NCTA Takes MDU Row to Court

As promised, the National Cable & Telecommunications Association (NCTA) has filed an "emergency" motion with the U.S. Court of Appeals in the D.C. Circuit that seeks a stay on an Federal Communications Commission (FCC) order concerning current contracts with multiple-dwelling units (MDUs).

The motion, filed yesterday, has to do with a new rule that would ban cable operators from striking exclusive video deals with apartment buildings and other MDUs. The goal was to create more competitive opportunities for telcos and other service providers that wanted to crack the market. (See FCC Bans Cable MDU Lockups.)

But the ruling also affected contracts already in place, and it flew in the face of a 2003 ruling that invited exclusive deals between MSOs and MDU owners. That triggered the NCTA to formally request that the FCC stay a portion of its decision. (See NCTA Seeks MDU Ruling Reversal .)

The NCTA threatened to file suit if it saw no action from the agency -- which is precisely what happened.

"We had a limited window to file an appeal and stay before the Order was scheduled to take effect on March 7," says NCTA spokesman Brian Dietz. He would not speculate on when the cable association expects to resolve the matter, as the NCTA has yet to receive such feedback from the court.

"By this motion, NCTA seeks to stay only the latter aspect of the order, asking the Court to maintain the status quo with regard to existing contracts," the NCTA noted in the petition. It also argued that "cable operators have made substantial investments that they will not be able to recoup if the exclusivity provisions of existing contracts are abrogated."

The NCTA also expressed that the FCC "provided no reasoned explanation for its about-face from the position it took just four years ago" and that it "did not adequately consider the adverse and unfair effects of making a retroactive change."

The FCC declined to comment on the NCTA's motion.

This week's motion marks just the latest instance of cable interests taking legal action against the FCC. In November 2007, Comcast Corp. (Nasdaq: CMCSA, CMCSK) filed suit after the FCC repeatedly refused to grant the MSO a waiver on certain digital set-top models with integrated security. That case remains pending. (See Comcast Takes CableCARD Battle to Court .)

— Jeff Baumgartner, Site Editor, Cable Digital News