Sen. Clinton Weighs In on Cable-Contract Issue

Democratic Presidential Front-Runner Sides with FCC Chairman Martin

By John Eggerton -- Broadcasting & Cable, 10/25/2007 1:39:00 PM

Federal Communications Commission chairman Kevin Martin has an unusual ally in his effort to invalidate exclusive contracts between cable companies and apartment and condominium buildings: Sen. and Democratic presidential front-runner Hillary Clinton (D-N.Y.).

In a letter Wednesday to the commission’s two Democratic members obtained by B&C, Clinton said she understood that the FCC is considering "whether to limit the ability of cable operators to use exclusive access arrangement with building owners to deny residents in multiple-dwelling units (MDUs) a choice in competing video service."

A vote on that proposal is scheduled for an Oct. 31 meeting, with the commission expected to take steps to limit or invalidate such contracts. Back in March, it signaled its belief that it had authority over the contracts -- an authority disputed by the states.

Clinton said prohibiting the exclusive contracts could "help to close the gap" in the deployment of broadband service and provide "access to more capable technology and more diverse content at lower prices." Both are arguments that Martin has made in pushing for banning the exclusive contracts.

And like Martin, Clinton argued for making the change applicable to both new contracts and retroactively to existing ones, saying that she hoped the "new set of rules will ensure that the exclusive access arrangements are properly curbed both retrospectively and prospectively."

Why is Clinton weighing into the regulatory underbrush of MDU contracts? She said in the letter that she had heard from "many" of her New York constituents about the "need for consumer choice in their video and broadband options," pointing out that New York had a high proportion of apartment dwellers, including minorities.

At a minority media conference two weeks ago, Martin argued that banning the exclusive deals would benefit minorities by giving them more choice at better prices -- his talking points for a general cable-unbundling philosophy that Clinton appeared to echo in her language about choice and competition.

Others supporting banning the contracts include watchdog groups like Consumers Union and Consumer Federation of America, which are also looking to lower multichannel-video bills; competitors like Verizon Communications and AT&T, which want access to buildings now locked up in contracts with incumbents; and even Corning, which would get to lay more fiber with the increased competition.

The cable industry, joined by state legislators, argued that the FCC is overstepping its authority and by “changing the contract rules in midstream,” would “chill investment” and “harm consumers,” as the nation’s top cable company, Comcast, argued to the FCC this week in essentially a last-ditch pitch before its Oct. 31 meeting.