FCC Finally Realizes That Exclusive Deals For Cable Aren't Particularly Competitive

from the just-noticed? dept

Mon, Oct 29th 2007 10:46am — Mike Masnick

For years, a lucrative area of business for cable companies was to sign exclusive deals with apartment building and new housing developments, which would effectively lock out competitors from those markets. Often, these deals were signed with the details hidden in the fine print -- and building owners were even given rewards for not altering the contracts. The companies who signed these deals argued that they could then provide better service if they were guaranteed to be the only provider in a building -- but there doesn't seem to be much evidence that either service or prices were any better in these buildings. Bizarrely, the FCC had approved these deals claiming that they were actually helping competition (again, there doesn't seem to be much evidence to support that). Of course, when it comes to cable, there really hadn't been that much competition until more recently -- and the telcos who are just now getting into the TV business missed out on their chance to sign these kinds of deals, since the cable companies locked them all up already. So, even though the telcos would love to have these types of exclusive deals themselves, they're too late in the video space. Thus, the telcos have been complaining, and FCC boss Kevin Martin doesn't much like it when his friends at the telcos complain. So it should come as little surprise that the FCC is about to make those kinds of agreements illegal. The cable companies are gearing up to fight this in court, so it may be a little while before anything happens. Of course, the telcos have often tried to sign similar deals themselves when it comes to broadband access -- so it'll be interesting to see if those are also no longer binding.

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Filed Under: cable, exclusive, internet
Companies: comcast, fcc

12 Comments

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chris (profile), 29 Oct 2007 @ 10:59am

kevin martin encouraging competition?
is this opposite day? did i fall into some sort of alternate universe?

no, wait, it's to help the telecommunications industry who are pulling his strings. it's business as usual.

for a second there i thought the world had changed for the better.
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Chronno S. Trigger, 29 Oct 2007 @ 11:01am

relation
Wouldn't this be related to the kind of thing AT&T and Apple have, an exclusive contract to offer a product with only one service? Example: I want to live her but I have to get a specific TV provider, or I want to use this phone but I have to get this specific phone provider.

Not that I care, just pointing it out.
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- Betaflame, 29 Oct 2007 @ 11:36am
  
  Re: relation
  Well it is now legal to hack the phone to be on other providers, maybe it is a sign of better things to come... or the end of days. who knows.
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Brian, 29 Oct 2007 @ 11:51am

One Choice in Chicago
In Chicago the cable companies locked up the whole City not just an apartment complex. For most of Chicagoland, there is one cable choice... Comcast. It comes as no surprise that my bill keeps going up $5/year.

Since satellite tv doesn't work on my lot, I can't wait for IP television. I'll be the first customer.
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- matt, 29 Oct 2007 @ 11:54am
  
  Re: One Choice in Chicago
  I hate comcast. I really do. But they are not the only provider in chicago. RCN is available in SOME areas and does a ton better.
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  - Brian, 29 Oct 2007 @ 12:45pm
    
    Re: Re: One Choice in Chicago
    You are correct. RCN is available in the City of Chicago but few suburbs, and WOW is available in only a handful of neighborhoods. Unfortunately that leaves most suburbs with one choice.
    
    I just needed to complain.
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Ryan, 29 Oct 2007 @ 12:28pm

No choice in my City
Comcast has exclusive rights in my city, luckily I have a nice southern view, so Satellite is saving me $30 a month, my comcast bill was $80 a month for basic digital and 2 boxes. Satellite is $50 a month for the same programming and 4 boxes. Unfortunately Qwest has a lock on all the phone lines, so it is my only option for a DSL line provider at $50 a month (line+isp), but its better than the $65 from comcast for cable modem. This is all in a fairly large suburban area, 70,000 plus residents in my city (2nd or 3rd largest city in the metro area).

Where I work (in the middle of nowhere, less than 5,000 residents) the city has 2 cable providers (who both offer $39 cable modem), 2 phone providers (who both offer $29 DSL), not to mention a fixed wireless ISP offering wireless 128k through T1s (hella expensive, but its a choice)

Oh, well I guess I can thank my city counsel for signing those exclusive Qwest and Comcast agreements.
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Dan, 29 Oct 2007 @ 1:00pm

Some telcos have already gotten in on this racket
My apt. complex is under contract to only allow service from ATT Home Entertainment, which is just re-selling DirecTV at inflated prices. Of course the service is deplorable. I'd much rather have Time Warner, which, despite engaging in similar shenanigans throughout most of the city (San Diego), at least offers HD channels and good broadband speeds.
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Anonymous Coward, 29 Oct 2007 @ 2:11pm

I wish...

Unfortunately Qwest has a lock on all the phone lines, so it is my only option for a DSL line provider at $50 a month (line+isp), but its better than the $65 from comcast for cable modem.

I wish my DSL+line bill were only $50 or even $65. Sprint has a lock in my area so I'm giving up almsost $100/mn for line+DSL.
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Michael Whitetail, 29 Oct 2007 @ 3:19pm

Competition
While Im not happy with any monopoly, I have to say that allowing a housing/management company to sign a deal with a cable company for exclusive rights is *not* anti competitive at all. The *choice* of which company to use is given to the owners of the properties, who own the land, the buildings, and the right-of-ways inside their complexes.

The consumer *does* have a choice in the matter, but needs to do their homework first. Don't like the company this or that complex does business with, move to somewhere that does.

The choice is available to both parties involved so competition is still maintained. The only way it wouldnt be competition is if there were *no other* cable companies servicing that area. Which would make exclusive contracts redundant.
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- Ryan, 29 Oct 2007 @ 3:57pm
  
  Re: Competition
  I kind of agree to a certain point. my Grandparents PURCHASED a condo (to the tune of over $230k) I don't think in that case it would be right for a property MANAGER (not owner) to be able to force that type of thing on an OWNER. However if you are talking apartment complex, then sure I am all for the OWNER to be able to choose which company the building is using. This however is a moot point in the case of my grandparents, they are in the same city as me and forced into Comcast by the city, not the property manager. They however DO have southern view and could put up a dish. Even an apartment complex cannot stop a RENTER from putting up a dish (provided they have south view), its FCC regulation. The only thing a property owner could stop you from doing is permanantly mounting (ie drilling holes) but thats ok, theres tripod mounts and clamp mounts that need no holes drilled.
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Max Powers at http://ConsumerFight.com, 29 Oct 2007 @ 3:22pm

Cable Companies Must Perform Or Their Out
My City takes bids on providing cable service and they are very tough on the cable companies. The terms are short so the company knows it won't be around long if they don't provide superior service.

All it takes is good negotiating by the city to keep these cable companies in line. Too many people think the Cable company holds all the cards, which is not always true.
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