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New FCC rules prohibit exclusivity contract clauses for multiple dwelling units

The FCC adopted a Report and Order Oct. 31 prohibiting exclusivity clauses for the provision of video services to multiple dwelling units (MDUs) or other real estate developments.

Nearly 30 percent of Americans live in MDUs, and the number is growing, according to the order.

The order is intended to promote competition for the delivery of multichannel video programming. These rules will increase choice and competition for consumers residing in MDUs and other real estate developments, according to the commission.

The order found:

  • exclusivity clauses that bar competitive entry harm competition and broadband deployment and can insulate the incumbent MVPD from any need to improve its service.
  • exclusivity clauses are widespread in agreements between MVPDs and MDU owners.
  • incumbent cable operators have increased the use of exclusivity clauses in their agreements with MDU owners with the entry of LECs into the video marketplace.
  • the use of exclusivity clauses in contracts for the provision of video services to MDUs constitutes an unfair method of competition or an unfair act or practice under Section 628(b).

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