Two things. We've tried to do that with a map, and we'll enhance it, as Councilman earlier had suggested, Councilman Greenlee. But I want to make it clear. It wasn't a back-room deal or a discussion with the prior Public Property Commissioner that Comcast relied on. It was in Section 2 of their agreement. There was a contractual obligation that they would provide that information to the Commissioner so that it could remain proprietary. We've agreed to essentially the same idea. However --
If I said back room, I apologize. I probably meant in the conference room. I'm sorry. Bad characterization.
And we've gone farther than that in their contractual obligation with the agreement that you have in front of you. We'll continue to clarify the 156 build-out for you, but I want to make it abundantly clear that we've already done more than the incumbent. We'll continue to do more. And, by the way, from our perspective based on the questions you're asking, you're very equal to the administrative branch of government here, the executive branch. So we're going to continue --
And that's how we view it. So we'll answer any questions you have. But we understand the need for clarity and transparency, and we'll provide that to you and we'll do everything we can to do that for you.
We really would appreciate that, because we need to be in a position to respond. More often than not, Councilpeople tend to be the first line of response. We don't have our 3-1-1 system set up yet, in earnest, 157 but people see us. People have the ability to come to Council, as you see right here. There are probably people here waiting today waiting for this hearing to be over so they can grab us in the corner. I need to know whether I'm going to be wired for FiOS. So we need to be in some position to respond intelligently. That's all we're saying. Thank you.
I think it's important for Verizon -- and I would have asked this for Comcast -- the issue of the competition around how much detailed information they give out for mapping, why that's done. Why is that an industry practice that's been done in other cities?
Well, from the company's perspective, from a competitor's -- we're proposing -- Verizon is proposing to spend a lot of money to build this system, the largest ever done in the City's history. What it needs to get a return on that investment is customers. What happens in these situations often times is, if Verizon or anybody else announced where their build plan was going in detail at the granule level of streets, I know you'd be shocked to hear this, but the incumbent then goes to those areas and tries to lock up customers with contracts, or in a multiple dwelling unit, they do creative marketing arrangements that essentially prohibits Verizon from getting those customers. That's why it's very proprietary, and that's why both companies in their agreements have looked 159 to provide information, but the real granule level is done with the Commissioner.
And I hate to belabor the point. Couldn't you reverse that and say that the fact that you're coming to a neighborhood and you're going to have, as you said, possibly -- was it $15, $12 per 13 customer? 14
Wouldn't that then be what we're all seeking is competition? So if the incumbent said, Oh, here, they're coming over here, we better drop our rates, isn't that what we as customers want?
It's an excellent point, but even the threat of competition will make the incumbent lower their prices. They can get away with it now because there's no competition. 160
Guess what? You're a hundred percent right. Your constituent in that scenario would benefit by the incumbent running out, locking them up into an agreement that's cheaper than they're paying now. But who it would hurt is the second entrant.
I hear you, and you're right, but with all due respect, I mean, the primary focus of the calls that I've been getting -- and I'm assuming other Councilmembers -- wasn't, frankly speaking, how the franchise agreement was negotiated, who is going to do the CWA. They don't care about that. They want to know, is Verizon coming in, going to lower my rates, because Comcast will feel the need to lower their rates and then there will be this price war.
More people, in that scenario that you're painting, the reality is, without the granule detail, 161 the incumbent will lower rates citywide immediately for the arrival of competition, because they don't know where we're going block to block or street to street. The more likely scenario is they'd lower it citywide.
I don't think that they -- to my knowledge, I've never heard of the incumbent lowering rates in a particular area.
Do they do that? But I'm just saying, realistically -- and, I mean, these are folks who are -- it's interesting. We keep calling them the incumbent. But this is their home. How could they get away, frankly speaking, with saying, All right, North Philly, we're going to lower rates in North Philly and not West Philly?
That's my point. They'd lower them citywide. So it 162 wouldn't just be a certain district that would benefit. It would be every resident.
You should. That's the point. You should, and we support that idea. That's what the agreement allows. I mean, just look at the reality of what's going on with the incumbent. They've announced another rate increase for January 1st. The only service they're going to increase was the one they don't have competition in, cable service. Internet service, telephone service, no increase. There's a reason for that, because they can. They don't have to compete for those customers. That's how it works. That's why monopolies have been pushed aside in favor of competition in virtually every industry known to man. This is the last bashing of a monopoly setting, and we're proposing with our build and our 163 contractual obligation to provide service to every resident to break that monopoly. That's what we're here to do.
All right. I guess I just see it differently. I think that as soon as you announce where you're going, with the understanding that those rates will be $10, $15 cheaper, that the incumbent will immediately look at a strategy to reduce their citywide rates. I don't think that they're going to look at that zip code and lower the rates in that zip code. I mean, in the City of Philadelphia, that's just not done. I can't believe that they would do that, but anyway, I'm not going to belabor the point. Councilman Rizzo.
Thank you. I want to follow up on liquidated damages. You, I'm sure, are familiar with the name EarthLink and the experience we've gone through here in Philadelphia -- 164
And I apologize if my statement is not correct. What is your resistance in liquidated damages for non-completion?
