A federal ban on exclusive contracts between cable-television companies and apartment-building owners may not have a far-reaching impact in Colorado because such deals are already on the decline, some local property owners and managers say.
“I’ve steered away from doing exclusive deals with a cable or phone company,” said Mike Fiorillo, president of Denver-based property manager Apartment Concepts Unlimited. “It was real common 10 to 15 years ago. It’s not that common today.”
None of the properties he has under management is tied to an exclusive deal with a cable-TV operator, Fiorillo said.
Still, phone companies such as Qwest and Verizon Communications are lauding the Federal Communications Commission’s unanimous vote last week to prevent new deals and void existing contracts.
Verizon is spending billions to launch a video service across its local- phone-service territory, which does not include Colorado. There is an “untapped audience of apartments that we cannot touch because of these exclusive contracts,” said William Kula, a spokesman for Verizon.
Denver-based Qwest, which provides local phone service in Colorado and video service in a handful of neighborhoods, hasn’t committed to launching a video service on a broad scale. It resells DirecTV satellite-TV service through much of its 14-state local-phone-service territory.
“Qwest is eager to compete for customers in the many living units in which cable has held monopoly access, and we will identify and actively pursue these opportunities as this ruling goes into effect,” Qwest spokeswoman Carolyn Tyler said.
A final order is expected soon, though it will likely be appealed by cable-TV operators.
According to the FCC, basic- cable-service fees increased 93 percent from 1995 to 2005. Prices may drop once telecom companies launch competitive video services on a broader scale, and the ruling should help those efforts, regulators say.
The deals the FCC are banning give a cable company the exclusive rights to provide cable video services to residents in an apartment complex or condo development. In return, building owners typically receive a discount on the service, some of which is passed on to residents.
In many cases, the multiyear deals make sense for property owners only if all or a majority of their residents subscribe to cable, because they have to pay for all units regardless of whether the resident subscribes to the service.
Denver-based Corum Real Estate Group chose not to renew an exclusive contract with Comcast on a Colorado property recently because only 48 of the 74 units subscribed to cable, said vice president Rex Gambrell.
More residents are choosing to go with satellite TV, Gambrell said. Under federal law, building owners are not allowed to prevent residents from subscribing to satellite TV even if they have an exclusive deal with cable.
“When we signed these things, satellite dishes weren’t so prominent as they are today,” Gambrell said.
Four of the 15 complexes that Corum owns or manages have exclusive deals with Comcast.
“We’re actually trying to get out of these,” Gambrell said.
In the short term, many apartment dwellers may see an increase in fees when the ruling goes into effect.
“Prices will go up,” Gambrell said. “Customers are going to end up not getting the 20 percent discount.”
Comcast, the nation’s largest cable company, said as much last week after the FCC ruling was announced.
“The significant concessions building owners have been able to bargain for on behalf of their residents will be lost,” said Sena Fitzmaurice, senior director of corporate communications and government relations for Comcast.
Westminster resident Bruce Hanson, who lives at the Links at Legacy Ridge apartments, which has an exclusive deal with Comcast, said he wasn’t concerned about the expected near-term increase in fees.
“I presume that competition is going to take care of any discrepancy that occurs,” Hanson said.
Seventeen states already ban exclusive deals. Colorado isn’t among them.
The FCC ruling doesn’t affect exclusive deals that satellite-TV operators have with building owners. The commission said it will review those deals.
The ruling also doesn’t affect so-called preferred-provider agreements in which building owners and managers pitch a certain provider to residents but don’t restrict their choices.
Andy Vuong: 303-954-1209 or avuong@denverpost.com
