FCC Bans Exclusive Telecommunications Contracts in Multiple Tenant Environments

The Federal Communications Commission (FCC) has voted to ban the use of exclusive contracts by telecommunications providers in contracts with apartment buildings, condominiums and other multiple tenant environments (MTEs).

Under the new rule, telephone companies cannot enter into contracts for the exclusive right to provide telecommunications services in residential MTEs, and any existing exclusive contracts cannot be enforced. The FCC found that these exclusive agreements between phone companies and building owners hurt consumers and harm competition, with little evidence of countervailing benefits. The FCC stated that exclusive contracts deny residents the benefits of increased competition, including lower prices and access to alternative providers of telecommunications services and the “triple play” of telephone, video and internet their facilities support. In 2007, the FCC banned similar exclusive deals for video services in residential apartment buildings, and in 2000, the FCC prohibited exclusive contracts for telecommunications services in commercial buildings.