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Analyst Pooh-Poohs MDU Ruling

While the Federal Communications Commission (FCC) 's ruling this week that voids exclusive cable contracts in apartment buildings is being viewed as a big blow to cable, one analyst believes the damage done to MSOs -- as well as the benefits to telcos that want a crack at that market -- won't be all that great. (See FCC Bans Cable MDU Lockups.)

"The impact... is likely to be smaller than many investors seem to believe," writes Sanford C. Bernstein & Co. Inc. analyst Craig Moffett in a note issued Thursday morning.

He notes that the ban "will have no incremental impact in many of the most urban states," pointing out that such exclusives are already banned in 18 states, as well as the District of Columbia -- an area that covers about one third of the U.S. population.

It follows that the MSOs that will be most affected are the ones operating in non-guaranteed access states, including California.

And even in those cases, exclusivity appears to be the exception rather than the rule. On that account, roughly 25 percent of Americans live in MDUs, but only about 5 to 10 percent live in buildings covered by exclusive contracts, according to Moffett.

— Jeff Baumgartner, Site Editor, Cable Digital News

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