BackerReport |
|
||||||||||||||||
BackerReport is a periodical addressing topics of interest to community associations in South Florida and is provided as a service to the clients and friends of Backer Law Firm, P.A. All articles are written by attorneys of Backer Law Firm, P.A. (unless otherwise indicated) and are protected by copyright. It is important to note that court decisions discussed in this newsletter are sometimes subject to change as the parties pursue further appeals or other remedies. The articles that discuss court cases in this newsletter are based upon the courts' decisions that are released when the newsletter was written.
Cable companies historically have entered
into contracts with condominiums and other
multiple family communities to effectively
limit the ability of the community to
contract for similar services with
competitors. Many cable companies installed
wiring in the communities and justified their
restrictive contracts by arguing that they
were necessary to allow the company to recoup
the cost of the installation of the wiring.
On May 26, 2009, the United States Court of
Appeal for the District of Columbia in
National Cable & Telecommunications
Association v. Federal Communications
Commission upheld an FCC rule that
forbade cable operators from entering into
new exclusivity contracts and also forbade
the enforcement of existing exclusive
contracts. The FCC rule in question
represented a reversal of an order the FCC
had entered in 2003. The referenced case may
be the subject of a motion for rehearing
(which would likely be denied) and may become
the subject of an appeal to the United States
Supreme Court. Until it is reversed or
revised, it is the current state of the law
on this issue.
The Federal Communications Act makes it
unlawful for a cable operator to engage in
unfair methods of competition or unfair or
deceptive acts or practices, the purpose of
which is to hinder significantly or to
prevent any multichannel video programming
distributor from providing satellite cable
programming or satellite broadcast
programming to subscribers or consumers. Even
though you may not be getting your television
from what you may consider a satellite
provider, the Act applies to cable companies
since nearly all programming today is
delivered via satellite to the cable company
and then distributed through their wired
network. The court held that is
inconsistent with the Act for a cable company
to engage in practices which prevent other
cable companies from providing television
programming to a community.
In upholding the FCC rule, the court held
that the language of the statute in question
was written in broad, sweeping language. As
such, the court held that the language should
be given broad, sweeping application. Based
upon the court's opinion that the statute
should be construed broadly, if a court were
asked to consider whether a practice or
contract provision with a cable provider was
invalid, a determination of whether the
practice or contract has the effect to hinder
significantly the ability of another company
from providing service to the community would
need to be made.
Some cable contracts contain language that
requires that the association negotiate
exclusively with the cable provider for a
period of say, 60 days after termination of
the contract. Some contracts also provide the
cable company with a right to match any
competitor's proposal and mandates that the
association renew with the provider if it
chooses to match the competitor's proposal.
The effect of the language in many existing
cable contracts is that the association would
not be able to negotiate a contract with a
competitor and plan to have it begin at the
expiration of the existing contract. The
association would be forced to wait until
after the exclusive negotiation period to
even negotiate with a competitor and then
would have to wait an additional period while
the former cable provider decides whether to
match the offer. Since These kind of clauses
are the type which we will likely see being
analyzed in light of the recent decision I
cited above.
If your community has a contract with a cable
provider may be expiring in the near future,
your Board will want to provide a copy of the
contract to your association's attorney to
seek counsel about the effect of the recent
decision on your association's legal rights
and your ability to shop for competitive
television programming delivery services.
You may obtain back issues of BackerReport online by going to our website www.BackerLawFirm.com. Click the image above. |
||||||||||||||||