News
“California’s Telecom Paradigm Shift”
Voice, video, data and wireless options offer numerous choices for multifamily industry
Source: Perspectives Magazine (California Apartment Association)
September, 2007
By Don Clark
RealtyCom Partners’ CEO, Don Clark recently published an article in Perspectives Magazine for CAA on the state of the telecom industry in California and the many opportunities it presents owners and their residents. Although the piece specifically addressed California’s situation, the issues covered are a microcosm of what is happening in the residential real estate industry across the country.
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FCC Ban on Exclusive Contracts with Video Providers
Source: NMHC
[October 31, 2007] - The FCC voted to retroactively prohibit exclusive agreements between apartment firms and video service (cable) providers.
Under the FCC’s Order, apartment firms are no longer permitted to leverage their bargaining power via the granting of exclusive access agreements with video companies to provide better service and lower prices to residents. (In exchange for granting exclusive access to an apartment community for a limited term, voice, video and data companies have often offered lower fees, expanded products, and higher service standards.)
It is important to note that the FCC ban does not apply to exclusive marketing agreements and does not give providers mandatory access to properties. The ban on exclusive access agreements comes despite the fact that the FCC has on more than one occasion found that exclusive agreements in the residential setting can help create competition–in late 2000, the FCC banned exclusive contracts in commercial properties but specifically exempted apartment properties.
In recent years, NMHC/NAA, as members of the Real Access Alliance (RAA), have successfully pushed back efforts by telecom firms in a variety of states to enact legislation that would mandate forced access to residential or office buildings.
NMHC/NAA and the Real Access Alliance submitted comments to the FCC objecting to the new regulations and reminding the Commissioners that the issues at stake are very complex and do not lend themselves easily to simplistic solutions.
Despite this educational effort, the FCC now states that it is concerned with how apartment owners’ freedom to negotiate telecommunications contracts affects the Commission’s goal of encouraging multi-channel video competition and promoting broadband expansion.