FCC bans exclusivity agreements for telecommunication services in residential tenant complexes

In October 2007, the Federal Communications Commission issued an order banning the use of exclusivity clauses in multichannel video service contracts between video service providers (e.g., cable companies) and multiple dwelling units (e.g., apartments and other multi-family dwellings).  The order stated that “exclusivity clauses that bar competitive entry harm competition and broadband deployment.”

On March 19, 2008, the FCC issued an order that extended the ban to include exclusivity clauses for telecommunication service provider contracts.  Thus, in residential, multiple tenant environments, telecommunication service contracts now also must be non-exclusive.  (Commercial MTEs are still subject to a prior , similar ban issued in 2000. )

To the extent that existing contracts require exclusivity, the FCC order states that the exclusivity clause may not be enforced.

The rule also clarifies that hotels are not “tenant” environments and thus are not subject to the ban. 

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