Well, the reality is, Verizon is building this network under its existing authority as a Title II telephone operator. The franchise itself is only granting Verizon the ability to provide cable service. It's not granting Verizon any new rights to build. Verizon could build this system today in the regulatory reality it's under. The economic reality is that it needs the three bundled services in order to compete with Comcast. But let me follow up with that. There's up to a $13 million performance bond in the agreement that obligates all of the conditions of the agreement be 165 met. So if we didn't build or provide service in this case to a certain area, the City could draw down on it. But keep in mind, let me just -- so comparing that to Comcast, they're a Title VI provider, a cable provider. They need that agreement, this franchise agreement, in order to gain access to your streets. That's much different than Verizon. But if your point is that there's liquidated damages in the incumbent agreement for the build, one, they need it, because that's how they get access to your right-of-ways, but if you took the per-day fine that's in there for Comcast and applied it, it would total $10 million over 15 years. We're agreeing to a $13 million performance bond. It's far greater. So what we've agreed to is a performance bond that obligates Verizon to meet all of the things that we've negotiated with the City, including the provision of service. And I know one of 166 the other Councilmen correctly noted -- I think it was Councilman Green before he left -- that this is about the provision of service. He's right. That's why we put in the agreement that we weren't going to just build. We're going to provide the service, in which area we're going to service.
And to follow-up on the Chairman's statement about -- and I like the fact that you're starting to use the word "Comcast," you're dropping that "incumbent" here.
Well, I know you're reading from that long list. I want to make sure I do it right.
I wasn't 167 insinuating that. I apologize if it came across that way.
Is your concern that if we know that where you're going to build, that Comcast will lower their rates and retain their customers?
It's both. In other areas of the country, incumbents often times use contracts to lock up customers when they know we're arriving, and they may often times lower rates. And there's a lot of ways to do that when they have bundled service. They can tweak the phone cost or the Internet cost, as well the cable TV cost.
That's not bad for you, but it's bad for our constituents.
It would probably be the other way around. They would get a benefit by lower rates, but we wouldn't 168 be able to get them.
Right. You got it right. So I think that's what the Chairman said, that if it drove the rates down, that that's not necessarily a bad thing for our side of the aisle.
Agreed, and that's why we'd rather have them lower them citywide as opposed to a specific area where they know we're going. The reality is, if they don't know by street level where we're going, they can't just target that one area. They'd have to target the whole City. So more consumers would benefit from the scenario you're pointing to.
One last question, kind of related to an earlier question. With respect to your negotiation with the Administration on 169 your franchise agreement, was it, to a degree, the understanding that or the belief that upon the conclusion of that franchise agreement negotiations, there would not be any additional requests from government generally to alter any of the earlier agreements? Because as you've heard today, there have been a number of issues raised. I'm sure you've heard them during the course of the discussion over the last couple of weeks for some things that are of some concerns of Councilmembers, the co-equal branch of government. Did you guys have a sense of what --
We negotiated with the City negotiators what we consider to be an agreement that was presented in the ordinance before you.
Okay. Thank you. Thank you. Any other questions of these witnesses by members of the Committee or other Councilmembers present? 170
One is, one of the things that Comcast has is a Community Advisory Board that allows them to bring together a cross section of the community across the City. While that's not something that's added into your franchise agreement, is that something you could publicly commit to?
I assume the Advisory Board, as I know it, is not a part of their franchise agreement.
Right. That's what I said. It's not part of something that we would put in the franchise. It's part of their public --
As it relates to outreach to the community, I'm sure Tabb and the External Affairs organization would work with you and the members to set up some advisory board. 171
Thank you. As it relates to your vendor participation, minority vendor participation, what is your current minority participation and how are you going to increase it through this agreement?
For the year 2007 -- we don't have the statistics in yet for 2008. So those certainly won't be available until the beginning of 2009. But for 2007, we did about $800 million in total worth of business in the City of Philadelphia. In terms of business with minority -- with firms as a whole, and that's a very comprehensive list of areas. About 114 million of those dollars were spent with what are certainly certified minority, women, disabled and veterans business enterprises.
Yes. Yes. That's for all those categories. And that equals about percent of the business 10 that was done, and that was certainly -- 11 I guess Verizon really is committed to 12 its diversity. Certainly if you go to 13 our national website, as well as even 14 just looking around the employee base at Verizon and many of the people that we work with, the diversity is an imperative in the organization. We really value it and consider it to be incredibly important. And so that's why even prior to this opportunity of asking for a franchise, we've really been focusing on how we can do more with minority communities. That's why I think certainly going back to the question you asked Paul, I mean, certainly you'll find 173 us to be open in many different ways of trying to find ways of connecting more with minority communities.
As it relates to minority participation in terms of contracting, we do. We have as of right now, as I pointed, percent. We've 11 created, developed with the City an 12 Economic Opportunity Plan. An Economic 13 Opportunity Plan will give us the 14 opportunity to not just focus strictly on the things related to this franchise, but it will create opportunities for businesses in all three lines of Verizon's business. That's certainly the wireless business, that will be the telecom business and then Verizon business. So with that, we would be able to tap into some good opportunities for people, because, again, you're dealing with a much broader array of potential 174 areas. So our goal is to increase it over the next five years. If we're able to get this, this will be beginning in 2009 and going five years forward, increasing that percent up to 8 percent, and then five years after that, 9 going from 20 percent to 25 percent, and 10 then five years following that, from 25 11 percent to 30 percent. We've 12 communicated that. We have an Office of 13 Supplier Diversity. That's been 14 communicated very high up within the 15 order at Verizon and the national 16 organization, and people are willing to 17 commit to that. And certainly working 18 with minority organizations, the way that 19 we're going to achieve that is to 20 certainly connect more with local chambers of commerce and, in particular, certainly minority and women-based organizations that work closely with us. We've certainly been in conversations with the Greater 175 Philadelphia Hispanic Chamber of Commerce, the African-American Chamber of Commerce, the Greater Philadelphia Minority Business Strategic Alliance and others. But those are the three that we've started with. We're certainly willing to -- actually had one conversation even with the Mayor's Office on Economic Opportunity. So we're looking to connect, partner with people, bring them into a relationship with the organization, with our Office of Supplier Diversity. We're able to communicate to them, make them aware of the kinds of services that they need to develop, making sure that they're aware of RFPs when they're available and kind of helping them to be best prepared to apply for those opportunities.
