Lansdowne on the Potomac Homeowners Ass'n v. OpenBand at Lansdowne, LLC , 713 F.3d 187 ( 2013 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LANSDOWNE ON THE POTOMAC 
HOMEOWNERS ASSOCIATION, INC.,
Plaintiff-Appellee,
v.
OPENBAND AT LANSDOWNE, LLC;
OPENBAND SPE, LLC; OPENBAND
MULTIMEDIA, LLC; M.C. DEAN,
INC.,
Defendants-Appellants,
and  No. 12-1925
LCD COMMUNICATIONS, LLC;
OPENBAND OF VIRGINIA, LLC;
WILLIAM H. DEAN; LANSDOWNE
COMMUNITY DEVELOPMENT, LLC,
Defendants.
FEDERAL COMMUNICATIONS
COMMISSION,
Amicus Supporting Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Anthony J. Trenga, District Judge.
(1:11-cv-00872-AJT-TCB)
Argued: January 29, 2013
Decided: April 5, 2013
2 LANSDOWNE v. OPENBAND
Before WILKINSON, MOTZ, and THACKER,
Circuit Judges.
Affirmed by published opinion. Judge Wilkinson wrote the
opinion, in which Judge Motz and Judge Thacker joined.
COUNSEL
ARGUED: Sanford M. Saunders, Jr., GREENBERG
TRAURIG, LLP, Washington, D.C., for Appellants. Christo-
pher J. Wright, WILTSHIRE & GRANNIS, LLP, Washing-
ton, D.C., for Appellee. ON BRIEF: Robert P. Charrow,
Laura Metcoff Klaus, GREENBERG TRAURIG, LLP, Wash-
ington, D.C., for Appellants. Steven A. Fredley, Mark D.
Davis, WILTSHIRE & GRANNIS, LLP, Washington, D.C.,
for Appellee. Sean A. Lev, General Counsel, Peter Karanjia,
Deputy General Counsel, Jacob M. Lewis, Associate General
Counsel, Matthew J. Dunne, Counsel, FEDERAL COMMU-
NICATIONS COMMISSION, Washington, D.C., for Amicus
Supporting Appellee.
OPINION
WILKINSON, Circuit Judge:
Lansdowne on the Potomac Homeowners Association sued
OpenBand, a group of interlocking entities that provides cable
services to the Lansdowne on the Potomac real estate develop-
ment.1 The homeowners association alleged that OpenBand
1
We use the name "OpenBand" to refer collectively to all of the defen-
dants (now appellants) in this case: OpenBand at Lansdowne, OpenBand
Multimedia, OpenBand SPE, OpenBand of Virginia, and their common
corporate parent, M.C. Dean, Inc.
LANSDOWNE v. OPENBAND 3
entered into a series of contracts that conferred upon Open-
Band the exclusive right to provide video services to the
development, in violation of an order of the Federal Commu-
nications Commission prohibiting such exclusivity arrange-
ments. The district court agreed, declaring the challenged
provisions null and void and permanently enjoining their
enforcement. Because the contract provisions prohibit com-
peting cable providers from accessing the Lansdowne devel-
opment in patent violation of the FCC’s Order, we affirm the
judgment of the district court.
I.
A.
In 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act ("1992 Cable Act"), Pub. L.
No. 102-385, 106 Stat. 1460. Congress made several findings
in passing the Act, among them that "most cable television
subscribers have no opportunity to select between competing
cable systems"; that this lack of competition had led to "undue
market power for the cable operator as compared to that of
consumers"; and that cable prices were rising almost three
times faster than the rate of inflation. 1992 Cable Act
§ 2(a)(2), (1), 106 Stat. at 1460. The Act accordingly made it
unlawful for a cable operator to engage in "unfair methods of
competition or unfair or deceptive acts or practices, the pur-
pose or effect of which is to hinder significantly or to prevent"
any other operator from providing services to consumers. 47
U.S.C. § 548(b). The Act also authorized the FCC to "pre-
scribe regulations to specify particular conduct that is prohib-
ited by" this provision. Id. § 548(c)(1).
