Exclusive Contracts Continue for PCOs: IMCC Report

  • FCC
  • PCO
by Valerie M. Sargent, Director of Membership & Communications, IMCC

The Independent Multi-Family Communications Council (IMCC) has been keeping its finger on the pulse of activity at the FCC regarding the agency's consideration of a Further Notice of Proposed Rulemaking (FNPRM). This FNPRM analyzed whether or not private cable operators (PCOs) should be allowed to continue to use exclusive contracts (EC) and maintain the status quo, and whether the larger direct broadcast satellite (DBS) companies, such as DIRECTV and DISH, can also use them. This same FNPRM also studied marketing agreements and bulk pricing agreements, considering whether they should be allowed to continue or whether they should be prohibited on the grounds that they are anticompetitive.

IMCC’s leaders sent many letters, made telephone calls and met with commissioners in Washington. Legal counsel Bill Burhop submitted numerous filings and had meetings with FCC commissioners and staff members, emphasizing how all three issues are essential for PCOs to continue to operate successfully. It was uncertain whether FCC members would vote in a public meeting, vote by a behind-the-scenes procedure termed by-circulation or allow the rule making to sit dormant.  Burhop and others urged  the FCC chairman to act on the issue sooner rather than later by moving forward with a vote on the issue. Such action did take place by-circulation and the vote was released, generating a Final Report & Order with regard to the issues on March 1, 2010, with all commissioners concurring.

To summarize the Final Report & Order,

  1. PCOs can continue to use ECs, bulk pricing agreements and marketing agreements.

  2. DBS can also continue use of all three types of agreements. (There was an internal debate about DBS, but the FCC finally decided to do nothing due to legal complications that would certainly have triggered court challenges.)

  3. MSOs and telcos are also treated in the same manner as before the R&O - they cannot retroactively enforce or prospectively use ECs. However, they can use bulk billing and marketing agreements.


Burhop said, “The FCC in essence analyzed the issues and decided to maintain the status quo.” The FCC also mentioned that these issues are still complicated and may still need more consideration, and that the commission may further address them in the future. There is no promise of change in either direction and no time frame for further consideration.

The entire R&O is listed on the home page of the FCC’s Web site at www.fcc.gov. This is a significant victory for the IMCC and PCOs and a good example of why a lobbying group such as IMCC is needed to champion the industry and ensure that the FCC knows what is at stake for PCOs.

PCOs, industry vendors and MDU owners who need to be updated on the latest FCC rule making developments should contact IMCC at 949-274-3434 or e-mail vsargent@imcc-online.org for more information.  A more in-depth analysis of this new order will be included in the March/April issue of Broadband Properties.

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