Thank you, Councilwoman. Any other questions by members 176 of the Committee for these witnesses? (No response.)
Thank you very much. I'm assuming you all will be sticking around?
Thank you. Our next panel is Lance Haver, Director of Consumer Affairs; Alan Butkovitz, the City Controller; and State Representative Curtis Thomas. (Witnesses approached witness table.)
Good evening, gentlemen. Mr. Butkovitz, I see you've submitted written testimony. Would you be reading from that or summarizing?
Well, I will summarize. First of all, we support the concept of competition and enactment of this bill. We are recommending the inclusion in the agreement of a 177 Philadelphia Cable Consumer Bill of Rights modeled on the one in New York City, which has also been adopted in Seattle and Los Angeles. And the basic concept is to provide transparency with respect to service and repairs. It will require periodic reports of the number of various types of complaints and the responses, and it will provide for an annual report card on those services. That's it. That's my summary.
That was a heck of a summary. Thank you, Mr. Butkovitz. Representative Thomas. REPRESENTATIVE THOMAS: Good evening, Mr. Chairman. Let me thank you and thank the members of the Committee and other Councilmembers for giving me this opportunity. And I don't know whether I can summarize as quickly as Mr. Butkovitz did, but I will attempt to summarize my concerns. As you know, I'm a majority 178 Chairman of the House and Governmental Affairs Committee, which includes the Information Technology Subcommittee, which I established some years ago. I currently serve on the Executive Committee of the National Council of State Legislators and its standing Committee on Communications, Financial Transactions and Technology. Also, the author of Blueprint for Digital Excellence in the Commonwealth of Pennsylvania. So as a former Council President and former Mayor said one time, I kind of know something about the issue which is before you this evening. I support your desire to create competition, and I only ask that -- there's been a lot of conversation around build-out. Unless build-out is in the statute, in the bill, then build-out is going to be discretionary. It's interesting that you're having this conversation, because it was not -- I guess it was a year ago, a year 179 ago we in the Pennsylvania General Assembly was wrestling with the question. Verizon at the time wanted the Commonwealth of Pennsylvania to take overall franchise agreements and really articulate what these franchise agreements should look like. That effort was not successful because there was a lot of people who believe that local control was very important, that counties and municipalities needed to be involved in the franchise conversations. So we think the build-out needs to be in the law. We also believe that diversity, the issue of diversity and inclusion, needs to be a part of the ordinance, and we believe that the ordinance needs to define a fair playing field. I mean, if we look at the other cable agreements for -- cable agreements that we have in place, we required. It was not a deal that was done in a back room or after the bill became law. You 180 need to know what build-out is going to look like up front. And I think it's only fair that we're able to tell our constituents just what is going on. And let's face it, with all the things going on in our city and across the country, we don't need anything that even sounds or smells like a separate agreement. Everything needs to be out front, and people need to know. So I wanted to come here this evening and share that recommendation with you and ask that there are some things in place to measure some of the information that you have received this evening. As City Controller Butkovitz will be able to tell you, we put a lot of work in re-authoring the telecom law in the Commonwealth of Pennsylvania, of which Verizon was the major company at the table, and there were things that was put in the Telecom Reauthorization Act, almost a mirror of some of the benefits 181 that have been articulated this evening. The jury is in as to whether or not there's been a commitment to satisfy many of those conditions that was put in the Telecom Act. And so you can look at some of those numbers and look at that history to get some idea of whether Verizon has been a good neighbor or as good as any other provider. The last thing is, we can little afford to allow Verizon or anyone to cherry pick on the issue of access, on the issue of cost and on the issue of creating a level playing field. So I wanted to share that with you, and I thank you. This is a bold step that you're taking, one that your constituents in the City of Philadelphia is going to treasure for years to come or be saddened in future years based on the outcome of this hearing and these conversations. So, again, I want to thank you, Mr. Chairman, and thank the members of 182 this Committee and members of City Council for giving me this opportunity.
I'll summarize as well. Thank you for the opportunity. I think FiOS will be great for the City of Philadelphia. It would add to the quality of life for consumers. Choice like that, of course, is wonderful. I think it's great that Council is playing a role in making sure there's an equal roll-out. I just would like to mention two things I would also ask you to consider. One is the Controller already mentioned, the Consumer Bill of Rights. I think that can be easily included. And part of that would be to make sure that whatever the service center is, it's a service center where you call, you can be understood and you can understand what you're being told, that we really 183 consider outsourcing as a significant problem for consumers. The second thing is, as you are asking for a performance bond or considering a performance bond, to ensure that the build-out is fair and that Verizon lives up to their word, I'd also ask you to consider rate caps on prices, because Verizon continues to say that competition will drive down costs, and it may well, but if they really believe that completely, then as part of the agreement, they wouldn't mind having rate caps in place to protect consumers from rates going up. With that, I'll close. Thank you.
