FCC Could Bar Exclusive Apartment TV Deals, under Draft Order
An order letting the FCC void exclusive video contracts between apartment building owners and pay-TV providers (CD July 6 p2) began circulating late Thursday on the eighth floor, according to FCC and industry officials. The draft from Chairman Kevin Martin’s office seems to stick closely to preliminary FCC findings that the agency can intervene in some such cases, said several industry officials. In seeking public comment March 27, the commission said it “tentatively” found that it can regulate exclusives when it finds they “impede competition and impair deployment of services.”
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That finding didn’t surprise cable or phone lawyers, but they didn’t expect a proposed order to circulate before Labor Day. They said Martin seems to have sent the order around to get a vote in September on circulation or at the FCC’s October meeting. Commissioners seem likely to approve it, according to a telecommunications lawyer, who said they are sympathetic to concerns voiced by Bells and others about cable companies being able to reduce competition for the sale of video and other services by signing deals with apartment buildings and housing developments. Cable operators often seek exclusives in areas where they learn that a phone company is poised to sell video, USTelecom said in July. Verizon and others said regulatory intervention is needed because phone companies often can’t afford to sell video and phone service without also providing broadband.
A crucial question for the cable and phone industries is whether the order lets the FCC throw out existing exclusives as anticompetitive, said attorneys on both sides. Because FCC officials are engaged with other orders needing quick votes, they couldn’t say immediately how that issue fares in the apartment-video rulemaking. A cable lawyer said there’s hope that the commission won’t authorize itself to break existing contracts. The lawyer cited FCC reluctance to do that in other situations, including cable franchise agreements. Comcast, Time Warner Cable and other cable commenters have said the FCC lacks authority to throw out exclusive contracts.