On November 13, 2007, the Federal Communications Commission (FCC) issued an order confirming an October announcement that the agency would ban the enforcement of exclusivity clauses in existing video service contracts. An exclusivity clause is a contract term giving a provider, usually a cable company, the exclusive right of access or the exclusive right to provide video service in a community. The current order effects only video services, but the FCC noted that it may consider similar issues related to phone and broadband services in the future.
For many associations, such exclusivity rights have been part of the inducement to encourage cable suppliers to invest in the infrastructure to reach communities beyond their normal service area. At the same time, many associations and homeowners feel constrained by long-term contracts, created by their developer, that outlive the development process.
You can find out more about this order and how it may effect your association or your clients on CAI's political and legislative "Heads Up" page. We have prepared a brief overview of the order, along with some basic questions and answers.
I am sure that there will be more to come on this issue. Right now, it appears that a number of other organizations here in Washington will likely be filing a court challenge regarding the FCC's authority in this matter and may be seeking an injunction to prevent enforcement until such time as the legal battles are complete.
What is most interesting about this situation is that the FCC looked at this issue under its previous chairman and concluded that it did not have the statutory authority to regulate this issue. Under its current chairman, that opinion has changed and they have now concluded that they had the authority all along. As a result, this may become a test and determination of the FCC's overall authority under the Telecommunications Act of 1996, which has the potential to have impacts well beyond the limited concerns regarding contract exclusivity.
