New York gets Fios TV

New Yorkers will now officially be able to get Verizon's Fios TV service.

Verizon employees were at Grand Central Terminal in Manhattan Monday to market the new Fios TV service.

(Credit: Marguerite Reardon/CNET Networks)

The phone company launched the new service Monday in what is the largest launch of Fios TV to date. Initially, about 300,000 of the city's roughly 8 million residents will have access to the service. But Verizon plans to be able to offer the service to at least three million homes and businesses in New York City by year's end.

Verizon representatives were on hand all day Monday at the busy Grand Central train station in midtown Manhattan to get the word out about the launch.

Verizon, which will be competing head on with Time Warner Cable and Cablevision, is offering its basic triple package that includes 20 Mbps downstream and 10 Mpbs upstream data, phone service with unlimited local calling, and Fios TV service for an introductory rate of $94.99 for the first year of service.

Exactly how much it will cost after the promotion ends is somewhat of a mystery, if you talk to representatives at Grand Central Station. Representatives I talked to at Grand Central couldn't tell me how much I could expect to pay after the promotion. But given the competitive nature of the New York market, it's likely that consumers will not pay much more than the introductory rate and could even pay less if Verizon slashes prices to compete with Time Warner Cable and Cablevision, which also offer triple play services in different parts of New York City.

But price won't be the only differentiator for Verizon. The company also announced Monday that it will offer 100 high-definition channels in all its markets. And the plan is to increase that number to 150 channels by year's end.

Verizon launched its Fios TV service a couple of years ago and is now offering it in parts of 13 states. While the company had a banner 2007 and racked up thousands of new subscribers in the first quarter of 2008, it missed some analyst expectations for the second quarter.

But Maura Breen, Verizon's general manager for New York City, said she expects the third quarter to bring in many new subscribers. She attributed the dip in subscriber growth in the second quarter to a slowdown in marketing and promotions offered to get people to sign up for the service. And she expects the company's aggressive launch in New York City to lead the charge for the third quarter.

"I think we are going to see a knockout third quarter," she said. "We've already seen some very good presale numbers for New York City. And we expect it to be at or ahead of what we see for the rest of the Verizon territory."

New York City is a crucial market for Verizon, she added. Not only is it the biggest city in Verizon's territory, but the company has been providing phone service to New Yorkers for more than a 100 years.

"It sounds kind of corny, but we are the hometown team," she said. "We needed to be able to provide a full suite of products and services here. And New York is the toughest and most complex market, so if we can do it here, we can do it in any city."

One of the biggest challenges for Verizon has been negotiating with individual building landlords and real estate developers. The company has worked with bigger developers to sign on entire portfolios of buildings. And in March it began wiring Stuyvesant Town and Peter Cooper Village, one of Manhattan's largest apartment complexes.

But Verizon has made strong commitments to the city to have its build out complete by 2014. The deal it struck with New York's Franchise and Concession Review Committee calls for the company to make Fios available in 57 percent of Manhattan, 13 percent of the Bronx, 15 percent of Queens, 12 percent of Brooklyn, and 98 percent of Staten Island by the end of 2008.

Breen said the company has already covered 25 percent of city with fiber. And it will simply be a matter of building on that footprint and extending fiber to individual buildings. Breen said the company is committed to reaching residents in buildings both large and small. She said people interested in the service can check to see if Fios is offered in their neighborhood, and if it is and is not yet offered to their apartment building, they can request that Verizon contact the building owner to set up some kind of deal.