FCC Scrutinizes Apartment Building Exclusive Video Deals
The FCC could regulate exclusive deals between cable operators and apartment building owners when the pacts are found to be anticompetitive, under preliminary conclusions of a rulemaking approved by the FCC Thurs. After declining to address the issue as recently as 2003, the FCC reversed course out of concern that such deals slow telco TV and broadband deployment, said staffers and commissioners. Commissioners voted to issue a notice of proposed rulemaking (NPRM) seeking comment on what Media Bureau lawyer Holly Saurer called a tentative finding.
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The FCC will seek comment on whether it should have oversight of pacts between multiple dwelling units (MDUs) and pay-TV providers, Saurer told the meeting. Apartment dwellers typically get a discount on video service under such deals, but can’t choose between wireline video providers. Verizon has complained such agreements are hindering its FiOS fiber TV rollout. Telcos cheered the rulemaking.
The NPRM will ask about various video business practices. “The notice seeks comment on the current environment for service providers attempting to obtain access to MDUs or other real estate developments,” said an agency news release. It said comment will be sought on “the impact of exclusive contracts on consumer choice and video competition, and whether the use of exclusive contacts reduces the likelihood of competitive entry… [and] what specific steps the Commission should take to ensure that exclusive contracts do not unreasonably impede competitive video entry.” The text of the rulemaking wasn’t released right away.
The agency similarly framed questions in the franchise rulemaking completed this month with the release of an order setting limits on what conditions cities can impose on telcos in letting them sell video. Cable operators had criticized the franchise order as overstepping the FCC’s authority. NCTA declined to comment on the MDU inquiry. Sec. 628a of the Telecom Act gives the FCC authority to intervene when exclusive video deals reduce competition, Media Bureau Chief Monica Desai told us.
Hurdles to telco video deals with apartments may slow broadband deployment -- and pay-TV competition -- several commissioners said. “There is no reason why Americans who happen to live in MDUs should have a narrower range of choice when it comes to video and broadband service than Americans who live in free-standing buildings,” said Comr. Copps. Comr. Tate said the NPRM fulfills Congress’s mandate for the FCC to spur broadband and video deployment. Comr. McDowell said the importance of the rulemaking is highlighted by increased marketing of video, phone and broadband in discounted packages: “I am pleased this item examines building access issues in a platform-neutral manner with respect to all video providers.”
Martin linked the need for an NPRM to rising cable rates, saying telcos have complained exclusive apartment- video deals are roadblocks. “All the commissioners agree” on the need to dampen rate increases, he told us after the meeting. USTelecom said exclusive MDU agreements hurt competition and mean consumers “are held hostage to these long-term exclusive cable contracts that force them to go with one video provider or none at all.” Verizon concurred: “The FCC is right to investigate this issue.” - Jonathan Make