On January 4, 2008, the Federal Communications Commission (FCC) issued notice that it would implement its proposed ban on the use of exclusive contracts for existing video services in community associations and other multi-family housing developments. The ban would prevent cable companies from enforcing exclusivity clauses in video service contracts commencing in March 2008.
Previously, the FCC had issued an order confirming an October announcement that the agency would ban the enforcement of exclusivity clauses in existing video service contracts. An exclusivity clause is a contract term giving a provider, usually a cable company, the exclusive right of access or the exclusive right to provide video service in a community. As written, the order may affect community associations across the country.
The order applies to cable operators, telephone common carriers, and open video system operators. Providers of Direct Broadcast Satellite services and “private cable operators,” which are companies that provide video service without using local rights-of-way, are not covered
Several industry groups have challenged the FCC’s authority to implement such a ban and the challenge will most likely delay implementation of the ruling into summer.
If your association has a contract with a video or cable programming distributor, you may want to review its provisions to determine if there is an exclusivity clause, and if so, what the effect on the contract will be once the FCC order goes into effect, assuming industry groups are unsuccessful in blocking the ban.