Thank you, Mr. Haver. Mr. Butkovitz, as the City's watchdog, so to speak, both in terms of inefficiencies, corruption and also you played a role of a fiscal watchdog, can you or will you do an analysis on the 184 financial impact to the City as it relates to the potential roll-out? We hear these terms about the amount of the build-out and the contribution, but I would like to see if you can provide us with that as we move along, the actual above baseline revenues that will go directly to the General Fund.
You mean the direct revenue to the City? It's only about $11 million. It's relatively peanuts. This is really a matter of improving the rate structure for consumers. It's not a big moneymaker for the City.
Actually, a few moments ago I became prepared for that question.
Thank you. All right. Actually, I'll get into a little more detail, but I do have some 185 questions along those same lines with respect to purchase of services, materials, equipment, workforce. Thank you. I'm sorry. Councilman DiCicco. COUNCILMAN DiCICCO: Thank you. Good evening, gentlemen. My question is for the City Controller. Are you familiar with the details of the franchise agreement?
I've just read the franchise agreement. I'm familiar with it on a -- in terms of what it says, but I've not -- I mean, it's complex, and I'm not going to claim to be an expert on it. COUNCILMAN DiCICCO: So your office, did you or anyone in your office participate in any of those discussions?
No. No. 22 COUNCILMAN DiCICCO: You talk about a Bill of Rights, which I've seen for the first time. Does Comcast have a Bill of Rights? 186
No. And, of course, we would recommend that when their franchise is renewed, that that also be incorporated into that agreement. COUNCILMAN DiCICCO: When is that renewal? Does anyone know? (No response.) COUNCILMAN DiCICCO: I guess my question is, if you're asking us to include a Bill of Rights for Verizon and you're suggesting that this would be a good thing, it would put everyone on an even playing field, doesn't that kind of counter what you're saying? If we're putting additional restrictions on Verizon, doesn't that negate what we're trying to do in terms of trying to put it on an even playing field? Because the Bill of Rights, from 30 seconds ago, a minute ago, really speaks about protections for consumers and guarantees for service, which is a good thing, but it doesn't talk about any of the issues as it relates to what the franchise will 187 mean to the City and revenues and other issues that are not related specifically to the consumer. Not that the consumer isn't important, but I'm a little confused on this.
I guess there's a couple ways of answering. One is, I think we should learn from our mistakes and we should continue to -- COUNCILMAN DiCICCO: I was actually asking the Controller, but thank you. Unless you're running, we can talk about that.
This is a question of improved reporting. It doesn't really per se have an enforcement mechanism. So it provides a greater level of detailed information on how the first franchisee is dealing with their issues, but the enforcement mechanism is still basically what's outlined in the franchise agreement. So instead of the 188 Commissioner having to go through some lengthy process to determine how they're responding to complaints and whether he should begin some type of enforcement action against the performance bond or the thousand-dollar-a-day penalty or any of that, the information is more readily accessible. I don't see how that harms anything. If the question is, Well, if you have a greater detailed set of information about Verizon and, therefore, that's going to expedite enforcement or make the Commissioner take stronger action against them and it would be fair that you try not to have that level of detailed information, I don't regard that as a discriminatory effect. I think as time goes on, you have better and better access to information. I don't think we would want to foreclose new information because we didn't think of it before. COUNCILMAN DiCICCO: I'm sorry?
I don't think we would want to foreclose transparency 189 on new information just because we hadn't thought of it before. COUNCILMAN DiCICCO: I'm not suggesting that we would foreclose it. I don't know. It's kind of like at the 11th hour -- well, not the 11th hour, because this is not coming out of Committee today, but this Bill of Rights for me just seems to be a little bit more of a burden on one entity as opposed to the other. And I don't know when the renewal for Comcast is, and that might be an opportunity for us to do it at that point, but between now and then, it's a further restriction.
Well, the problem then is that the Verizon franchise will be in place. You're always going to have a grandfathering problem. You got to start at some point. COUNCILMAN DiCICCO: No further questions. Thank you.
Thank you. Thank you, gentlemen. Thank you so much 190 for your testimony. The next panel -- people have left. I'm going to have to look at this revised list. We're going to try to speed this up, because folks are leaving, understandably. The next panel will be Mr. Taubenberger from the Northeast Chamber of Commerce, Delilah Winder from African-American Chamber of Commerce and Jan Shaeffer from Saint Christopher's Hospital Foundation and Mr. Anthony Lewis. I saw Mr. Lewis in the back. (Witnesses approached witness table.)
Is Mr. Taubenberger here? UNIDENTIFIED SPEAKER: He may have stepped outside.
In the hallway? Okay. Good evening. Please state your name for the record and please proceed. 191
And I can pretty much summarize my testimony also. I am Chairperson of the African-American Chamber of Commerce here in Philadelphia, South Jersey and Delaware, also an entrepreneur in the City of Philadelphia for the past 13 years, as well as a resident of Queen 14 Village here in Philadelphia. 15 We support Verizon in their 16 effort to have a franchise for FiOS TV. 17 I personally support it out of my passion 18 of entertainment for cooking and enjoying 19 the quality and getting the highest 20 quality of service to view my 21 entertainment of cooking that I enjoy so 22 much. 23 On the note of the Chamber and 24 our small businesses, Verizon has reached 25 out to us, as well as has in the past and 192 present, for inclusion in diversity with our businesses to help to bring them on board for contracts through services and through their procurement at Verizon. So I feel comfortable at this point that there is growth and development for our businesses through this process, as well as through other entities throughout the Verizon company. So basically I'm here just to confirm that we support this. We support this because we see that it will bring businesses for our businesses on the whole. So I thank you.