Pursuant to that authority, the FCC issued a notice of pro-
posed rulemaking in March 2007 soliciting comments on the
propriety of a practice popular among cable operators: the use
of "exclusivity clauses" that grant the operator exclusive
access for providing video services within a particular multi-
4 LANSDOWNE v. OPENBAND
ple dwelling unit ("MDU"). Exclusive Service Contracts for
Provision of Video Services in Multiple Dwelling Units and
Other Real Estate Developments, 22 FCC Rcd. 5,935 (pro-
posed Mar. 27, 2007). In response, the FCC received com-
ments revealing that exclusivity clauses "have the clear effect
of barring new entry into MDUs by wire-based" video provid-
ers and that such clauses were "widespread" and increasing in
their use. Exclusive Service Contracts for Provision of Video
Services in Multiple Dwelling Units and Other Real Estate
Developments, 22 FCC Rcd. 20,235 ¶¶ 10, 15 (Nov. 27, 2007)
("Exclusivity Order"). Commenters also highlighted the inju-
ries that exclusivity clauses inflict upon consumers, such as
increased prices, lower quality, and a reduced menu of cable
channel options. See id. ¶ 17-23. The FCC thus concluded that
"exclusivity clauses cause significant harm to competition and
consumers" and that "the harms of [such] clauses outweigh
their benefits." Id. ¶ 26.
Based on this record, the FCC unanimously adopted the
Exclusivity Order at issue in this case. The order sets forth the
following rule: "[N]o cable operator . . . shall enforce or exe-
cute any provision in a contract that grants it the exclusive
right to provide any video programming service (alone or in
combination with other services) to a MDU. Any such exclu-
sivity clause shall be null and void." Exclusivity Order ¶ 31
(codified at 47 C.F.R. § 76.2000(a)).
B.
In 1999, a partnership of Virginia land developers created
the Lansdowne Community Development ("LCD"), a limited
liability company with the purpose of developing a residential
community known as Lansdowne on the Potomac in Loudoun
County, Virginia. The Lansdowne development comprises
roughly 850 acres of land, upon which some 2,155 individual
homes are built. Although Lansdowne residents own their
own homes, all residents share an interest in common areas
that require central management. LCD therefore created
LANSDOWNE v. OPENBAND 5
appellee, the Lansdowne on the Potomac Homeowners Asso-
ciation ("LHOA" or "the homeowners association"), to pro-
vide for the management of the development and amenities
such as video, phone, and internet services.
In the process of planning the development, LCD engaged
M.C. Dean, Inc., a Virginia technical services contractor, to
design and install telecommunications systems in the commu-
nity. For its part, according to M.C. Dean’s CEO, the com-
pany sought from LCD the "exclusive right to provide . . .
telecommunication services" to Lansdowne. M.C. Dean cre-
ated a number of corporate entities and entered into a series
of contemporaneous, interlocking contractual arrangements to
achieve this end.
The structure of this whole enterprise was a convoluted
one. With respect to the corporate entities, M.C. Dean formed
OpenBand at Lansdowne ("OBL"), a limited liability com-
pany with the purpose of developing and administering tele-
communication services at Lansdowne. OBL had two
members: a wholly owned subsidiary of M.C. Dean’s called
OpenBand SPE ("OBS"), which M.C. Dean created for the
purpose of holding its interest in OBL, and a subsidiary of
LCD’s called LCD Communications.2 M.C. Dean also formed
OpenBand Multimedia, LLC ("OBM"), which is an FCC-
certified open video system operator that provides video and
internet services to Lansdowne and other Virginia communi-
ties. Lastly, M.C. Dean formed OpenBand of Virginia
("OBV"), which provides phone service to Virginia communi-
ties, including Lansdowne. OBL, OBS, OBM, OBV, and
M.C. Dean are all defendants and appellants in this case (col-
lectively, "OpenBand").3
2
Prior to this suit, LCD Communications transferred its interest in OBL
to OBS, leaving it the sole member of OBL.
3
The developer, LCD, and its subsidiary LCD Communications were
initially named as defendants but were dismissed voluntarily under Fed-
eral Rule of Civil Procedure 41(a)(1)(A)(i).
