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The FCC pulls the plug on exclusive telephone operator deals with multi-resident apartment buildings

After talk on Tuesday of the Federal Communications Commission considering putting the kibosh on exclusive deals between telephone companies and apartment building owners, the result vote on Wednesday gave us their answer.  The FCC voted to ban any deals between telephone operators and “residential, multi-tenant” building owners, and unanimously voted to terminate any existing contracts between parties.

The idea behind the decision is the FCC’s goal of bolstering competition in the telecommunications market.  Any scenario where there is a lack of competition must be dealt with.  The support for completion, the FCC believes, is what the drives the telecom market and allows companies to keep their prices down.  Also, competition will boost the market by allowing other players to join, drives investment, and increases the quality of services.

"One way in which the condition promotes competition is the removal of obstacles to competitive access," stated Amy Vendor, FCC’s legal counsel for this decision, prior to the vote. ” This item furthers the objective by ensuring that exclusive contracts no longer serve as obstacles to competing providers who offer telecommunications services in multiple tenant environments.”

Just last year, the FCC voted for banning contracts between cable operators and residential, multi-tenant buildings, claiming the same argument.

Multi-resident building associations and councils are not too happy about the FCC decision, arguing that there has been no evidence of market failure, so there is no reason for the FCC to extend its power into the real estate industry.

The National Multi-Housing Council, the National Apartment Association, and the National Cable & Telecommunications Association, unhappy with the vote, are currently appealing the decision.





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