Thank you. Thank you, Ms. Winder. Thank you for your testimony. Please proceed.
Good evening. My name is Jan Shaeffer. I'm the Executive Director of the Saint Christopher's Foundation for Children.
Good evening. I am a resident of Philadelphia and, as I mentioned, I'm affiliated with Saint Christopher Hospital for Children in the Foundation. The Foundation does work in the North Philadelphia community. As a resident of Philadelphia, I feel that I represent those who have waited for a very long time for a land-based alternative to Comcast. Consumers in the City don't want to wait any longer. We want Verizon and we want the FiOS TV service delivered as soon as possible. We're counting on you to get the project started. I know that often times there's some frustration, just as a resident, speaking on behalf of myself as a Philadelphian, that there's that frustration that there is no other alternative, but Verizon has built a powerful success story with the FiOS TV in suburban companies. The company has 194 clearly demonstrated that it has what it takes to compete with the nation's biggest cable companies and to serve customers. As residents in Philadelphia, we're about to become one of a handful of major cities with FiOS service, and we couldn't be more excited about that. My colleagues in the medical community also are eager to see what FiOS can do. We know anecdotally that doctors who use secure FiOS connections between the home and the hospital to consult with attending physicians after hours, this fast high-speed capacity Internet connection holds both the potential for helping medical personnel making life-saving decisions and to speed the delivery of treatment when seconds count. We also believe the FiOS network will some day be a powerful conduit for home healthcare services. When Verizon says this is the network of the future, we know it's true, and we are 195 energized by its potential. There's no reason to delay. We feel that this is a great opportunity for Philadelphia to have a choice, and I hope that you will move quickly on this. Thank you.
Good evening. Thank you, Chairman Clarke and other members of the Council. My name is Tony Lewis. I'm the Managing Director of the Housing Association of Delaware Valley. Mr. Chairman, I'd like to submit my testimony for the record and just simply summarize with a couple points. I think that the Council has it. One, I've heard from several of the people that this is something that will be good for Philadelphia, it will be good for the constituents. You just want to -- the question was asked by a couple people what was the rush, and I'd just like to talk for just a minute about my rush. 196 My rush is that I'm a Comcast customer. And I'm not here to debate Comcast in any way. I think they've been a good Philadelphia citizen. But as a customer, in less -- well, roughly 7 months, my bill, my Comcast bill, 8 increased not 100 percent, not 200 9 percent, not 300 percent, not 400 10 percent, 500 percent, and that happened 11 because there's no competition. 12 I received a call at my house. 13 I never watch a lot of television. I had 14 the very basic service. I received a call back in April of '07 saying that they were no longer going to provide that service, and if I was going to remain a customer, I had to upgrade. I got about low-level new 20 channels that I don't watch, but, again, I didn't like it. It was a bad feeling. I had had that rate for years, but they decided that that was the way it was, and I had an option of either paying that or I had an option of getting the Dish on my 197 house and paying some additional money, and I didn't think it was fair, but I didn't have much of a choice, and so I paid those increases. But, as I said, in less than two years, I've gone up 500 percent in my bill. And I think the way that you deal with that is competition. And there's no question about it. And I think that everyone has said that over and over, that we want that. If you look across the country everywhere where this has happened, the costs have gone down, the services have gotten better and in some cases even created jobs. So I think it's good and I'm here to ask Council to vote favorably on this ordinance to provide Verizon with this cable franchise. Thank you very much.
Thank you, Mr. Lewis. Thank you all for your testimony. Any questions of these 198 witnesses? (No response.)
And, Ms. Winder, if and when this happens, we're going to try to negotiate you to have a cooking show on one of these.
Mr. Yu, the Executive Director of the Korean Community Development Services Center. Mr. Taubenberger is here now.
That's okay. Al Boccella from the Philadelphia Consumer Council; Roberta 199 Faison. Why don't you just come up and grab a seat, and then we'll proceed with this panel. Good evening.
Thank you. Al Taubenberger, President, Northeast Philadelphia Chamber of Commerce. Last name is spelled T-A-U-B-E-N-B-E-R-G-E-R. As President of the Greater Northeast Philadelphia Chamber of Commerce, a membership organization of nearly 1,000 members, I ask you to take favorable action on Verizon's cable franchise sent to the City Council on November 13th. Our members are pleased to know that video competition is coming to Philadelphia. We believe that it is a very important and positive and important step for small business in the City. As you know, this network 200 offers a bandwidth which is five megabytes per second, Internet service to business like home-based entrepreneurs. The FiOS network will enable many companies like these to obtain this access at more affordable prices. This is a technology solution we have been waiting for for many years. I am pleased that Verizon chose Philadelphia to be among the first urban areas in America to receive this network. It is a powerful tool for attracting and retaining jobs in this community. It would help fuel our economic engine for years to come. I would also have to say and disclose that I am a Comcast customer. I like the service. I intend to keep it. And also in reviewing the bill, I would be remiss as President of the Northeast Philadelphia Chamber of Commerce to say I'm not exactly enamored with the map and having Northeast Philadelphia, for the most part, being at 201 the tail end of the accomplishments here. I think it's truly American to have choice. I think Americans relish it. I think it improves everything. I think competition is keen in everything that we do. It is how we are as Americans, and that is why I'm very favorable to this bill. However, as Northeast Philadelphia President, I don't like the map at all. I like to go home at night and I think our constituents and our businesses also deserve the opportunity to be more on that forefront, and I'd like to see that map reworked. Thank you very much.
