An appeals court has rejected an attempt by the National Cable and Telecommunications Association to stop new rules that abolish exclusive service contracts between cable operators and owners of multiple-dwelling units (MDUs). After much lobbying from the telco industry, the Federal Communications Commission adopted the new MDU rules last fall, declaring it hoped to open the MDU sector up for competition.
By a 2-1 margin the U.S. Court of Appeals for the D.C. Circuit rejected the NCTA's attempt to have the new rules postponed. The rules now apply for new agreements but questions still remain over the legitimacy of the many MDU agreements in place before the new rules took force last week. The court has yet to give its opinion on these existing agreements. The NCTA says the FCC in 2003 unanimously approved exclusive contracts between cable operators and MDUs.
A decision to void these contracts would be a major fillip to Verizon and AT&T as they aggressively rollout their IPTV networks. Verizon has been due to announce the deployment of its FiOS network into New York city shortly. The FCC MDU ruling has been part of a concerted campaign by FCC chief Kevin Martin to challenge the dominance of the major cable companies, in particular Comcast. Martin claims the lack of competition has seen cable subscriptions rise by an average of 10 percent per annum over the last decade.
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