US Courts say NO to exclusive cable rights in Apartments

The US Court of Appeals has ruled that cable companies cannot have exclusive rights to provide service in apartment buildings that they wire - upholding a Federal Communications Commission (FCC) ruling that banned the exclusive agreements as anti-competitive.

Typically cable companies (like telecommunications companies here) do deals in buildings where they install a valuable service like wiring a multi-unit building for cable in exchange for the exclusive right to provide service to all the residents. But the Federal Communications Commission (FCC) said cable operators could no longer enter into such deals and existing ones could not be enforced.

The National Cable & Telecommunications Association and a pair of affiliated real estate groups sued, saying the FCC did not justify the change in policy, consider the retroactive effects or have the authority to regulate the deals. But the appeals court sided with the FCC and said it acted well within the bounds of the law.

It’s too early to tell what effect the decision will have as existing arrangements have been in place for a long time and new service agreements will take time to be negotiated and filter through in any significant numbers.

But, it is clear that the decision will reduce (if not end) cable companies offering free or low cost cabling to buildings and, as a result, will mean that building owners will bear the cost of cabling themselves.  This is also likely to reduce the number of buildings that cable up and therefore reduce the availability and quality of cable (and other related) services to building occupants. 

From my perspective it seems a perverse outcome for a pro-competition entity like FCC: that by opening up buildings to multiple cable companies to improve resident options, no-one will cable buildings for free so there will be less cabled buildings and less resident options for cable television and other services.


So user pay principles win again .. but not necessarily to the consumers’ advantage.

Francesco ...