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New Neighbors in the Apartments: Telcos?

In a move it says will promote multichannel video competition, the FCC ruled that building superintendents and others can no longer make or enforce exclusive deals with video providers that would prevent new entrants from offering video services to residents of apartments and other multiple-dwelling units (MDUs).

The order at the commission’s Oct. 31 meeting was opposed by the cable industry, which benefits from most of the exclusive deals, and was supported by would-be alternative providers such as phone companies, as well as by major consumer groups.

Cable companies have argued that exclusive contracts enable viewers to get better deals on video services, and that the deals encourage investments and infrastructure development. Potential entrants into the MDUs argued that exclusive bans stifle competition and seem specifically tailored to thwart new investment and technological development.

The Manufactured Housing Institute defended exclusivity clauses, saying that forbidding such contracts would be “an impulsive regulatory overreach that could do more harm than good by wiping away, by regulatory fiat, many contracts which [sic] benefit residents of manufactured home communities.”

Corning, makers of bend-insensitive fiber intended for the MDU market, told the commission that banning the exclusivity clauses would “ensure that the benefits associated with the new technology extend to all residents who reside in MDUs.”

The commission agreed, finding that the clauses harm competition and broadband deployment and can insulate the incumbent MVPD from any need to improve its service. It also found that such clauses are widespread.

“I believe that people that live in apartment buildings deserve to have the same choices as people that live in the suburbs,” FCC Chairman Kevin Martin said in a statement. He also noted that more than one-fourth of all Americans live in MDUs—and 40 percent of all households headed by Hispanics or African-Americans.