On July 2, 2007, CAI submitted comments to the Federal Communications Commission (FCC) regarding exclusive service contracts for video services in MDUs (multiple dwelling units) and other real estate developments in response to the Commission's Notice of Proposed Rulemaking (MS Word).

CAI requested that the Commission refrain from addressing issues related to exclusive agreements between community associations and providers of video programming and other communications services. In its comments, CAI argued that "Community associations are democratically-governed organizations ... [and] because community associations respond to the needs of their members, Commission regulation of their agreements is neither necessary nor desirable." Moreover,

• Such regulation would deprive community associations of a valuable tool in ensuring that their members have access to the kinds of services they want, and would exceed the Commission's authority.
• In addition, community associations depend on their ability to enter into exclusive contracts in order to obtain a variety of benefits for their members. Without exclusivity, video programming providers are often unwilling to assume the cost of meeting an association's needs. For example, community associations can currently negotiate agreements in which they pay a bulk rate for service, giving members the benefit of a reduced price.
• Finally, service providers may require on exclusivity as a condition of upgrading their facilities in a community.

CAI outlined how exclusive agreements benefit community associations and their members:

• CAI opposes regulation of exclusive contracts because community associations need flexibility to respond to the needs of their members and other local circumstances.
• Not all community associations enter into agreements with communications service providers. Those that do not would gain no benefit from Commission regulation of such agreements, but those that do would lose a valuable right.
• CAI also notes that there are essentially three types of exclusive agreements: (1) exclusive access agreements; (2) exclusive marketing agreements; and (3) agreements giving exclusive rights to use wiring. CAI is primarily concerned with exclusive access agreements because they are the most common type entered into by CAI members. Nevertheless, all three should be preserved.
• Associations depend on exclusive access rights in order to obtain bulk rates, quality of service commitments, facility upgrades, and other benefits from providers.
• Video programming providers often agree to make special community channels available to the association. These channels, that are not available outside the community and would not be available at all if the community simply received the same service as other residents of the surrounding area, allow a community association to make announcements to residents over the cable system or carry special programming of interest to residents.
• Grants of exclusivity can be used to accelerate service improvements, and preserving exclusivity promotes competition among providers.

Additionally, CAI argued that, under the Communications Act, the FCC does not have the authority to ban or regulate the terms of agreements granting access to the property of community associations. Furthermore, "the Commission does not have authority under Section 706 of the Telecommunications Act of 1996 to regulate MDU contracts."

In summary, CAI requested that the Commission allow community associations to make their own choices about how to manage their property and obtain access to the services their members want. Please read CAI's comments (PDF).