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Thursday, January 24, 2008

NCTA Appeals Commission’s MDU Order

On January 22, 2008, the National Cable & Telecommunications Association (“NCTA”) filed a Petition to Stay a Federal Communications Commission (“Commission”) Order, prohibiting exclusive contracts between multichannel video programming distributors (“MVPDs”) subject to section 628 of the Communications Act and owners of multiple dwelling units (“MDUs”). NCTA petitioned the D.C. Court of Appeals for review of the Order on January 16, 2008. Prior to the Commission’s ruling, exclusive contracts were not regulated by the Commission. NCTA takes issue with the fact that the Order not only bans exclusive deals on a prospective basis, but also renders all previously exclusive deals void, stripping MVPD providers of their contractual rights and jeopardizing their ability to provide video, voice and data services.

NCTA’s petition rests on the premise that the Commission has no statutory authority to prohibit exclusive deals, and even if it did, the Commission can not abrogate existing deals. Further, NCTA argues that the Commission’s decision is arbitrary and capricious as it dramatically changed its position and analysis from just four years ago and, failed to state why meddling with existing contracts results in any tangible benefit for consumers.

Given the wide range of parties involved and the nature of the issues, the Court will certainly have its hands full trying to balance the interests of all parties involved to reach a fair and workable outcome.

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