Good evening. My name is Roberta Faison. I'm the President of Jefferson Manor Homeowners Association located in North Central Philadelphia. I'm in constant communication with the surrounding communities. I live in zip code 19122. I'm constantly in 202 communication with 23, 21, 30 and 40. The reason why I'm bringing this up, because when cable first came to Philadelphia, we were low man on the totem pole when it was Greater Media. And I looked at this map. We just happen to be in Phase 1, but my primary purpose of being here is, I am in support of Council voting for Verizon to come in with FiOS, because -- I'm talking from the ordinary everyday layperson where it hits us, in the pocket. We want better service for less money. My cable bill has gone up, up, up, up. The cable services is not that good. There's times, especially during the summer months, some of the cable goes out at least two or three times a month for two or three hours at a time. When you call Comcast and complain, they say, We're aware of the problem. We will fix it as soon as possible. That's not fair. We live in America, and I think we should have the 203 freedom of choice. Give us a chance to look at another company and see what they're offering. So this is why I'm speaking on the ordinary layman term, give us a chance to make choice. That's all I have to say.
I'd like to thank the Councilmembers for giving us the opportunity to speak here today. I want to support FiOS, the Verizon proposal. I'd like to come in from a different perspective. Those who speak about the technical parts of the proposal and those who speak about other things, I'm sure they do an adequate job, but from a service viewpoint, I viewed very carefully the proposal and I see where they're going to do things that I have tried to do in my own perspective as former administrator of the Philadelphia Cities Consumer Office. I've always noticed that when cable came in -- and I 204 sat in this room in 1980, because I had the first cable show in the City of Philadelphia called Channel One, and that was only seen on the west side of Broad Street, 17,000 homes it went into, and we provided public information access. We invited many government officials, something that is a void of what I consider today's programming. And when cable people like Emmett Fitzpatrick, District Attorney, Councilpeople, Mayor, our Commissioner -- the point is that they presented -- their offices are never given an opportunity to speak. The program that Verizon wants to present will give access to government officials, give access to the public for learning opportunities, for job training. I have 272 homebound that I serve and I have 1,000 seniors that I serve, and I can tell you that they do not have the information that is needed that they can get the opportunities that others can obtain. They feel somewhat 205 disenfranchised. With the program that I saw that Verizon is proposing, they're going to have, I believe, outlets providing 6 government access and public access, and 7 I think in that area, which probably not 8 many are presenting much attention to, I 9 think we should, and I think it would be 10 a big change if we can get this access 11 that is going to be provided by Verizon. 12 I respectfully urge your 13 support for Verizon's proposal and want 14 to thank you for the opportunity. 15 Thank you.
Sir, you didn't say your name for the record. Please say your name for the record.
Yes. My name is Al Boccella, Executive Director of the Philadelphia Consumer Council.
Good evening, Chairman Clarke and other members of the Council. My name is Bishop James Darrell Robinson. I'm Pastor of Yesha Ministries Church, also a member of the Interdenominational Churches in Philadelphia, and I work along with a lot of community groups, and many of the groups that I work with and the pastors that I work with came here to be a part of this session. Of course, they had Bible studies and other meetings they had to get to, so they could not be here. Reverend Robert Shine was here, Pastor of Berachah Baptist Church; Bishop Keith Reed, Pastor of Sharon Baptist Church; Reverend Dr. Ernest McNear; Reverend K. Marshall Williams and Reverend Dr. Garth Gittens. I'm here in support of FiOS. I'm glad that I had this opportunity to come, and I certainly appreciate Council for allowing this to be open to us to 207 come and to hear. And in hearing, I'm a little moved to say that I would hope that with this kind of investment that this company, Verizon, is wanting to put into Philadelphia, the fact that they're bringing fiberoptic technology into a city that doesn't really have it, the fact that they're bringing competition to a city that desperately needs it, I'm certainly in concert with everyone that says the rates just keep going up. I think that it's important to make the right decision here, not to delay it to the point that we force them out the door. I mean, I'm just saying the way I feel here. I think that we need to make sure that we vote expeditiously to make sure that the City and the constituents -- the pastors that were here represent probably about 20,000 to 25,000 people in the City of Philadelphia. And so we are all in support of this FiOS system, and we would hope that it's taken under consideration. 208 We listened to some of the arguments as it relates to what the FiOS system would do in terms of territory, and I would say this, that I understood clearly that it is a competitive market and they should have the option of being able to roll out in the City based on their technological breakdown. So that's where I stand with it, and, again, I appreciate this opportunity and I thank you for listening.
Reading all this, I just clarified something. The Comcast network, in all fairness to Comcast, is a fiberoptic network. Where it differs is when it comes up the street, the part that goes from the house to the curb -- to the pole is a hybrid of fiberoptic. It's not fiberoptic, but the network itself is. And I just wanted 209 that to be on the record. I asked for a clarification, because I remember reading somewhere where it said that Comcast network is fiberoptic. I just wanted to get that on the record. Thanks, Mr. Chairman.
Yes. Good evening. Thank you for your time. I'm Reverend Dr. John Craig. I'm the Associate Pastor of the Philadelphia Revival Temple Church, which is located in South Philadelphia, and I too am in support and our church is in support of having Verizon come through with their FiOS. We certainly stand behind the concept of competition, as everyone has alluded to today. We also believe that, of course, competition will help to drive down costs to the consumer. We also believe in the power of the Verizon network that will be the 210 conduit for Verizon's TV service. So in short, we do support the proposal and we would hope that, as Bishop Robinson has said, we would hope that Council would move expeditiously to put this to a vote and allow this to come forward. Thank you.
