Update: FCC Can Void Cable Agreements

As I wrote about earlier in the week, the Federal Communications Commission (FCC) had been talking about banning exclusivity deals between landlords and cable television providers. The FCC announced today that it now has the power to nullify contracts between these private parties, which represent a monopoly within apartment buildings. According Susanne Guyer of Verizon, (reported by CNN)

“Millions of consumers live in apartments, condos or other private developments, and, until now, many of them have been denied the benefits of video competition as a result of exclusive access agreements used by cable providers to shield themselves from competition.”

Applying that logic to its extreme, one would also have to say that apartment living denies tenants access to the competition between manufacturers of gutters or windows or any number of items that come “bundled” within the contract renters sign when they choose which apartment they want to dwell in.

Despite the fact that 18 states have already passed laws similar to what the FCC will now mandate, states have protested the FCC’s presumption of jurisdiction in this matter.

But even if they win, should any regulatory body, state or federal have the ability to void a contract between two willing parties? “Monopoly” is the word that has been used to justify such action, but to what degree does choice need to be limited in order to qualify something as a monopoly? Essentially, it is the landlords who control the monopoly — they are the only ones with choice over cable provider (among other things) and they choose to bar other competitors for a set amount of time.

Similarly, renters, by virtue of choosing to live in an apartment, choose to give up their right to make certain choices about their dwelling, such as the color of paint on the outside, landscaping, and even the type of pet they can have. But is this anti-competitive? Should renters have a right to demand choices in all aspects of their building? No, for the simple reason that it isn’t their building. And shouldn’t owners be allowed to have a monopoly over their own property? Clearly, the FCC doesn’t think so.