An “ROE contract” is an entry fee between an MDU property owner or a homeowners association (“HOA”) and a cable or broadband service provider. When a service provider seizes MDU property for the purpose of providing services to residents, it is necessary and appropriate for the owner to sign an ROE contract with the service provider because the service provider enters, operates and generates a profit on private property and the most fundamental feature of private property is the owner`s right to exclude others. The ROE agreement sets out the conditions for the service provider to access private property; If the service provider does not comply with these terms and conditions, the ROE contract may be terminated and the service provider may be withdrawn. Even after competition rules are issued, established cable companies still use ROE agreement forms that strongly favour the service provider at the expense of the real estate owner. The incumbent`s objective remains the same: to eliminate competition and consumer choice. Only the means for this have changed. For many years – before the emergence of competition from satellite TV providers (such as DIRECTV and Dish Network) and telephone companies (such as AT-T and Verizon) in MDU markets – large cable companies in their respective franchise areas held mini-monopolies, and their ROE contract forms reflected this. The owner of the MDU should simply sign the cable company`s form contract as presented and, as a general rule, simply sign. It is not uncommon in these formality agreements that the cable company would be the exclusive provider of video services as long as the company had a city or county-issued cable franchise. Then, in the early 1990s, the U.S. Congress and the FCC took steps to break local cable monopolies and facilitate MDU competition between satellite operators and subsequent phone companies in the video room. The FCC`s orders include the inside Wiring Rules, the regulation prohibiting exclusive video service contracts for MDU real estate, and the 2007 FCC rule on streamlining cable franchise processes at the national level.
With respect to the former, exclusive service rights can generally be guaranteed as long as the service provider retains exclusive control over critical infrastructure such as operating wiring and/or physical channels (lines, channels, etc.) in which wiring is placed. Although the ROE agreement states that it is “not exclusive” under FCC rules, the contract is most likely written in such a way that the building owner allows any competing provider to access a portion of the existing wiring infrastructure or to use part of the existing wiring infrastructure. Since the addition of a second parallel passage of the wiring infrastructure is not a rational economic decision, exclusive control of wiring implies exclusive service rights. It is therefore necessary to carefully review the forms relating to cable and broadband agreements to ensure that the FCC`s exclusivity rules are not indirectly circumvented. Most cable and broadband providers, particularly large, dominant companies, have their own ROE contract forms, written to favour the service provider for obvious reasons. Cable companies use two general strategies to avoid competition in MDU real estate: first, de facto exclusivity strategies and, second, strategies to ensure the perpetual right to remain in ownership beyond the expiry date of the service contract. As far as the latter is concerned, indeterminate rights are guaranteed by different methods that are more or less sneaky and often creative, which are not obvious at first sight. The point you should remember is an ROE agreement is a transaction with a certain monetary value for each party. One variable that is built into this value is the period during which access to private property