6 LANSDOWNE v. OPENBAND
With respect to the contractual arrangements, three are of
particular relevance. First, LCD granted a deed of easement
to OBL on May 14, 2001, entitled the "Exclusive Easement
for Telecommunications Services at Lansdowne on the Poto-
mac." LHOA is named as a party to the deed as the "Future
Owner" of the Property. LHOA ratified the easement acting
through its then-president (who was also president of LCD,
which controlled LHOA at the time).4 By its express terms,
the deed grants to OBL "exclusive easements for the purpose
of constructing, operating, maintaining, adding to, altering, or
replacing (collectively ‘Administering’ or ‘Administer’) [tele-
communications infrastructure] for the collection, provision,
and distribution of video, telephonic, internet, data services,
or other communications, data or media (collectively ‘Utili-
ties’)." The deed provides that "the exclusive easements" shall
be "deemed to reserve solely to [OBL] the rights to Adminis-
ter Utilities on, under and across the Property such that . . .
no other person or entity shall be entitled to Administer any
Utilities on, under or across the Property without the written
consent of [OBL]." The deed also prohibits LHOA from
"grant[ing] any easement to Administer any Utilities on,
under or across the Property" to any other party.
The second arrangement at issue is the Covenants, Condi-
tions, and Restrictions for Lansdowne on the Potomac (the
"CC&Rs"), dated June 18, 2001. The CC&Rs include a provi-
sion expressly recognizing OBL’s "exclusive easements for
access to and the installation, construction, [and] operation
. . . of a private utility and telecommunication system." The
CC&Rs refer to OBL’s exclusivity in several other places,
including a provision declaring that OBL’s "rights with
respect to the private utility system . . . and the services pro-
vided through such private utility system are exclusive, and
no other Person may provide such services to the Property."
4
The easement was actually granted to OBL through a two-step process
involving an initial grant of the easement by the developer LCD to its sub-
sidiary LCD Communications, followed by a second grant from LCD
Communications to OBL.
LANSDOWNE v. OPENBAND 7
Finally, OBL entered into a contract with the homeowners
association on July 24, 2001, entitled the "Agreement to
Obtain Telecommunication Services" ("TSA"). Under the
TSA, LHOA engaged OBL to provide "platform services," or
basic video, phone, and internet services that homeowners
receive, as well as optional "premium services." The TSA
grants OBL the right to "provide[ ] or arrange for the provi-
sion of the Platform Services to Homeowners so that [LHOA]
shall not engage any other provider of Platform services." The
TSA also incorporates the CC&Rs (which incorporate the
easement as described above) by prohibiting LHOA from
"amend[ing] the CC&Rs such that the amendment would . . .
have a materially adverse effect on OBL."
C.
In terms of its actual delivery of telecommunications ser-
vices, OBL purchases services from its affiliates—video and
internet from OBM and telephone from OBV—and resells
them to Lansdowne homeowners. OBL also separately sells
its services to LHOA itself for purposes of the Potomac Club,
a community center and office space that the homeowners
association maintains on the property. In accordance with the
terms of the easement, CC&Rs, and TSA described above, no
wire-based cable provider other than OBL has the infrastruc-
ture necessary to deliver services to the development. As one
M.C. Dean executive explained, "the entire agreement was set
up so that we could have our infrastructure in that fashion,"
that is, through a blanket easement over the Lansdowne com-
munity.
After OBL began providing cable to Lansdowne, residents
began complaining about the quality of its service. One home-
owner, Marvis Aleem, noted that OBL’s "picture quality was
frequently pixilated and the channel line-up, both in terms of
quantity and high-definition offerings—was inferior to those
of other video providers." Another homeowner, Tim McCoy,
complained of OBL’s "poor picture quality, channel line-up,
8 LANSDOWNE v. OPENBAND
equipment technology, and customer service." McCoy
described a number of specific problems with OBL’s video
service. For example, during the second half of the 2012
Super Bowl, portions of his screen pixilated, or froze, despite
the fact that McCoy had complained to OBL about pixilation
problems previously. McCoy also experienced synchroniza-
tion problems, where a particular channel would display the
correct video feed accompanied by a different channel’s audio
feed.
