FCC to Dwell on Apartment-Phone Deal Ban
AP , Washington: Mar 18 2008
Made Popular Mar 18 2008
United States :

Telephone companies that exclusively give apartment buildings service will likely have to unplug and let tenants have their pick of providers.

The Federal Communications Commission on Wednesday is expected to prohibit the exclusive voice and data contracts that telecommunications carriers negotiate with the buildings, in the same way the agency banned cozy cable deals. It’s unclear how many exclusive telecom arrangements exist.

To give tenants more video choices, the FCC last year banned exclusivity between cable television companies and residential apartment buildings. Wednesday’s expected decision is also consistent with the FCC’s restriction of exclusive voice and data contracts with commercial office buildings in 2000.

FCC Chairman Kevin Martin told reporters two weeks ago that prohibiting exclusive arrangements in apartment buildings would put cable and telephone operators on a level playing field.

Several telecom companies and trade groups have filed comments in support of the FCC’s proposed ban in residential dwellings. The real estate industry doesn’t want to open the door to more regulation in its properties.

“Exclusive contracts between carriers and building owners create barriers to entry and arbitrarily limit the ability of consumers to exercise competitive choice,” Mary Albert, assistant general counsel with telecom trade group Comptel, said in an e-mail. The group’s members include Qwest Communications, Embarq Corp and XO Communications LLC.

Major telecom carriers, such as AT&T Inc. and Verizon Communications Inc., also rang in their support of the ban, echoing their stance on cable exclusivity in recent FCC filings.

Verizon does not have such special arrangements with apartment buildings, a company spokesman said.

An AT&T spokesman said the company may have a few such deals, but they “represent the exception to the rule.”

Rules, imposed by a communications regulator, are exactly what building owners oppose.

“We’re concerned the FCC is extending in various ways or might extend its reach further into the real estate industry, but it has no authority to regulate it,” said Attorney Matthew Ames, who represents a coalition of housing and real estate groups, including the National Multi Housing Council, Building Owners and Managers Association and the National Apartment Association.

Real estate groups don’t see any threat to competition for phone services.

“Without evidence of a market failure, the need for FCC regulation in this area seems to be unwarranted,” said Betsy Feigin Befus, vice president and counsel with the National Multi Housing Council.

The council also bristled at the FCC’s decision to ban cable operators from signing apartment-building owners and managers to exclusive deals for future and existing agreements. NMHC, the National Cable & Telecommunications Association and the National Apartment Association are appealing the FCC decision in court.

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