FCC creates new rule prohibiting anti-competitive cable agreements
posted Sunday Feb 20, 2022 by Scott Ertz
Over the past few years, we have discussed (and complained greatly about) the terrible common policy for apartment complexes to make an exclusivity deal with one of the cable companies. It greatly limits the choice of internet and cable providers on the property (you can still legally go with satellite) while only benefitting the cable provider and apartment complex. Now, the Federal Communications Commission (FCC) has created new rules that prohibit this behavior giving those who live in apartments full choice in service.
Exclusivity hurts consumers
Almost our entire staff has lived in apartments across the country that have had these exclusivity deals. For us, it has meant issues for broadcasting and uploading the show because of internet limitations. Since moving our studio out of an apartment, we have a full collection of options for cable and internet - all the same ones that should have been available at the apartment but were not.
The fundamental aspect of our economy is that competition breeds better prices. Allowing the cable and internet companies to limit that competition within a large portion of residential properties guarantees that prices will always remain high. But, possibly, more importantly, it also means that a whole group of people is being forced into a business arrangement with a company they have no choice over.
In the cable and internet industry, many customers are unhappy with at least one of their local choices. We know that Comcast, the largest cable ad internet provider, is also one of the most hated brands in America. Customers would do nearly anything to get away from the company, but people in apartments have not always had that opportunity because of these agreements. It also prevents customers from threatening to change providers when the company does something disappointing, such as not showing up for an appointment or having an extended outage.
Choice helps consumers
The ability to choose your cable and internet provider is exactly what the FCC is trying to encourage. The ban, which was approved in a 4-0 vote, will help those in apartments whose landlords have some of these exclusivity deals. FCC Chairwoman Jessica Rosenworcel said,
One third of this country live in multi-tenant buildings where there often is only one choice for a broadband provider, and no ability to shop for a better deal. The rules we adopt today will crack down on practices that prevent competition and effectively block a consumer's ability to get lower prices or higher quality services.
Not only does the new ruleset prevent creating new revenue-sharing agreements between cable and internet providers and landlords, but it will also invalidate existing agreements. But, it does not prevent all exclusivity deals. In fact, it only outright bans the revenue sharing deals. It does require that all marketing materials for properties disclose these agreements so that future tenants can make an informed decision. According to the rules,
Such disclosure must be included on all written marketing material directed at tenants or prospective tenants of an MTE {multiple tenant environment} subject to the arrangement and must explain in clear, conspicuous, legible, and visible language that the provider has the right to exclusively market its communications services to tenants in the MTE, that such a right does not suggest that the provider is the only entity that can provide communications services to tenants in the MTE, and that service from an alternative provider may be available.
So, it's not ideal, but a good start in the right direction.
