FCC Bans Exclusive MDU Deals

Dealing a major blow to Comcast, Time Warner Cable and other cable TV operators, the Federal Communications Commission voted Wednesday to ban operators from cutting exclusive deals with owners of apartment buildings, condominiums and other multiple dwelling units.

The 5-0 decision was cheered by Verizon Communications and other cable competitors. “Millions of consumers live in apartments, condos or other private developments, and until now, many of them have been denied the benefits of video competition as a result of exclusive access agreements used by cable providers to shield themselves from competition,” Verizon senior vice president of federal regulatory affaris Susanne Guyer said in a prepared statement.

About 30% of Americans live in MDUs, and the numbers are growing, the FCC noted in its Report and Order banning exclusive MDU deals.

Since Verizon’s FiOS TV and AT&T’s U-verse TV have entered the pay TV market, major cable TV companies have attempted to strike exclusive contracts with building owners in hopes of thwarting competition, the FCC suggested in the order.

“Exclusive contracts between incumbent cable operators and owners of [MDUs] have been a significant barrier to competition,” FCC chairman Kevin Martin said Wednesday. “Today’s order removes this barrier.”

Lobbyists at the National Cable & Telecommunications Association were not pleased with Wednesday’s ruling.

“We continue to support a regulatory structure that treats all providers equally so that companies can compete in the marketplace, and not in the halls of government. But today’s FCC action to ban future exclusive contracts eliminates these contracts for some but not all video providers,” NCTA senior vice president for law and regulatory policy Dan Brenner said in a statement. “If eliminating exclusive contracts for some video providers is good for consumers, then it should have been applied to all providers. And the FCC’s action to terminate existing contracts is an unprecedented, legally suspect step that could harm consumers and jeopardize the delivery of advanced services to low-income neighborhoods where other video providers have chosen not to offer service.”