Federal regulators approve ban on exclusive cable TV contracts with
Federal regulators on Wednesday approved a
rule that would ban exclusive agreements that cable television
operators have with apartment buildings, opening up competition for
other video providers that could eventually lead to lower prices.
The Federal Communications Commission unanimously approved the
change, which Chairman Kevin Martin said would help lower cable
rates for millions of subscribers who live in apartment buildings
and other multi-unit dwellings, or about 25 million households. He
said the move would particularly help minorities who
disproportionately live in multi-unit dwellings.
"There is no reason that consumers living in apartment
buildings should be locked into one service provider," he said in
a statement Wednesday.
The rule would prohibit cable companies, such as Comcast Corp.
and Time Warner Cable Inc., from enforcing existing exclusive cable
TV contracts with apartment managers and allow telecommunications
companies, such as Verizon Communications Inc. and AT&T Inc., to
offer video services along with high-speed Internet access and
phone service.
"The FCC decision will provide access to new competitive
options for residents of these properties and encourages further
deployment of broadband networks," Susanne Guyer, Verizon's senior
vice president of federal regulatory affairs, said in a statement.
But Comcast said the change is a "blow" to consumers in
apartment buildings and condos and could spur litigation for years
to come.
"The net result is that many consumers are likely to wind up
paying more for services if the FCC's interference in the
competitive marketplace stands," Comcast spokeswoman Sena
Fitzmaurice said in an e-mailed statement.
David Brenner, senior vice president with the National Cable and
Telecommunications Association -- the cable industry's lobbying
group -- called the agency's action "legally suspect" in a
statement.
A NCTA spokeswoman said the group is considering legal options,
but would not say whether it will sue. NCTA previously said it was
unlawful for the government to invalidate existing cable TV
contracts with apartment buildings and condos, but was not opposed
to a ban on future exclusive contracts.
The new FCC ruling is a reversal of its stance four years ago
when it found little evidence that the contracts stifled
competition.
FCC commissioner Robert McDowell, who agreed with the "thrust"
of the order, said the agency needs to better explain why it
reversed course and indicated the order may not hold up in court.
"I only wish we were giving our attorneys more legal ammunition
to use to defend the agency," he said.
But Martin said increased competition from telecommunications
companies now offering video services would help lower cable
prices, which have risen 93 percent in the last decade.
He said in an interview with the Associated Press on Monday that
all FCC rules are challenged in court, but still hoped groups would
be supportive of the rule's objective.
(Copyright 2007 by The Associated Press. All Rights Reserved.)
