FCC changes MDU rules

As expected, the Federal Communications Commission issued new rules today that ban exclusivity clauses in video contracts for multiple dwelling units (MDUs) or other housing developments. The ruling is considered a victory for telecom service providers getting into video because it breaks the hold cable operators have had on some MDUs.

The FCC also said it will begin a proceeding to look into exclusivity clauses held by direct broadcast satellite providers.

“Millions of consumers live in apartments, condos or other private developments, and until now, many of them have been denied the benefits of video competition as a result of exclusive access agreements used by cable providers to shield themselves from competition,” said Susanne Guyer, Verizon’s senior vice president of federal regulatory affairs, in a prepared statement. “The FCC decision will provide access to new competitive options for residents of these properties and encourages further deployment of broadband networks.”

In his statement, FCC Chairman Kevin Martin said the commission wants to foster competition to help control the increasing cost of cable TV service.

“As the commission has found, from 1995 to 2005, cable rates have risen 93%,” he said. “In 1995, cable service cost $22.37 per month. Prices for expanded basic cable service have now almost doubled. The trend in pricing of cable services is of particular importance to consumers. Since 1996 the prices of every other communications service (such as long distance and wireless calling) have declined, while cable rates have risen year after year after year.”

The move got unanimous support, something not all that common at the FCC these days.

“Today’s decision is a significant step forward not just for what it does but also for what it does not do,” Commissioner Michael Copps, a Democrat, said. “It does not prevent a property owner from negotiating a bulk discount for its residents or bargaining for heightened customer service requirements. Nor does it give any video provider the right to enter an MDU over the objection of the property owner. It simply removes a large obstacle to providing residents of MDUs with the ability to choose among alternative providers serving the surrounding community.”