WASHINGTON, DC — The National Multi Housing Council and National Apartment Association (NMHC/NAA) today filed a lawsuit against the Federal Communications Commission (FCC) asking the courts to strike down the FCC’s recently issued regulations retroactively banning “exclusive access” agreements between cable providers and apartment owners. The FCC regulations were announced on October 31 and published in the January 4 Federal Register.
Before they were banned, apartment owners could utilize exclusive access contracts as a bargaining chip to negotiate lower rates, expanded product availability and enhanced service standards for their residents. These exclusive access agreements also fostered competition by allowing smaller video firms to recoup the initial investment required to wire a property.
The NMHC/NAA lawsuit argues that the FCC lacks the legal authority to regulate agreements between private property owners and video providers and that the regulations are based on erroneous and unproven assertions about market conditions.
“These misguided regulations reveal a total lack of understanding on the FCC’s part about how the multifamily video market actually works,” said Jim Arbury, NMHC/NAA’s Senior Vice President of Government Affairs. “Exclusive access contracts were the primary means through which apartment owners could force the large cable firms to lower their prices and improve their service offerings. By taking this bargaining tool away from owners, the FCC has essentially removed a key incentive the cable firms had to negotiate with apartment owners.”
“While the idea of expanding competition in the telecommunications industry with the stroke of a pen appeals to some policy makers, in reality it is just not that easy,” said Arbury. “We predict that many renters will see higher prices and worse service as a result of the FCC’s actions, exactly the opposite of the Commission’s stated intention.”
“The only ones served by these regulations are the large entrenched telecom firms, who now have all the power when it comes to negotiating with apartment owners,” said Arbury. “In fact, the regulations were enacted in response to complaints by the large telecom firms who are trying to expand their market share by changing the law rather than by competing for new business. The FCC has failed to produce any evidence supporting its claim that exclusive access agreements are blocking the expansion of broadband technology.”
“Letting the FCC’s exclusive access ban stand would establish a dangerous precedent that would allow the Commission to enact further regulations interfering with the private negotiations between property owners and telecom providers,” said Arbury. “The FCC has failed to provide any evidence of a market failure that would justify government intervention. We are appealing these rules so the Commission cannot use the same erroneous exercise of legal authority or the same inaccurate/incomplete “evidence” as the basis for future actions.”
EDITOR’S NOTE: More information on the FCC regulations, including a copy of the regulations, is available at www.nmhc.org/goto/4461.
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NMHC and NAA operate a Joint Legislative Program and represent the nation’s leading firms participating in the multifamily rental housing industry. NMHC/NAA’s combined memberships are engaged in all aspects of the development and operation of apartment communities, including ownership, construction, finance and management. Together, the organizations operate a federal legislative program and provide a unified voice for the private apartment industry. Nearly one-third of Americans rent their housing, and over 14 percent of all U.S. households live in an apartment home. For more information, contact NMHC at 202/974-2300, e-mail the Council at ">, or visit NMHC’s web site at www.nmhc.org.