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NCTA Seeks MDU Ruling Reversal

The National Cable & Telecommunications Association (NCTA) fired back at the Federal Communications Commission (FCC) Tuesday, requesting that the agency stay a decision that would abolish certain cable contracts with apartment buildings and other multiple dwelling units (MDUs).

Cable's top pressure group is seeking that stay pending a judicial review, arguing that the FCC "lacks legal authority to prohibit the enforcement" of existing contracts between MDU owners and cable operators. (See NCTA Asks for MDU Stay.)

The FCC adopted the new MDU rules in late October, claiming they are necessary to spur competition in a market that has proven difficult to crack for telcos, cable overbuilders, and other non-incumbent video service providers. The FCC report found that nearly 30 percent of the U.S. population lives in MDUs. (See FCC Bans Cable MDU Lockups.)

The rules, applauded by companies such as Verizon Communications Inc. (NYSE: VZ), SureWest Communications (Nasdaq: SURW), and RCN Corp. , also sought some uniformity on the MDU access matter. Eighteen states, including New York, Florida, and Minnesota, already have mandatory access laws on the books.

The NCTA claims its arguments have been all but ignored by the FCC, while the agency accepts the "unverified assertions" of the telephone companies.

Although the new MDU order passed 5-0, FCC Commissioner Robert McDowell wondered presciently if the rules would open up a can of legal worms, considering a portion would affect present contracts and run counter to an earlier agency ruling.

"To flash cut to a new regulatory regime without a sensible transition period only begs for an appeal that could result in a court throwing out all of our Order, the good with the bad," McDowell said at the time.

The NCTA has put its own shot clock on the request, asking the FCC to rule on it by Friday, Dec. 21. If the agency doesn't act by then, the NCTA says it will seek a stay in the U.S. Court of Appeals.

An FCC spokeswoman declined to comment on the NCTA request.

In stating its case, the NCTA argued that the 2003 order allowed for exclusive agreements, which the association claims "often" required operators to invest in new or upgraded facilities.

"Those investments would be jeopardized, causing irreparable harm, if a stay is not granted," the NCTA said, adding that it is seeking a stay only on the enforcement of signed exclusive MDU deals, and not the entire order.

— Jeff Baumgartner, Site Editor, Cable Digital News

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