What They're Saying
Boston Globe Steve Bailey Slams Verizon Special Interest Bill on “Finneran’s Forum”
May 31, 2007 - WRKO-AM - Finneran's Forum
TOM FINNERAN, host:
Hey, talking about--speaking of interesting stories, what
do we have going on, a cable war going on here in
Massachusetts? Tell us who the players are, and how this
relates to the--to Andy Strecker (sp), the ordinary
listener out there?
Mr. STEVE BAILEY (Boston Globe): Yeah. Well the ads are
all over the radio about this war about bringing
competition to the cable TV business here in Massachusetts.
I've got three things to say about it: Number one, Tom,
we appreciate their business, both Verizon and Comcast here
on RKO, just keep bringing these ads, thank you very much;
number two, we're all for competition, I'm definitely for
it; and number three, Verizon should basically just shut up
and get to work--working the process, because it can work.
I don't think we really need some Verizon special interest
legislation.
FINNERAN: So tell us who is trying to do what to whom?
Verizon, obviously, is wearing the black hat in your
opinion. Tell us why, what is it specifically that you see
them trying to secure that you think runs afoul to the
public interest?
Mr. BAILEY: Well it's a good question; I think, just the
right way to look at it here. And I'm not sure that there
are any black or white hats necessarily, there's just big
interests competing here. And basically the telcos
(sic), including--the telcos including Verizon are in a
big battle with cable companies basically. The telcos
want to get into the cable business and the cable business
wants to get into the telephone business.
And by a lot of key measures, Tom, basically, the cable
operators are winning over the last two years. For
instance, about 12 percent of residential customers have
started buying their phone service from the cable
operators. That's up from about 4 percent in 2005.
At the same period of time the telcos have signed up
about 2 percent of cable customers. The telcos are going
to be spending billions trying to wire the communities for
wire--for cable, and they're going to need about 20 to 25
percent just to break even. So they really have got to
step on the gas.
FINNERAN: Oh they've got a long, long way to go then. I
mean, if they've only done 2, maybe 3 percent penetration
and have to--a factor of--they have to improve that by a
factor of 8, even just to break even.
Mr. BAILEY: Exactly. So, you know, Verizon needs, as I
said, to step on the gas and they're trying not only in
Massachusetts, but all over the country, try to change the
system here, basically.
But I think the record shows why--it's not a pretty system,
OK, you've got to go in community by community and deal
with them. But it's the same process that Comcast went
through, Cablevision went through, Verizon is already in 38
cities and towns--they've gotten permission in the last two
years in 38 cities and towns. They say it takes the
average of about 15 months; they want to bring it down to
15 days.
Now 15 days--15 months is not pretty, but this is a big
transaction, they can work this system here. They have not
always pressed as hard as they want--I've got to--I--to
researching this segment, Tom, I pulled a couple of quotes.
I went through BusinessWeek. Here's a couple of quotes
from Ivan Seindenberg, who is, as you know, the CEO of
Verizon basically.
FINNERAN: Yeah.
Mr. BAILEY: Quote Ivan himself, "We have--" he's looking
for this kind of approval in hundreds of cities and towns
around the country. He says, quote, "We haven't been
turned down anywhere we've gone," he told BusinessWeek.
And in another quote, he says, quote, "We have the ability
to work the current system." They don't want to, but they
have the ability to work it, so get to work, Ivan.
FINNERAN: Yeah, get to work is right. What is--from their
perspective, I'm not wearing the Verizon hat here, but I'm
just trying to figure out...
Mr. BAILEY: Sure.
FINNERAN: ...their view of the world. From their
perspective, what is this 15 months, 15 days--and are they
seeking legislation that imposes a 15-day review period or
a decision period?
Mr. BAILEY: Right.
FINNERAN: What is it about what exists now that they're
trying to unravel? And I liked the way you quote--I love
using somebody's words against them. So, Ivan the
terrible, your own words are coming back to haunt you.
Mr. BAILEY: Exactly.
Well they're trying to do this again in Massachusetts,
other states, they're going on the federal level, they want
a state-by-state approval, they don't want to go through
the cities and towns. And basically--you know, this is
the, kind of, old Massachusetts permitting argument that
we've used...
FINNERAN: Yeah.
