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FCC Vote Opens Cable Competition
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Brenner said cable prices have risen to reflect more sophisticated programming technology, such as high-definition and digital TV.
The effect of eliminating such agreements could be magnified for minority residents and senior citizens, many of whom live in apartment buildings or retirement communities. Commissioners and consumer groups say increasing competition would reduce prices for minorities, seniors and people with low incomes. But some minority advocates argue that cable operators would have no incentive to reach low-income areas without exclusive contracts.
"These arrangements have helped provide companies with the guaranteed customer base necessary to justify investing in some of the more hard-to-reach places," said former D.C. Council member Sandra C. Allen (D-Ward 8). "We have to fight against the desire by some new entrants to only serve the wealthiest residents while bypassing lower-income homes."
Seventeen states, including Virginia and the District, have outlawed exclusive agreements between cable companies and property owners, but the rule is not always enforced. Maryland allows the contracts, which would be prohibited by the FCC's rule.
RCN, based in Herndon, has been shut out of Montgomery County apartment buildings that have exclusive deals, said Richard Ramlall, senior vice president of strategic and external affairs. "The new FCC law would be very helpful to us," he said. "We can finally knock on these doors and be competitive."
Not all smaller competitors will benefit. Shenandoah Telecommunications, which serves parts of Virginia and Maryland, and OpenBand in Northern Virginia say they cannot afford to extend their networks without the return on investment guaranteed by exclusive contracts.
Cable companies often offer service at discounts in exchange for bulk subscriptions. Some property owners fear that they will have to pay more to rewire their buildings for competitors.
"That could drive up rents as the cost is shifted back to developers," said Richard Holtz, chief executive of InfiniSys Electronic Architects, a consulting firm that helps property owners negotiate agreements with cable companies. "It's tough to justify having more than one provider."
