FEDERAL COMMUNICATIONS COMMISSION

The following is a summary list of issues relating to exclusive MDU contracts, regarding which we would appreciate further information from IMCC:

IMCC appears to support the Commission's proposed regulation of so-called "perpetual" exclusive contracts, but opposes any regulation of long-term, non-perpetual exclusive contracts.

• Don't long term, exclusive MDU contracts have the same anti-competitive effect as do perpetual exclusive contracts? If so, why does IMCC oppose a cap on exclusive contracts that are not "perpetual?" (It is difficult to see how the present anti-competitive effects of a long-term, exclusive MDU contract signed before the emergence of competition are muted or negated simply by the fact that the contract will expire at some definite date in the future.)
• IMCC objects to the cap proposal for a reason not discussed by Professor Whinston, namely, that any cap period (reflecting a reasonable time for recoupment of an MVPD's initial investment) is "necessarily arbitrary," given the existence of "marketplace variables." What "marketplace variables" render any cap "arbitrary?" Isn't it true that the most significant cost of wiring an MDU building is that of installing the head-end, and that this cost does not vary depending on the size of the building?
• Do IMCC members have no interest in a regulation capping existing exclusive contracts?
• Assuming that the Commission decides to cap long-term, exclusive MDU contracts, what would be the best method for calculating the length of the cap? What is the minimum term of exclusivity needed to make competitive entry by alternative MVPD's economically feasible? (IMCC says a cap must allow for at least 15 years for recoupment; most parties to this proceeding recommend a shorter period. How does IMCC justify a 15-year recoupment period?)
• Assuming that the Commission decides to implement a cap, would IMCC support abrogation of the entire contract when the cap period has expired, or simply abrogation of the exclusivity provision? (If the latter, the incumbent MVPD would retain its "right to remain" on the premises, thus preventing the MDU owner from invoking the Rules governing disposition of home run wiring; wouldn't a cap only on exclusivity be ineffective from the viewpoint of competition?)
• Aren't exclusive contracts a problem for IMCC members? With regard to exclusive contracts, what is the nature of members' complaints?
• How prevalent are so-called "revenue-sharing" agreements between MDU owners and MVPDs? How are such agreements structured? Do they represent a significant economic factor in the owner's choice of a video provider? Is it naïve to assume that MDU owners reflect the best interests of their tenants insofar as the choice of a video provider is concerned?
• How prevalent is common ownership of MDU buildings and private cable systems in MDU buildings?
• Is it true that there is less competition in the MDU market in mandatory access states than elsewhere? If so, is this attributable to the difficulty (or impossibility) of alternative MVPDs to enter into exclusive MDU contracts?
• Would it be irrational to presume that the inside wiring rules apply in mandatory access states? Do mandatory access statutes provide incumbents with a "right to remain" on the premises, such that the inside wiring rules cannot apply? What does IMCC recommend with regard to mandatory access laws and competition?