An appeals court refuses to stop an FCC rule that abolishes certain deals related to multiple dwelling units

Jeff Baumgartner, Senior Editor

March 10, 2008

2 Min Read
FCC's MDU Rule Lives On

The National Cable & Telecommunications Association (NCTA) has failed to persuade an appeals court to stay a new Federal Communications Commission (FCC) rule that abolishes exclusive service contracts between cable operators and owners of multiple dwelling units (MDUs), but there's still a chance the rule could be overturned.

In a 2-to-1 vote on March 7, the U.S. Court of Appeals for the D.C. Circuit rejected the NCTA's request for a stay. The rule went into effect that day.

The NCTA had no comment about the court's refusal to grant the stay, but spokesman Brian Dietz noted that the court has yet to make its final decision on whether to overturn the rule that bans exclusivity on existing service contracts.

At issue is a 2003 decision that had the FCC unanimously approving the idea of exclusive contracts between cable operators and MDUs' owners. Without a stay, any exclusive provisions in those contracts are now void.

The FCC adopted its new set of MDU rules last fall, hoping to open up competition with telcos and other service providers trying to crack the market. (See FCC Bans Cable MDU Lockups.)

U.S. cable's top pressure group originally filed its request for a stay with the FCC in December, threatening to take the matter to appeals court, which it did in late January. (See NCTA Asks for MDU Stay and NCTA Takes MDU Row to Court .)

Although the court could still overturn the exclusivity ban on contracts signed under the old rules, operators are believed to be negotiating with apartment owners as if no changes are forthcoming.

"All of the [cable] companies have been acting as if the rules have been in place," says Jim Honiotes, principal for Lynch Cable Resources Inc. , a Denver-based firm that specializes in cable MDU sales and contract work.

— Jeff Baumgartner, Site Editor, Cable Digital News

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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