Commissioners Eye Ban on Exclusive Apartment Phone Deals
Commissioners are eyeing a ban on exclusive deals by apartment buildings for phone service, said FCC officials. They said FCC Chairman Kevin Martin and his colleagues agreed to issue an order on the deals in the course of approving an order Wednesday barring such arrangements for cable (CD Nov 1 p2). The newer order will cover wireline services sold to apartments and housing developments, said a source. Martin agreed to issue the order as part of eighth-floor discussions preceding last week’s action to ban current and future apartment cable exclusives, said FCC officials.
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Several commissioners wanted the FCC to ban apartment exclusives beyond cable deals, said agency sources. But that order focused on cable service because it relies on section 628 of the Communications Act, which gives the FCC oversight over program access to cable operators (CD Nov 2 p3). Cable operators said the commission shouldn’t single them out.
A majority of commissioners want parallel treatment for all telecom services sold to renters and property owners in housing developments, said FCC officials. At least some commissioners back a ban on phone service exclusives, said an official. Martin has indicated to colleagues that he'd join them in opposing exclusives, that source said. A Wireline Bureau official declined to comment. The phone service order likely will be made public two months after the Oct. 31 apartment cable order appears in the Federal Register. But that rulemaking’s text can’t go into the Federal Register pipeline until it’s made public, which hasn’t happened, so it may be some time before the clock starts ticking on apartment phone rules.
In voting for the cable order, Commissioner Michael Copps said the FCC should have “gone even farther” and eliminated exclusives for all video providers. To address concerns voiced by Copps and other commissioners, Martin agreed to issue an order on satellite, private cable operators and other exclusives six months after the apartment cable notice is in the Federal Register. In little-noticed written comments Wednesday, Copps confirmed that the agency will address phone exclusives in multiple dwelling units (MDUs). “I'm pleased that my colleagues have agreed to conclude within the next two months the open proceeding examining the permissibility of exclusive contracts for telecommunications services in residential MDUs,” he said. Copps didn’t provide more details.
The phone order will pick up where the FCC left off in 2000, said agency officials. That year, commissioners voted 4-1 to ban exclusive contracts for telecom services in office buildings and other commercial multiple tenant environments (MTEs). The FCC declined to ban residential exclusives since properties were acting on their own to boost competition, it said at the time. But the agency also warned that it might step in “if such efforts do not resolve concerns regarding the ability of premises owners to unreasonably deny competing telecommunications services providers access to customers in MTEs.” Commissioners voted to issue a further rulemaking notice to seek comment on whether the agency should extend the ban to apartments. Despite the passage of years since that notice was issued, another rulemaking notice isn’t needed, since a record for action exists, said FCC officials.
Commissioners are keen to act now because an exclusive deal for a Bell to sell phone service to a building could lock out a cable operator trying to sell VoIP, said an FCC official. Cable operators sell bundles of video, broadband and VoIP service, so a ban on phone exclusives could spur competition. A ban on phone exclusives would help cable operators, said a cable lawyer. But the practical impact may be limited, since phone companies use different wires from those cable operators use, said the lawyer. That would mean a cable operator would have to rewire a building to sell pay- TV.