FCC Poised To Ban Cable-MDU Exclusivity

Washington – The Federal Communications Commission is planning to go ahead with a vote that would ban exclusive service contracts between cable operators and the owners of apartment buildings and similar multiple dwelling units (MDUs).

The five-member agency said in a statement Wednesday night that the MDU contract vote would occur at its Oct. 31 public meeting held at the agency headquarters in Washington D.C.

The FCC, led by Republican chairman Kevin Martin, is hoping that the exclusivity ban would expand consumer choice in the selection of pay-TV providers. FCC rules already protect the right of apartment dwellers to install parabolic antennas on external railings and patios to receive programming from EchoStar and DirecTV.

Martin’s intention to alter the regulatory landscape relative to apartment buildings sets up yet another clash between him and the cable industry, which insists that MDU competition is vibrant and that the agency lacks legal authority to impose such a ban. Although AT&T and Verizon support Martin, big real estate interests agree with the cable industry.

The cable-MDU ban would help millions of consumers, especially minorities, Martin said in a recent speech. Forty percent of households headed by minorities live in apartment buildings, while apartment units make up 25% of the nation’s housing stock, he said.

Martin’s most controversial proposal is the abrogation of existing contracts rather than letting the ban take effect when existing deals expire. An immediate ban was necessary, Martin told reporters recently, because the FCC has learned that some cable-MDU contracts are perpetual.

In other action, the FCC said:

  • It would vote on a notice of proposed rulemaking regarding access to utility poles by telecommunications providers. According to Medley Global Advisors analyst Jessica Zufolo, AT&T, Verizon and the U.S. Telecom Association are concerned not just about access to poles owned by power companies but also whether the monthly per-pole fee would be comparable to the FCC-set fee paid by cable operators.
  • It would adopt rules related to the renewal of local franchises by incumbent cable operators. Last December, the agency gave local governments 90 days to act on cable service applications filed by companies, primarily phone companies, that had pre-existing access to public rights of way. At the same time, Martin said the agency would impose the same 90-day shot clock when cable incumbents seek to renew. Martin promised action within six months, but various internal battles caused the agency to miss its self-imposed deadline. Even with its own 90-day shot clock, the National Cable & Telecommunications Association is concerned that FCC rules will create an imbalance if they end up requiring cable incumbents to pay more franchise fees and provide more public access channels than new entrants.