FCC Opens Cable Lock On Apartments

(AP)  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.