Business & Tech

Why Verizon is finally offering cable TV competition in Boston

epa05249027 (FILE) A file picture dated 12 April 2006 shows a logo sign at the Verizon buildings in New York, New York, USA. According to reports on 08 April 2016, Verizon Communications Inc. is ready to make a bid for Yahoo Inc.'s Web business next week. Google is likewise weighing the possibility of seeking to acquire Yahoo's core business, media said. EPA/JUSTIN LANE

JUSTIN LANE/European Pressphoto Agency

Verizon avoided Boston for years as it rolled out its fiber-optic broadband service to towns around the area, and to other big East Coast cities such as New York and Philadelphia. Now, Boston has seemingly gone overnight from pariah to favored child for the telecom giant, with plans unveiled this week to bring more than $300 million in fiber-optic investment to the city over six years.

For the first time, much of the city could finally get a cable TV competitor to Comcast, a big victory for Mayor Martin J. Walsh.

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The transformation didn’t take place as suddenly as it might have seemed. In fact, a number of pieces fell into place during the course of three years to make this Boston investment a reality. (Verizon execs didn’t have much time to celebrate, though, given the massive workers’ strike that engulfed the company on Wednesday.)

So what happened? Here are some answers, according to Verizon and city officials.

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1. A more receptive audience in City Hall. Former mayor Thomas M. Menino warred with Verizon over property tax issues, and complained publicly when the company skipped Boston for the suburbs with its FiOS TV service. So a changeover at City Hall helped set the stage for Verizon’s arrival. The shift started with Paul Trane, a lead negotiator for Verizon who works at the law firm of Kerbey Harrington Pinkard LLP. Trane was tapped by the Walsh campaign to advise on telecom and tech matters, when Walsh was running for mayor in 2013. Walsh hosted Verizon executives at the Parkman House within weeks of taking over as mayor in January 2014, and made his pitch for Verizon TV service. The two sides labored for months before Verizon decided it couldn’t make the profit it wanted. But the company remained open to returning to the table.

2. Intervention from a prominent business leader. New England Patriots owner Robert Kraft developed a friendship with Walsh after he became mayor. (Kraft, by the way, is still looking at building a soccer stadium within the city limits.) The two would regularly chat about ways to improve Boston, and the subject of bringing in Verizon to compete with Comcast came up. Kraft happens to be friends with Lowell McAdam, Verizon’s CEO, and offered to bring Walsh and McAdam together to discuss the issue at Kraft’s Chestnut Hill home. The mayor and the chief executive met at Kraft’s house twice last year, with entourages in tow both times. By the time of the second meeting in December, it became clear that McAdam wanted to do a deal.

3. A big shift in Verizon’s business model. Investing big in Boston had been seen as a risk, if Verizon had to recoup its investment on the backs of hoped-for FiOS TV customers. But Verizon executives became interested in the past year in stripping out the bulk of the phone company’s old, traditional copper lines through the city, and replacing them with fiber-optic lines for a variety of reasons. Among them: developing new broadband services for well-paying business customers, and installing new antennas throughout the city to boost cellphone service, potentially readying the city for the
next generation in wireless technology.

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4. A corporate decision to “get smart.” The company unveiled plans in October to start offering more “Smart Cities” features to municipalities, such as integrating video, lighting, and traffic signal technology to improve the way a city is run. Verizon’s “Smart Cities” program is in its infancy, with ideas still being tested. The company is looking for proving grounds for those services, so it can market them to municipalities. Kraft told McAdam that Boston would be an ideal place for such a test. In Boston, Verizon said this week, the testing will begin with traffic data monitoring and signal prioritization in the Massachusetts Avenue corridor.

5. A different kind of fiber-optic rollout. There are at least two significant ways that the Boston rollout of fiber-optic lines will differ from previous FiOS expansions in most other cities and towns around here. First, city officials agreed to expedite the permits that Verizon needs — addressing the company’s long-held frustration with bureaucracy in Massachusetts. (In return, Verizon agreed to pay the city nearly $4,200 a month during the permitting phase to address new administrative costs.) Second, Verizon is approaching this rollout in a staggered fashion, starting solely with the neighborhoods of Roxbury, Dorchester, and West Roxbury. (RCN also offers television and broadband service in a few parts of the city.) Verizon officials say they plan to replace their wiring throughout Boston. But they will wait to see the demand for Verizon’s FiOS TV service before amending their cable TV license with the city — something that still needs to be negotiated — to include more neighborhoods beyond the first group.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.
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