In response to these complaints, the homeowners associa-
tion began investigating alternative providers in 2010. One
member of LHOA’s board of directors had discussions with
Verizon, which demonstrated an interest in providing services
to the development. However, a Verizon employee subse-
quently emailed the LHOA board member expressing concern
that OBL’s "exclusive easements" would prevent it from
"build[ing] out on or otherwise access[ing] the property."
Another competing video service provider, Comcast, is con-
tractually required to make cable services available to Lans-
downe residents under the terms of its franchise agreement
with Loudoun County. The franchise agreement excuses this
requirement, however, in developments like Lansdowne that
"are subject to claimed exclusive arrangements with other
providers." It is undisputed that neither Verizon nor Comcast
has formally asked OBL to grant it a subeasement to build its
own infrastructure. However, as one M.C. Dean official testi-
fied, "would we object to [Verizon] coming into the commu-
nity and running their infrastructure? I would say that we
would."
D.
In August 2011, LHOA filed suit against OpenBand in the
Eastern District of Virginia, alleging a variety of claims under
federal and state law. OpenBand moved to dismiss, and the
district court agreed as to all of the federal counts but one: the
homeowners association’s claim that certain clauses in Open-
LANSDOWNE v. OPENBAND 9
Band’s contractual arrangements provide it with the exclusive
right to deliver video services in violation of the FCC’s 2007
Exclusivity Order.5 Following discovery, the parties filed
cross-motions for summary judgment on this claim. On June
27, 2012, the district court ruled in favor of the homeowners
association. The court thus issued an order permanently
enjoining OBL, OBM, OBS, and M.C. Dean from enforcing
any video service exclusivity provision against LHOA or
Lansdowne residents, and declaring all such provisions null
and void.
OpenBand then filed the instant appeal. We review the
grant of summary judgment de novo, asking whether, viewing
the facts in the light most favorable to OpenBand, there is no
genuine dispute as to any material fact and LHOA is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(a).
II.
Before reaching the merits of LHOA’s claim, we must first
address some threshold questions of justiciability. For "[i]f a
dispute is not a proper case or controversy, the courts have no
business deciding it, or expounding the law in the course of
doing so." DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341
(2006). OpenBand claims both that LHOA lacks standing to
bring this action and that the suit is not ripe for our review.
See id. at 352 (noting that standing and ripeness both "origi-
nate in Article III’s ‘case’ or ‘controversy’ language").
A.
The "irreducible constitutional minimum of standing" con-
sists of three requirements. Lujan v. Defenders of Wildlife,
504 U.S. 555, 560 (1992). First, the plaintiff must show that
it has suffered an "injury in fact" that is concrete and immi-
5
The district court declined to exercise supplemental jurisdiction over
the state law claims, dismissing them without prejudice.
10 LANSDOWNE v. OPENBAND
nent; second, the injury must be "fairly traceable" to the
defendant’s challenged conduct; and third, it must be likely
that the injury will be "redressed by a favorable decision." Id.
at 560-61 (internal quotation marks and alterations omitted).
OpenBand asserts that LHOA cannot satisfy any of these
requirements, but for the reasons that follow, we disagree.
1.
With respect to the element of injury, LHOA is a direct
consumer of OBL’s video services, which LHOA purchases
for the Potomac Club. Although OpenBand does not dispute
that a cognizable injury would exist if it were actually to pro-
hibit LHOA from contracting with a competing provider,
OpenBand contends that LHOA has suffered no injury here
because "[n]othing in the TSA or other agreements precludes
LHOA from" doing so. Appellants’ Br. 19.