Mr. BAILEY: ...in biotech industry. They want to file a
permit to kind of say, 'Wire Boston,' let's say for
instance, and then they want the clock to start running and
in 15 days they want an approval.
FINNERAN: Whew.
Mr. BAILEY: Hey, you know, in this day I can barely get a
license in 15 days...
FINNERAN: That's crazy.
Mr. BAILEY: ...you know to drive a car, but this is still
Massachusetts. So, I just think 15 days is kind of like
ridiculous. Maybe it's kind of a talking point here or
something like that.
FINNERAN: And Comcast--I just want to make sure that every
listener understands that the rules of the game are the
same for Comcast as it is for Verizon. They try to go into
a town and sell their service or a bundle of services,
ofttimes including phone service, as well as cable TV, as
well as, computer service, you know, a high-speed line.
Mr. BAILEY: Right. I mean, this company has a certain
amount of shakedown activity here, OK. The cities and
towns are going to want money for this; maybe for a
swimming pool, who knows. You know, they're going to want
the providers to pay up. I mean, Comcast has paid up here
in Massachusetts--here in Cambridge we've got Cambridge the
local access TV station.
FINNERAN: Yeah.
Mr. BAILEY: It was terrific and it's funded off of, you
know, a five cents a month on my bill from Comcast.
FINNERAN: Yep.
Mr. BAILEY: They're going to want the same thing here, OK.
And the cities and towns are going to say that Verizon is
going to want to come in and cherrypick the communities.
They're going to wire the zip codes that have the highest
income residents and they're not going to want to wire the
whole towns and...
FINNERAN: Yeah.
Mr. BAILEY: ...the cities and towns think they've got to
provide access right now. Verizon is trying to--they've
got these 38 towns just for instance in the last two years.
They're now looking at Boston, they're looking at
Springfield, they're looking at Wooster, places like that.
Bigger--the bigger cities here, and, you know, that's why
they're pushing so hard right now, and they probably, you
know, like anybody else, they want to go where the profits
are first.
FINNERAN: Sure.
Mr. BAILEY: But the cities and towns think this is the
time to hold them accountable. And I think Comcast has a
legitimate argument, 'We went through the process, why
shouldn't Verizon?'
FINNERAN: As long as the rules are the same for everybody,
I don't think anybody has a gripe--
Mr. BAILEY: I mean, who's against competition, OK? Except
for Comcast--Comcast is against the--but, I mean, you and
me, and Andy Strecker, we want competition, the cities and
towns want competition I think, why not?
FINNERAN: Here's what I hear from a lot of folks and it'd
be interesting to see what cities and towns might be able
to do on it--on their, you know, in their own individual
approaches. I hear people constantly talk about how the
price keeps continuing to go up, up, up, up, up, without
any break in sight whatsoever.
Programming, people often worry about programming and
having to buy more, larger packages that they're not
inclined to use, but it's presented as a package. So, in
order to get one thing that you really want, you have to
pay for a whole bunch of other things. And then last, but
not least, they do the crappiest job of all in repaving
over the streets after they've dug them up to run their
wires. Can they do a good job at that at least?
Mr. BAILEY: Fair thing to say. You're absolutely
right--I've got no love for the cable companies. I hate
all the--I hate the cable companies, I hate the telephone
companies, in fact, I just switched over everything to
Comcast, because they offered me a better deal.
FINNERAN: Better package.
Mr. BAILEY: You know, Verizon comes in here and they offer
me a better deal, I'd go to them, you know 10 bucks a
month, you know, it matters to me.
FINNERAN: Sure it does.
Mr. BAILEY: I'm a cheap guy.
FINNERAN: Yeah. Hey, a wandering consumer, our kind--the
best kind of consumer, don't get tied up too much in
brands, you'll just go where the best deal is, that's--
Mr. BAILEY: So I want them in here, there's no question I
want them in here. So let's just shut up, work the system,
come on, I'll sign up tomorrow.
FINNERAN: Yeah.
Hey Steve, always a pleasure to talk to you. This is a
complicated drama that's playing out, you've shed a lot of
light on it for our listeners, appreciate it very much.
We'll be back with you tomorrow, same time, same channel.
Mr. BAILEY: Bye.
FINNERAN: You've been listening to Steve Bailey of The
Boston Globe, every day at this time on FINNERAN'S FORUM;
we do the Boston Business Report with Steve Bailey.
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