Cable deal means options

Tewksbury consumers will get another option for television service in the next few weeks with the entry of Verizon Corp., which hopes to pull nearly 3,000 viewers from Comcast Corp. by the end of the year.

While the two companies spar over who has the better service or lower price, industry analysts predict that the move is part of escalating competition for new media products. And local officials say the rivalry could accelerate the decline in prices for digital television service.

``The marketplace will control it," said Selectman Joseph Gill, who negotiated the deals with Verizon and Comcast as head of the town's Cable Advisory Committee. Philadelphia-based Comcast is in the second year of a 10-year contract with Tewksbury, while New York-based Verizon won a 15-year franchise agreement from the selectmen at the end of last month.

The groundwork for the negotiations with Verizon were laid last year when Town Manager David Cressman invited Verizon to install its fiber-optic network. The company then placed the thread-like fibers throughout town.

Over the past few years, two satellite TV providers had moved in on Comcast's local monopoly for pay TV. Recently, Gill tried to entice RCN Corp. to provide cable services in town, but that fell through when RCN officials backed out. RCN competes with Comcast in about 18 other local communities.

Tewksbury is the seventh Massachusetts community to sign an agreement with Verizon, out of 70 that are partially wired with the fiber-optic technology. Almost 40 of those are ready for marketing, said Verizon s pokesman Cliff Lee. Woburn signed a franchise agreement with Verizon in January, and Reading signed in February.

When consumers get a choice of products, price can be an important factor. A nationwide survey conducted last year by Consumer Technographics showed that 51 percent of residents in the 4,752 online households surveyed said they would switch from their current cable or satellite provider to a service like the one offered by Verizon if it would save them $15 per month.

Comcast and Verizon provide broadband Internet and phone service, as well as cable TV. Comparing prices is tricky because their products and packages are not identical. Verizon's premier TV package for $39.95 a month offers 180 channels, including MTV, CNN, ESPN, and Discovery, plus on-demand TV with many free options.

Comcast offers both a digital classic television service for $57.55 a month, providing sports viewing packages, the on-demand library, and the opportunity to receive premium channels such as Home Box Office and Starz for an additional fee. New Comcast customers can get a bundled $99-a-month package, which jumps to about $120 a month after a year. The bundle gives residents Internet, digital phone, and cable television service with some on-demand choices.

Comcast s pokesman Marc Goodman said Verizon's move will not have much of an effect on Comcast's customer base because Comcast's service is faster and more innovative. ``We've always had competition in every community we serve," he said.

Later this year, the company intends to form a partnership with Sprint Nextel to roll out a new generation of technology allowing customers to record and watch television programs remotely from their cellphones. Verizon's newest service allows customers to display text of local weather and traffic reports on demand, without interrupting a television program.

Goodman said Comcast customers can see cable channels from any television without a box, but for digital service and special features, cable boxes are needed at $4.75 per month. Installation fees can run as high as $45, but are waived during promotional periods. A typical installation charge is $15, Goodman said.

In many cases, Comcast's coaxial hybrid cables, running from poles to homes, are already installed and just need to be activated. Goodman said the company upgraded most of its network to fiber optics in 2003, and now provides several digital television packages. Digital television allows consumer interaction.

Though Comcast's first-quarter growth was modest -- to 21.7 million cable-TV customers from 21.5 million a year earlier -- Goodman said there's tremendous potential to attract satellite customers to cable. Maribel D. Lopez, vice president of Forrester Research, an independent technology and market research company, said there are 27 million satellite television customers nationwide.

Verizon charges $3.95 to $12 a month for each box, based on level of service. Though Verizon does not charge for installation, it can take up to six hours to run the fiber from a curbside telephone pole to the house and requires the customer to be home.

Part of the process includes connecting a router with the customer's personal computer and the network. The company wants to spend no more than $700 per installation, but has not reached its goal yet, Lee said.

Verizon is building its network in 15 states, including Rhode Island and New Hampshire. Officials expect that by the end of this year, 6 million homes will have access.

``That means it will be years before Verizon is available broadly enough to pose a threat to large cable operators," Lopez wrote in a report issued by Forrester in September.

Once in a community for six months, however, Verizon gains about 10 percent market share, Lee said. The company, which estimates there are 27,000 cable viewers in Tewksbury, aims to capture 25 percent over the next five years.

For the company to expand its market share, Lopez said, it needs to offer mass-market appeal such as ``an Internet interface with [ fiber-optic] TV for entertainment, news, and videos on demand."

Though Goodman said Comcast's pricing will not change because of Verizon's presence, Lee said Comcast tends to reduce prices once Verizon enters a local market. Goodman said prices didn't change in Reading and Woburn.

``We think it's a major victory for the consumers in Tewksbury," Lee said. ``They now are going to have a choice for TV service -- one that didn't exist before."

Joyce Pellino Crane can be reached at crane@globe.com.