Mass. Regulator Kiboshes Exclusive MDU Contracts
By LINDA HAUGSTED -- Multichannel News, 7/30/2000 8:00:00 PM
Beginning next July, telecommunications competitors can no longer cut exclusive deals with landlords in multiple-dwelling-unit complexes in Massachusetts.
The state Department of Telecommunications and Energy barred the sweetheart deals last week, and stated that the policy interferes with the "sovereign choice" of tenants to "unfettered access" to their preferred providers.
The shift puts cable operators on a more even footing with competitors: They were already prevented from locking landlords into monopoly deals under the terms of the state's cable act. That act calls exclusive video deals "interference with tenant's rights."
The New England Cable Television Association took no position on the rulemaking, director of legal and regulatory affairs Rob Munnelly said. The trade association did participate in the process, and it supports the pro-competitive ruling, he added.
The DTE board opened its docket in December 1998 to update and conform its policy with the terms of federal telecommunications rules. In rendering its decision July 24, board members said the exclusivity policy needed to be changed to ensure robust economic growth and to protect high-tech workers who toil from home.
The state acted in spite of the ongoing discussion of whether an open-premises policy equates to an unlawful seizure of private property. Bell Atlantic Corp., for one, urged the state to hold off its decision until the Federal Communications Commission takes some action.
But the DTE moved forward, stating that telecommunications users are not taking space from landlords, but merely sharing space already dedicated for public use.
It further stated that landlords' legal status does not give them the right to be exclusive brokers of tenants' telecommunications services.
Multiple competitors-including Bell Atlantic (now Verizon Communications), RCN Corp., Boston Edison Co. and other competitive local-exchange carriers-participated in the rulemaking. Notable by their absence were property owners. Participants said the DTE put out a call for comment and received very little response.
The anti-exclusivity policy exempts condominiums. The DTE said condo owners are members of the management unit, so they have says in telecommunications contracts. Also exempt are apartments of four units and fewer when one of the units is owner-occupied.
The rules specify that telecommunications providers' compensation to property owners is limited to posting bonds to cover any damage that may be inflicted during installations.
Current exclusivity contracts are effective through their terms.
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