This contention is impossible to square with the plain terms
of the challenged agreements. To start, OBL’s deed of ease-
ment unambiguously bars LHOA from engaging another pro-
vider of video services. In fact, the deed blockades other
providers from accessing the property to build the infrastruc-
ture necessary for delivering service in the first place. To that
end, OBL owns "exclusive easements for the purpose of con-
structing [or] operating" infrastructure for the "provision, and
distribution of video [services]." The deed states that these
"exclusive easements" shall be "deemed to reserve solely to
[OBL] the right[ ] to" construct infrastructure for such ser-
vices and that "no other person or entity shall be entitled to"
do so without OBL’s consent. And the deed expressly prohib-
its LHOA from "grant[ing] any easement" to any other party
for the purpose of building such infrastructure.
The CC&Rs likewise prevent LHOA from contracting with
a competing video provider. For example, the CC&Rs state
that OBL’s "rights with respect to the private utility system
. . . and the services provided through such [system] are
LANSDOWNE v. OPENBAND 11
exclusive, and no other Person may provide such services to
the Property." Moreover, the exclusivity clauses in the
CC&Rs are incorporated into the TSA, which prohibits
LHOA from "amend[ing] the CC&Rs such that the amend-
ment would . . . have a materially adverse effect on OBL."
OpenBand has also admitted that the whole purpose of its
agreements was to preclude LHOA from contracting with
competing cable providers—the very result that OpenBand
now seeks to disclaim. For example, OpenBand conceded in
the district court that OBL’s easement "effectively bar[s]
other providers of wired services from Lansdowne." Defs.’
Br. in Supp. of Mot. to Dismiss 22. M.C. Dean’s Executive
Vice President testified that "nobody else has infrastructure
within the community to deliver wireline service." When
asked why that was so, the executive candidly answered,
"[b]ecause the entire agreement was set up so that we could
have our infrastructure in that fashion."
Recognizing the futility of its contention that its various
arrangements do not bar the homeowners association from
engaging competing providers, OpenBand changes tack and
raises a second argument as well: that "the mere existence of
an exclusivity clause" gives rise to no injury at all unless the
clause is actually enforced. Appellants’ Reply Br. 5-6. That
would be surprising news to the FCC, which enacted the
Exclusivity Order based on its express finding that "exclusiv-
ity clauses cause significant harm," in particular that they
deny consumers the benefits of "lower prices," "more chan-
nels," and improved "quality of service." Exclusivity Order
¶ 26, 17 & n.50. Significantly, the FCC found that these inju-
ries occur not only where exclusivity clauses are actually
enforced, but rather by virtue of their very existence because
such clauses "deter new entrants" from even "attempting to
enter the market." Id. ¶ 19 (emphasis added). As the FCC
explained, "[a] rule that left exclusivity clauses in effect
would allow the vast majority of the harms caused by such
clauses to continue for years." Id. ¶ 35. It is for this reason
12 LANSDOWNE v. OPENBAND
that the order declares "any" exclusivity clause "null and
void" without regard for whether it has been enforced. Id.
¶ 31.
Because OpenBand’s exclusivity clauses preclude LHOA
from engaging an alternate provider of video services for its
club house, producing the precise injuries that the FCC identi-
fied in enacting its Exclusivity Order, we hold that LHOA has
suffered a cognizable injury for purposes of Article III stand-
ing.
2.
The second element of standing requires a plaintiff to dem-
onstrate that its injuries are fairly traceable to the challenged
conduct of the defendants. Lujan, 504 U.S. at 560. OpenBand
argues that any injury suffered by LHOA is not caused by it,
but rather by the independent, intervening actions of third par-
ties not before the court—to wit, the decisions by competing
companies not to offer video service to Lansdowne.
This argument ignores the reason why competing cable
providers have not offered services to LHOA: the existence of
OpenBand’s exclusivity clauses. OpenBand’s mistake, in
other words, is to "equate[ ] injury ‘fairly traceable’ to the
defendant with injury as to which the defendant’s actions are
the very last step in the chain of causation." Bennett v. Spear,
520 U.S. 154, 168-69 (1997). But as the Supreme Court has
explained, the causation element of standing is satisfied not
just where the defendant’s conduct is the last link in the
causal chain leading to an injury, but also where the plaintiff
suffers an injury that is "produced by [the] determinative or
coercive effect" of the defendant’s conduct "upon the action
of someone else." Id. at 169.
