The FCC Sounds the Death Knell for Exclusivity Clauses in Cable Agreements
Moments ago, the FCC voted to ban the enforcement of exclusivity provisions n service agreements between cable television providers and owners in multiple dwelling units (i.e., homeowners' associations and apartment building complexes).
Over the next few days I will be analyzing the impact of this vote, but until then you can read the FCC's press release here, and each FCC Commissioner's statement here.
Two questions which I have been asked many times over the past few hours are, "Is the new rule going to be applied retroactively to existing agreements?", and "Does the new rule nullify existing agreements."
The answers are, "yes" and "not likely", respectively.
The FCC has made it clear that the new rule bans the enforcement of current exclusivity provisions, and so it is fair to say that it will be applied retroactively (i.e., to existing agreements).
However, the Commissioners' statements indicate that the rule is directed solely at exclusivity provisions—not the underlying agreements themselves. Therefore, if an exclusivity provision can be extracted from the underlying agreement, then the agreement (without the exclusivity provision) can likely be enforced. If, however, the exclusivity provision cannot be excised from the underlying agreement without destroying the agreement itself, then the entire agreement may be void.
More to come....stay tuned.
NOTE: The information in this blog is for discussion purposes only; it is not intended to be, nor should it be considered, legal advice. In fact, it isn't legal advice. The hiring of a lawyer is an important decision that should not be based solely on things you read in a blog, or in a newspaper, or in an advertisement. If you have any questions, you can contact Brad Gross at bgross@becker-poliakoff.com, or call him at the law firm of Becker & Poliakoff, P.A., at 954-364-6044.
Over the next few days I will be analyzing the impact of this vote, but until then you can read the FCC's press release here, and each FCC Commissioner's statement here.
Two questions which I have been asked many times over the past few hours are, "Is the new rule going to be applied retroactively to existing agreements?", and "Does the new rule nullify existing agreements."
The answers are, "yes" and "not likely", respectively.
The FCC has made it clear that the new rule bans the enforcement of current exclusivity provisions, and so it is fair to say that it will be applied retroactively (i.e., to existing agreements).
However, the Commissioners' statements indicate that the rule is directed solely at exclusivity provisions—not the underlying agreements themselves. Therefore, if an exclusivity provision can be extracted from the underlying agreement, then the agreement (without the exclusivity provision) can likely be enforced. If, however, the exclusivity provision cannot be excised from the underlying agreement without destroying the agreement itself, then the entire agreement may be void.
More to come....stay tuned.
NOTE: The information in this blog is for discussion purposes only; it is not intended to be, nor should it be considered, legal advice. In fact, it isn't legal advice. The hiring of a lawyer is an important decision that should not be based solely on things you read in a blog, or in a newspaper, or in an advertisement. If you have any questions, you can contact Brad Gross at bgross@becker-poliakoff.com, or call him at the law firm of Becker & Poliakoff, P.A., at 954-364-6044.
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6/6/2009 3:05 AM
The Business Technology Law Blog wrote:
In late 2007, the FCC ruled that exclusivity clauses in bulk cable agreements between cable companies and owners of apartment buildings and other multi-unit developments were illegal. -
6/6/2009 3:08 AM
The Business Technology Law Blog wrote:
In late 2007, the FCC ruled that exclusivity clauses in bulk cable agreements between cable companies and owners of apartment buildings and other multi-unit developments were illegal. -
6/6/2009 3:11 AM
The Business Technology Law Blog wrote:
In late 2007, the FCC ruled that exclusivity clauses in bulk cable agreements between cable companies and owners of apartment buildings and other multi-unit developments were illegal.
Most bulk cable contracts require exclusivity in 2 areas which are 1) to provide CATV service except for FCC requirements which enable individual satellite reception and 2) exclusive use of cable infrastructure on the association property.
If the new ruling does not apply to the infrastructure which was installed at the cable provider's expense then the impact of the ruling will be significantly reduced. It would be very expensive to add a second set of wiring to the units for a new service.
The other issue is that the Florida Condominium Act (718) stipulates that bulk CATV contracts are a common expense and will be shared by all owners. If a competing CATV service was to be provided there would be 2 issues arising from 718 and most condo association documents which are:
1) All owners would pay for both services even if they only wished to use 1 of the services. You could not let owners pick a service and only pay for that individual service.
2) If owners were to pick one of the competing services, it would be expensive and an administrative burden to hook up/disconnect individual units from servics subscribed to an it could be expected that the per unit CATV charge from the provider would increase.
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Mark--you make two good points. The ruling could not apply to cable infrastructure installed at the provider's expense, becasue that is not an issue of access: that is an issue of ownership. The FCC is not divesting cable companies of the ownership of their infrastructure.
As far as the expense of re-wiring is concerned, I agree, there are several problems, cost being one of them. The other (which is often overlooked by Developers at the outset of a wiring agreement) is the availability of space (or lack thereof) in the risers through which the cables are run. Sometimes the risers are so narrow that there is no room for additional wiring. With the advent of wireless options, however, this is beoming somewhat less of a problem.
Thanks for your thoughts.
Brad
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All these new developments are fine but how about some of the old issues.As president of our condo. (391 Units) I receive many calls. One unit owner said
that since we provide her with Atlantic Broadband she decided to use their internet and telephone service. She did not pay her telephone bill promptly and they turned off her cable. Our documents state we must give each unit owner cable service, this is charged on our maintenance fee and has nothing to do with their telephone or internet. Is this legal ???.
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