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INCOMPAS: FCC Needs to Nix Exclusivity Agreements

INCOMPAS, which represents internet companies and competitive telecoms, wants the FCC to open up multiple tenant/dwelling units (MTEs/MDUs) to more competition.

The FCC had sought input on how to boost broadband deployment to apartment buildings and condominiums, part of a larger effort to expand broadband access.

INCOMPAS, in reply comments to that inquiry, said that the FCC needs to end the use by incumbent providers of "revenue sharing, kickbacks, exclusive wiring arrangements and exclusive marketing agreements."

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That would promote the kind of competition that is critical to the FCC's goal of bridging the digital divide. Without it, said INCOMPAS, the business case for competitive providers is imperiled.

While the FCC a decade ago voted to prohibit MVPDs and telecom providers from exclusive contracts serving MTEs/MDUs, INCOMPAS says those have been replaced with "equally pernicious" revenue sharing and wiring exclusivity agreements, and the exclusivity prohibition did not extend to bulk billing or marketing agreements that are de facto exclusivity agreements.

"Even where incumbent providers adhere to the letter of the exclusive service contracts prohibition," INCOMPAS argues, "they are able and willing to impose terms and conditions on property owners and their residents that have the same result as such prohibited arrangements."

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INCOMPAS wants the FCC to open a rulemaking to prohibit exclusive agreements by all video, telecom and broadband providers.

INCOMPAS says the FCC should also "open an inquiry into the use of rooftop exclusivity agreements to determine whether such arrangements should be included in any new rules," but should not preempt state and local governments on laws that allow access to MTEs/MDUs.

Cable operators argue that bulk billing arrangements and exclusive marketing arrangements benefit consumers and that eliminating them would impede broadband deployment. "[T]here are no signs of market failure that would warrant regulating these private contracts," NCTA-The Internet & Television Association told the FCC.

John Eggerton
John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.