That is what has occurred here. The record is replete with
evidence that OBL’s exclusivity arrangement caused compet-
ing cable providers not to offer LHOA their services. For
LANSDOWNE v. OPENBAND 13
starters, an LHOA board member testified that during her dis-
cussions with Verizon, the company indicated that it "wanted
to come down into Lansdowne and lay cable and service the
Lansdowne residents." To that end, Verizon sent the home-
owners association a letter identifying the services it could
offer along with pricing options. Yet after Verizon analyzed
OBL’s exclusive easement, the CC&Rs, and the TSA, the
company concluded that it could not provide service to Lans-
downe because "nothing [Verizon has] seen would give us a
green light to build out on or otherwise access the property."
Similarly, LHOA produced the franchise agreement
between Loudoun County and Comcast. Under that agree-
ment, Comcast is required to make service available to "all
residential dwelling units" in the county, with the exception
that it "shall not be required to serve potential Subscribers in
developments" like Lansdowne that "are subject to claimed
exclusive arrangements with other providers." Thus, as with
Verizon, Comcast’s decision not to offer video to Lansdowne
is fairly traceable to OpenBand’s challenged exclusivity
arrangements. And although it took place before the FCC
issued the Exclusivity Order, we also note that when Adelphia
sought to provide service to Lansdowne in 2001, OBL denied
its request, citing its exclusive easement. See UCA, LLC v.
Lansdowne Cmty. Dev., LLC, 215 F. Supp. 2d 742, 747 (E.D.
Va. 2002). We therefore hold that LHOA has established the
second element of the Article III standing inquiry.
3.
Turning to the third standing requirement of redressability,
our task is to determine if it is "‘likely,’ as opposed to merely
‘speculative,’ that the injury will be ‘redressed by a favorable
decision.’" Lujan, 504 U.S. at 561 (quoting Simon v. E. Ky.
Welfare Rights Org., 426 U.S. 26, 38, 43 (1976)). OpenBand
contends that it is "entirely speculative" whether an order nul-
lifying OBL’s exclusivity clauses will redress LHOA’s inju-
ries because the courts cannot "order any alternative provider
14 LANSDOWNE v. OPENBAND
to provide service or even negotiate with LHOA." Appellants’
Br. 21, 20.
We do not agree. The record reveals that an order declaring
OBL’s exclusivity clauses null and void and enjoining OBL
from enforcing them would indeed be likely to redress the
lack of competition and accompanying quality, price, and
menu of channel harms that LHOA currently suffers. As dis-
cussed above, Comcast’s franchise agreement with Loudoun
County requires it to "make Cable Service available to all res-
idential dwelling units" in the county. Comcast has not ful-
filled this obligation because its franchise agreement excuses
the requirement in cases where a development is "subject to
claimed exclusive arrangements with other providers." Thus,
once OBL’s exclusivity arrangement is eliminated, so too will
be Comcast’s reason for declining to provide service to Lans-
downe. A favorable court ruling here is therefore not only
"likely" to redress LHOA’s injuries, but will necessarily do
so. Having successfully established injury-in-fact, causation,
and redressability, LHOA has standing in this case.6
B.
We turn next to a second Article III threshold question:
whether this dispute is ripe for adjudication. "The doctrine of
ripeness prevents judicial consideration of issues until a con-
troversy is presented in clean-cut and concrete form." Miller
v. Brown, 462 F.3d 312, 318-19 (4th Cir. 2006) (internal quo-
6
LHOA also has associational standing to sue on behalf of its members
because it introduced at the summary judgment stage two affidavits from
individual members demonstrating that they suffered injuries in their own
right. That fact differentiates this case from our decision in Southern Walk
at Broadlands Homeowner’s Ass’n v. OpenBand at Broadlands, LLC, No.
12-1331, at *11-13 (4th Cir. Apr. 5, 2013), where we found associational
standing lacking at the motion to dismiss stage because the complaint did
not allege any such individual injuries, much less include affidavits to that
effect. LHOA thus enjoys standing both directly and on behalf of its mem-
bers.
