Commission Voids Exclusive Deals in MDUs.

The Federal Communications Commission ("FCC" or "Commission") released the full text of the order adopted at its October 31, 2007 meeting, which takes the unprecedented step of voiding existing exclusive contracts between multichannel video programming distributors ("MVPDs") subject to Section 628 of the Communications Act of 1934, as amended, and owners of Multiple Dwelling Units ("MDUs"). The order applies retrospectively to existing contracts as well as any future agreements.

This order is the FCC’s latest gift to AT&T and Verizon, who are in the midst of rolling out their own video services. The order is one of the most extensive and abrupt policy changes ever taken by the Commission. The FCC’s actions will no doubt be challenged in court by both the cable and MDU industries on the basis that it constitutes an unconstitutional regulatory taking (an argument the FCC attempts to defend against in five short paragraphs of the order (¶¶ 56-60)). Once again the FCC relied on its "ancillary jurisdiction" to take sweeping regulatory action.

Martin Proposes Leased Access Rate Cut

Today, Kevin Martin, chairman of the Federal Communications Commission, proposed a 75% cut on the rates that cable television companies may charge for leased access to spare channels. Martin’s proposal calls for the current rate of $.40 per subscriber to be cut to $.10 per subscriber in the hopes of promoting competition and bringing more programming from women and minorities into the market.

It remains to be seen whether such a drastic rate cut is merited. The Commission is expected to vote on the proposal later this month.

Commission Expands Local Number Portability Obligations to Interconnected VoIP Providers

In an Order released Nov. 8, 2007, the Federal Communications Commission (“Commission”) took several actions relating to local number portability (“LNP”) that affect all carriers, including VoIP carriers.

With the ostensible goal of streamlining the LNP process across the telecommunications industry, the Commission unequivocally extended LNP obligations to interconnected VoIP providers for the first time. Imposition of such obligations is ironic, in light of the fact that VoIP providers still have no right to obtain numbers directly, and instead typically rely on partner CLECs in order to provide numbers to their end users. The Commission reiterated that entities obligated to provide local number porting, including VoIP providers, may not obstruct or delay the porting process by demanding excessive information from the porting-in entity. The Commission also issued a Final Regulatory Flexibility Analysis (“RFA”), in response to the D.C. Circuit’s stay of the Commission’s 2003 Intermodal Number Portability Order. In response to the D.C. Circuit, the FCC clarified that wireline carriers qualifying as small entities under the RFA are required to port numbers to wireless carriers when the wireless carrier’s coverage area overlaps the location of the territory where the wireline number is provisioned, provided that the porting-in carrier maintained the number’s original rate center designation following the port.

This is the FCC’s latest order in a series of orders that has extended traditional wireline regulation to interconnected VoIP carriers citing its exercise of its “ancillary jurisdiction;” the same rationale provided by the FCC (and upheld by the D.C. Circuit) in imposing USF obligations on other interconnected VoIP carriers.