Thank you so much for your testimony. Thank all of you for being so patient. We have Ms. Rashid from the Nicetown CDC. And I actually don't have anyone else listed.
Mr. Cruz, you registered? Please come on up. How many individuals are here who wish to testify today? (One person raised their hand.)
Okay. Just come on up, please. (Witnesses approached witness 211 table.)
-- the rest of Councilmembers that are here and have left. My name is Majeedah Rashid and I represent the Nicetown CDC. I also represent the Citywide NAC Alliance, which is an organization made up of 13 neighborhood advisory committees, and as 14 well as a member of the Philadelphia 15 Association of CDCs. 16 I came here today to voice my 17 concern about the agreement being 18 considered with Verizon. As you know, 19 the Nicetown CDC is a resident-driven 20 community development corporation. My 21 concern is actually whether Verizon is 22 actually going to come to Nicetown and every other neighborhood in the City of Philadelphia. It is important for our 212 residents and businesses to have a choice as to where they will get their video, Internet and phone service. It is now possible for a small business in Nicetown to participate in the global economy, but if for some reason Verizon doesn't come to Nicetown and may have to head to East Falls or Center City, then we would be left out, as we often have been in the past. Also, if Verizon decides that there may be greater revenue potential in other areas, such as Chestnut Hill and Mount Airy, then we may also have a concern of that nature. Currently, the Nicetown CDC is able to provide Internet access to residents and businesses in Nicetown with services provided by Comcast to our organization. In turn, the Nicetown CDC can provide basic computer instruction and Internet access to area residents and businesses free of charge. I am asking Mayor Nutter and 213 City Council to ensure that Verizon provide service to every neighborhood in the City. This must be more than a promise, and there should be an effective means to ensure accountability if promises are unfulfilled. Furthermore, residents and businesses should be notified of when and where construction will occur, with ample time to prepare for inconveniences. Nicetown and other areas of Philadelphia that are under revitalization have significant construction. For example, Nicetown will have significant construction related to SEPTA's Wayne Junction development and other proposed construction in the surrounding area. Finally, what will Verizon do to improve our neighborhoods? What will they do to provide good jobs and the training that comes with it? Basically this agreement will give them a license to print money, and what do we, the communities, get in return? We really 214 need to look at that. And what we will have concrete evidence of what will be done in the communities, the neighborhoods. We have years of experience working with Comcast and other cable companies that serviced our city. We knew what to expect, but also what support we could receive from these companies. I trust you are appreciative of what can be accomplished here with a comprehensive agreement with Verizon that protects our residents and neighbors, as well as providing Verizon with new customers. I also have a concern regarding the mapping that was presented and in terms of how long it's going to take to be rolled out in certain areas. I think that Councilwoman Krajewski, as well as Councilman Rizzo, had good points regarding that mapping issue, and we really need to get more details of that. And also our Councilwoman, Councilwoman 215 Miller, in regards to the build-out, that build-out is very important in regards to how it's going to affect neighbors and communities. I, as the Executive Director of the Neighborhood Advisory Committee, am often presented with things that come and they don't have ample presentation to the communities, and often they'll come to us voicing their concern, as well as I know Councilwoman Miller can attest to that, that we get the back end of some of that. So we want to know exactly whose pavement is going to be torn up. If so, what streets are going to be torn up, what dirt is going to be tracked into homes and things of that nature. Thank you for your consideration.
Good evening. My name is Darryl Boozer. I'm the President and CEO of IBS Communications. I'm a minority-owned business here in the City 216 of Philadelphia. I'm here today to give my testimony for this FiOS franchise. I hope that the City Council passes on this bill as soon as possible, but I also hope that the City Council also holds Verizon or any other companies that comes and presents things to the City of Philadelphia, that they make sure they have minority participation. And I mean really hold their feet to the fire. I've seen a lot of bills get passed and I don't see a lot of minority participation from businesses and Philadelphia businesses. I think one way of putting our City back to work and start increasing economic empowerment is to put our companies that are in the City of Philadelphia back to business. So Verizon shouldn't subcontract outside the City. Should contract inside the City. Also, those companies that hire people that work in the City to get this contract should also make sure they hire 217 people in our communities or in your Council districts, because that's the only way you empower your people. As far as competition for the consumer, if the consumer gets savings on their bill, I think it will be great. It also will increase -- if you're looking at spending, they'll have more money to spend. A lot of times most of them are spending most of their money on cable. They're not spending their money on anything else. So if you're concerned about consumer spending and spending money in the City of Philadelphia, this is also another way. You have the competition. It will also drive down prices. Also, as far as technology, I've been in technology for a long period of time. By having other companies involved in this competition, it will also increase the technology that's doing more development in technology. And as far as -- I heard some 218 other things say as far as call centers and stuff like that. I don't see why there shouldn't be some call centers in the City of Philadelphia. We need to start putting our own people back to work. So some of the things should be involved in that agreement. Thank you.