LANSDOWNE v. OPENBAND 15
tation marks omitted). To determine if a case is ripe, we "bal-
ance the fitness of the issues for judicial decision with the
hardship to the parties of withholding court consideration." Id.
at 319 (internal quotation marks omitted).
With respect to the fitness criterion, it is settled that a case
is "fit for judicial decision when the issues are purely legal
and when the action in controversy is final and not dependent
on future uncertainties." Id. OpenBand protests that this case
is not fit for resolution because "there is no proof that OBL
denied access to its easement or refused to grant a subease-
ment to anyone." Appellants’ Br. 16. OpenBand asks this
court to wait to decide this case because OpenBand might yet
decide in the future to relinquish its claim to the exclusive
right to provide video services at Lansdowne.
This argument fails for two reasons. To begin, OpenBand’s
position is unsupported by the record. The homeowners asso-
ciation has produced evidence that OpenBand has no intention
of voluntarily abandoning its exclusivity. As already men-
tioned, an M.C. Dean executive stated on the record twice that
OBL would, if asked, deny Verizon access to its easement.
Another executive testified that the entire purpose of OBL’s
contractual arrangements was so that "nobody else [would
have] infrastructure within the community to deliver wireline
service." Eliminating the exclusive easement, the executive
stated, would place "our entire business model . . . at risk."
In the face of these undisputed statements, we find Open-
Band’s claim of factual uncertainty completely untenable.
OpenBand’s argument amounts to little more than a formalis-
tic contrivance. The case is not ripe, it complains, because it
may at some point in the future gratuitously renounce its
claim of exclusive access to the development. Yet OpenBand
has fought this entire litigation to preserve that very exclusiv-
ity, stating repeatedly on the record that it has no intention of
giving it up.
16 LANSDOWNE v. OPENBAND
Moreover, even if there were some reason to think that
OBL might abandon its exclusivity and allow competitors to
access Lansdowne, that future prospect "would not assist our
resolution of the" actual issue before this court. Babbitt v.
United Farm Workers Nat’l Union, 442 U.S. 289, 301 (1979).
As noted earlier, the question here is whether OBL’s exclusiv-
ity clauses, as written, violate the Exclusivity Order. Whether
OBL enforces those clauses in the future is of no consequence
because the order declares "any provision in a contract that
grants [a cable operator] the exclusive right to provide any"
video service "null and void." Exclusivity Order ¶ 31. Thus,
whether OBL’s clauses unlawfully grant it the exclusive right
to provide video service is a legal question that is, in a sense,
frozen in time: the answer does not change no matter how
actively or passively OBL chooses to exercise that right.
Turning to the hardship prong of the ripeness inquiry, we
find this to be a straightforward case. "The hardship prong is
measured by the immediacy of the threat and the burden
imposed on the [plaintiff]." Charter Fed. Sav. Bank v. Office
of Thrift Supervision, 976 F.2d 203, 208-09 (4th Cir. 1992).
Here, the hardship could not be any more immediate: because
of OBL’s exclusivity, LHOA and its residents are presently
unable to avail themselves of the quality, price, and menu of
channel advantages of a competing provider. See Miller, 462
F.3d at 321 (finding hardship prong satisfied where chal-
lenged action of the defendants had already caused "immedi-
ate harm" to plaintiffs).
So too is the burden imposed substantial. Each day that
passes without judicial resolution is another day that LHOA
and its homeowners go without the opportunity to obtain ser-
vice from a competitor, despite the fact that the Exclusivity
Order declares that any exclusivity clause "shall be null and
void." While cable service may not be a matter of life and
death, it is an important aspect of life for many Americans.
Consider the plight of Lansdowne homeowner Tim McCoy,
who, unable to contract with a competing provider and having
LANSDOWNE v. OPENBAND 17
already paid OBL for his service, watched the second half of
the 2012 Super Bowl in a state of apprehension that the video
feed would freeze at any moment, as had happened before.
Such homeowner concerns, especially in the absence of any
need to await further factual developments, render this case
ripe for our review.
III.
