F.C.C. Set to End Sole Cable Deals for Apartments

[David Farber <dfarber () cs cmu edu>]

Begin forwarded message:

From: Richard Forno <rforno () infowarrior org>
Date: October 29, 2007 9:24:13 AM EDT
To: Infowarrior List <infowarrior () attrition org>
Cc: Dave Farber <dave () farber net>
Subject: F.C.C. Set to End Sole Cable Deals for Apartments

(from the NYT)

F.C.C. Set to End Sole Cable Deals for Apartments
By STEPHEN LABATON

WASHINGTON, Oct. 28 —The Federal Communications Commission, hoping to  
reduce
the rising costs of cable television, is preparing to strike down  
thousands
of contracts this week that gave individual cable companies exclusive  
rights
to provide service to an apartment building, the agency’s chairman says.

The new rule could open markets across the country to far-ranging
competition. It would also be a huge victory for Verizon  
Communications and
AT&T, which have challenged the cable industry by offering their own  
video
services. The two companies have lobbied aggressively for the provision.
They have been supported in their fight by consumer groups, satellite
television companies and small rivals to the big cable providers.

Commission officials and consumer groups said the new rule could
significantly lower cable prices for millions of subscribers who live in
apartment buildings and have had no choice in selecting a company for  
paid
television. Government and private studies show that when a second cable
company enters a market, prices can drop as much as 30 percent.

The change, which is set to be approved Wednesday, is expected to have a
particular effect on prices for low-income and minority families.  
They have
seen cable prices rise about three times the rate of inflation over  
the last
decade. A quarter of American households live in apartment buildings  
housing
50 or more residents, but 40 percent of households headed by  
Hispanics and
African-Americans live in such buildings.

“Exclusive contracts have been one of the most significant barriers to
competition,” Kevin J. Martin, chairman of the commission, said in an
interview. Cable prices have risen “about 93 percent in the last 10  
years,”
he said. “This is a way to introduce additional competition, which will
result in lower prices and greater innovation.”

The decision is the latest in a series of actions by the commission  
under
Mr. Martin to put pressure on cable companies to lower their rates  
and make
their markets more competitive. In December, in a 3-to-2 decision, the
commission approved a proposal by Mr. Martin to force municipalities to
accelerate the local approval process for the telephone companies to  
enter
new markets. The phone companies had asserted that many  
municipalities had
been delaying approvals, often in the face of cable industry lobbying.

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