenty of notice, they had plenty of time to line up their supporters,” Bell said. “Hardly anyone was there from the public interest side.”

City Council Member Gale Brewer (D-Manhattan), chair of the Technology in Government Committee, agreed, saying she doubted that many New Yorkers even knew the vote was taking place.

On the plus side, Brewer said, she was pleased that there was plenty of funding included for public and community access channels.

“I think that the City of New York bargained hard with Verizon, and there are some good things in the agreement,” she said.

The state Public Service Commission vote is expected in July.