New York City would have the right to terminate its franchise agreements
with Time Warner Cable and Cablevision Systems if broadband-delivered
video starts to significantly erode cable TV revenue over the next 10
years, under a pact announced Tuesday. The provision -- believed to be
the first of its kind -- "helps protect City franchise revenue by
enabling the City to renegotiate if there is substantial shift in
content delivery from cable to ‘new' and/or emerging technologies," New
York's Department of Information Technology & Telecommunications
said in a fact sheet on the agreements.
City officials will have the option to terminate the agreements if
franchise fees decline 22.5% or more compared with the "peak year."
Otherwise, the franchise terms will run until July 2020, which is the
same length as the agreement reached with Verizon Communications for FiOS TV in 2008.
The agreements cap franchise fees at 5% of cable TV service revenue, the maximum allowed by federal law.