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Thursday, November 15, 2007

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.

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