Published June 26, 2019
By DAN TOMASELLO
LYNNFIELD — The Board of Selectmen unanimously approved a new licensing agreement with Verizon New England on June 18.
Selectmen Chairman Phil Crawford said the town’s cable television licensing agreement with Verizon has expired. As a result, he said Town Counsel Tom Mullen helped draft a new pact.
“The provisions mirror the agreement with Comcast, the other cable provider,” said Crawford.
Mullen noted he worked with Verizon’s attorney, John Harrington, on similar agreements in different municipalities. He said Harrington was “extremely cooperative.”
“The new licensing agreement is five years in length,” said Mullen. “That is not as long as the existing one, but that is as long as Verizon is giving anybody at this point.”
Mullen said Verizon’s public, educational and governmental (PEG) fees will increase from 3 percent to 4.75 percent, which he said is similar to the pact with Comcast.
“Verizon is offering us a high-definition channel for public access use in addition to the existing public access channel,” said Mullen. “This is something that Comcast does not offer. In addition, the PEG capital grant will exceed $20,000 per year. That is a 15 percent increase over the current amount.”
Harrington said the town and Verizon began negotiating a new contract over two years ago.
“At that time, Verizon was ambivalent as to whether or not it was going to continue in the cable TV business,” said Harrington. “The original agreement that we presented to this town and other towns included a unilateral termination on Verizon’s part and a PEG support formula that was based upon subscribers. In our initial meetings with Mr. Mullen, it was clear that was not acceptable to the town. We addressed those issues. But as time has passed, Verizon’s concerns have only amplified.”
While Harrington said the town will be benefiting from the PEG fee and capital grant increases, he said the town’s “biggest concession” was agreeing to a five year contract instead of a 10 year contract.
“That is important to Verizon given the state of the industry,” said Harrington. “More people are going to streaming services instead of cable TV. That is what is driving this right now.”
According to CNBC, 55 percent of American households subscribe to at least streaming service such as Netflix or Hulu.
Harrington said a number of components in the original agreement “have been retained or adapted” in the new pact.
“We have been providing service to Lynnfield in excess of 10 years,” said Harrington. “We have been a good citizen and have addressed concerns that have been raised.”
In response to a question from Crawford, Harrington said Verizon had no subscribers when the company started providing cable services in town.
“It’s called a franchise recovery charge,” said Harrington. “It gets passed onto subscribers. Because they had no subscribers, Verizon was not passing it through until they had a fair number of subscribers. At the end of the year, it was 2,325. That fee was $1.80 per month. That has not been charged since Verizon recovered the PEG amounts they had. That is going down to 73 cents per month.”
Crawford expressed his support for the new contract.
“It’s pretty straight forward,” said Crawford.
After the discussion, the selectmen unanimously approved the new pact with Verizon.