Good evening to all. My name is Luis Cruz. I am the owner of Cruz Construction, which is based here in Philadelphia. Thank you, Chairman Clarke and all other Councilmembers of the panel, for providing me the courtesy to testify today. I come to you today to ask what is Verizon proposing to guarantee the City that will employ minority contractors and businesses in the build-out of their FiOS systems. And I hope it's not just what the agreement says, 17-600. As we know, 17-600 is the shortest section of this agreement. It's one sentence. 17-600 doesn't work. 219 I know that City Council and Mayor Nutter are on the record as wanting to increase minority participation in City-related contracts, and as you all know, private contracts with the City gives you more leverage to be able to demand more from the private sector. This should not only be an economic opportunity to Verizon, but also to contractors in the City. Only now can the City demand and hold them accountable with measured commitments and penalties. This is the only way they will keep the commitment. I know this as a fact, being in business for close to years and 17 seeing the promises made in this room and 18 breaking them as they walk out. 19 Since Verizon needs your 20 approval before it can lay one piece of fiber or crack one block of concrete, how is Council going to guarantee my company, my employees and their families, who pay taxes in this city, and others are given a real chance to participate in this 220 work? As City Council members, you have not only the authority, but also the responsibility to ensure that my company and others like me have an opportunity to grow their businesses. If I can have an opportunity to develop a meaningful and profitable relationship with Verizon, I will have the experience of professionalism to work for any company doing business in Philadelphia. The majority of minority businesses in the City employ the most people from our neighborhoods, and that's what we want to protect. Why not get Verizon to commit to giving opportunities that are measurable to local companies who employ local City residents? As you heard them say, there is no new jobs going to be created from them coming into the City. So the only way that we could get them to give us more avenues of getting more tax revenues and more opportunities in this economy is by 221 helping the businesses participate in those contracts. We need your support now more than ever to keep paying the rent, keep paying our workers, homes, taxes and raising their family. As my elected officials, you must have language in your Verizon agreement that mandates participation by minority contractors like myself, and you must provide teeth to these agreements. That means not only imposing severe penalties if Verizon does not comply, but also provisions to reward Verizon if they can exceed their goals. As they were mentioned here, percentages were mentioned here by Mr. Bishop, but yet they're not in the agreement. You have done this with other companies, like the Linc, like Citizens Ball Park, and hopefully you will expect nothing less from Verizon. But please put it in writing and pin them down to hard and verifiable numbers and deliverables. 222 I am very excited for Verizon and FiOS to come to Philadelphia, but I would rather be making a living and providing for my family, and Verizon shouldn't be the only benefactor. I, along with many other minorities, want to be working for Verizon, hopefully building a future relationship. Please ensure that this is a beneficial endeavor for everyone. Thank you again for allowing me to testify.
Thank you, Mr. Chairman. Very quickly, because the hour is very late. Mr. Cruz, I don't want you misled out of this. I think it was stated earlier the work that's going to be done is being done by the Communication Workers of America, who have a contract with Verizon. That's who is going to be doing the work. 223 So in all fairness, your company or other companies are not going to be getting jobs out of this. I think it's only fair to say that, put that on the record.
I understand that, and that's why -- I found out yesterday, and that's why I'm here today, Councilman. Because if the only thing that the City is going to benefit, as Butkovitz was saying, is $20 million, I don't think that's enough. If they're not creating any new jobs and they're not creating any new opportunities, there's got to be something that could be carved out for the businesses of the City.
Well, they have a contract with Communication Workers. Now, Communication Workers, in due respect to them, is a diverse union, but they are going to be the workforce here. So I don't want to mislead you. I mean, this Council has always been pretty strong in minority participation, and we 224 certainly know from the Communication Workers that -- like I said, they are diverse, but I don't want lead you to believe that there's going to be private companies coming in here doing the work, because it just isn't the fact.
I don't think this gentleman, Mr. Cruz, is talking about coming here and splicing fiberoptic cables. I think he's talking about digging. I think he's talking about restoration of excavations that the Communication Workers, giving them access to certain areas. You're not talking about --
-- that the Communications Workers involve themselves in. I think you're talking about the side stuff, the clean-up.
I'm not sure if they're going to be trenching. Mr. James --
If they have homes that have underground service, they've got to dig a trench to get the service to the house.
Let's let the gentleman who gets paid to give us the facts.
Councilman, to answer your question, certainly there's going to be opportunities for them to be 226 doing trenching, as well as laying fiber in the ground, but the answer to the question, with the testimony that Verizon gave earlier, they have a Supplier Diversity program, which they've committed to increasing the percentage of opportunities here in Philadelphia, and they talked about increasing their current level at percent to percent 11 in five years, to 25 percent in five 12 years after that, and to 30 percent. 13 So I believe that there is, 14 through this agreement, an opportunity 15 for Mr. Cruz's business and other local 16 businesses and minorities to participate 17 through their Economic Opportunity Plan 18 to find opportunities. So it is not a 19 franchise that is devoid of any 20 opportunity. It's just not as explicit as it was in the original franchise agreement, but it is certainly in there and they're committed goals.
Also, I'd like to add to that. Also, part of their communications, they also are going to allow theirself to demarkers, where they use a lot. They also hire companies to run things from that demark on. So there is opportunity for companies.
Well, I think one thing is for sure, though. If there is an opportunity, then we probably need a little bit more information, but we'll make sure that we support getting Philadelphians involved in that. We don't have a problem doing that at all. You know that.
You're welcome. Thank you for your testimony. Anyone else to testify on this bill? (No response.)
There being none, the Committee on Public Property and Public Works will recess until 9:00 a.m. December the 11th. (Committee on Public Property and Public Works recessed at 7:20 p.m.) - - - 229 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on December 3, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)