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FCC Adopts Notice of Proposed Rulemaking Seeking Comment on Exclusive Contracts for the Provision of Video Services to Multiple Dwelling Units.

March 23,2007

The FCC initiated a Notice of Proposed Rulemaking on March 22,2007 seeking comment on video providers' use of exclusive contracts in multiple dwelling units ("MDUs") and the impact of those contracts on video competition and accelerated broadband deployment. The Commission previously addressed this issue in 1997 and 2003, but decided against taking any action. The Commission initiated the present proceeding in reaction to complaints filed by competitive providers alleging that exclusive contracts between video service providers and MDUs prevent competitors from entering the MDU market and, in turn, deprive consumers of the benefits of video competition.

The Notice seeks comment on the following specific issues:

• The existing state for service providers trying to gain access to MDUs, including the use of exclusive contracts.

• The effect of exclusive contracts on "consumer choice and video competition," and whether entering into exclusive contracts "reduces the likelihood of competitive entry."

• Actions that the Commission should take to ensure that exclusive contracts "do not unreasonably impede competitive video entry."

The Commission has also tentatively concluded that it is authorized to regulate exclusive contracts for video service, where the Commission has determined that such contracts "impede competition" and "impair deployment of those services."

We would be pleased to respond to any questions regarding this matter.

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