Cable running scared? Court nixes exclusive MDU deals

May 27, 2009

Cablecos seeking customers in multidwelling units (MDUs) now will have to woo those potential users just like any other business trying to land a sale. In other words, the era of cable exclusivity in MDUs is extinct – that is, except for deals already in place. But for the most part, from here on out, operators will have to compete against telco and satellite for MDU tenants’ eyeballs, and property owners won’t be able to dictate who their occupants rely on for pay TV.

The change – a paradigm shift, really, for residents of apartments and condos where cable has reigned supreme – comes thanks to a federal appeals court ruling this week. D.C. Circuit judges upheld a 2007 FCC vote that barred certain MDU pay-TV exclusivity agreements. For years, cable firms have held exclusive contracts with MDU owners, and for a while, that didn’t much matter since cable had few rivals. But as satellite service grew mainstream, and as telco TV blossomed from idea to execution, companies such as Verizon Communications Inc. (VZ) lobbied the FCC for the right to access MDUs, too. The FCC sided with the telco industry almost two years ago and the case then went to appeal...