Satisfied that Article III poses no obstacle to suit, we next
consider OpenBand’s argument that LHOA’s claim falls out-
side the scope of the private right of action conferred by 47
U.S.C. § 401(b). That provision states: "[i]f any person fails
or neglects to obey any order of the Commission . . . any party
injured thereby . . . may apply to the appropriate district court
of the United States for the enforcement of such order." 47
U.S.C. § 401(b) (emphasis added).
The district court held that LHOA may sue under this pro-
vision, reasoning that the Exclusivity Order qualifies as an
"order of the Commission" because it "specifically defines the
rights and obligations that a litigant can enforce." OpenBand
argues that this was error for two reasons. First, it contends
that § 401(b) permits enforcement of only adjudicatory
orders, not rulemaking orders. In the alternative, OpenBand
asserts that even if § 401(b) permits enforcement of some
rulemaking orders—viz., those that define the rights and obli-
gations of litigants—the Exclusivity Order is not such an
order. Again, however, we find OpenBand’s arguments
unpersuasive.
A.
We begin with the question of whether § 401(b) ever per-
mits parties to sue for enforcement of FCC rulemaking, as
opposed to adjudicatory orders. OpenBand suggests that the
answer is "no" because while the plain terms of § 401(b)
authorize enforcement of "any order of the Commission," the
18 LANSDOWNE v. OPENBAND
Administrative Procedure Act defines the term "order" to
mean "the whole or a part of a final disposition . . . of any
agency in a matter other than rule making," 5 U.S.C. § 551(6)
(emphasis added).
We are not persuaded. To begin, the APA’s definition of an
"order" does not control in this context because § 401(b) pre-
dates the APA by nearly twelve years, and the APA’s defini-
tions are only mandatory in the context of the APA itself. See
5 U.S.C. § 551 (definitions apply "[f]or the purpose of this
subchapter"). Moreover, as the Ninth Circuit explained in
Hawaiian Telephone, 827 F.2d at 1271, when Congress
wanted to incorporate APA definitions into the Communica-
tions Act, it did so expressly—for example, explicitly defin-
ing the term "adjudication" by reference to the APA three
times in 47 U.S.C. § 409(a)-(c). That Congress did not do so
with regard to the term "order" in § 401(b) shows that it did
not intend for the APA’s limited definition of that term to
apply here.
Interpreting the phrase "any order of the Commission" in
§ 401(b) to encompass rulemaking orders also respects the
venerable principle of statutory construction that "identical
words and phrases within the same statute should normally be
given the same meaning." Powerex Corp. v. Reliant Energy
Servs., Inc., 551 U.S. 224, 232 (2007). In CBS, Inc. v. United
States, the Supreme Court construed the exact phrase at issue
here, "any order of the Commission," to include some FCC
rulemaking orders in the context of 47 U.S.C. § 402(a), which
provides a right of action for setting aside an FCC order. 316
U.S. 407, 416-19 (1942). OpenBand has offered no persuasive
explanation for why this interpretation of "any order of the
Commission" should not also apply in the context of § 401(b),
the immediately prior provision. We thus hold that § 401(b)’s
right of action to enforce "any order of the Commission" can
encompass both FCC adjudicatory and rulemaking orders. In
so holding, we align ourselves with a majority of circuits to
consider the question. See, e.g., Alltel Tenn., Inc. v. Tenn.
LANSDOWNE v. OPENBAND 19
Pub. Serv. Comm’n, 913 F.2d 305, 308 (6th Cir. 1990);
Hawaiian Tel. Co. v. Pub. Utils. Comm’n, 827 F.2d 1264,
1270-72 (9th Cir. 1987). But see New England Tel. & Tel. Co.
v. Public Utils. Comm’n, 742 F.2d 1, 4-7 (1st Cir. 1984).
B.
Our holding that § 401(b) can extend to rulemaking orders
does not, however, end the analysis. As we explained in
CGM, LLC v. Bellsouth Telecommunications, Inc., not all
rulemaking orders are created equal for purposes of
§ 401(b)’s private right of action; only those that "require[ ]
a defendant to take concrete actions" may be enforced. 664
F.3d 46, 53 (4th Cir. 2011) (internal quotation marks omit-
ted). The reason for this rule is self-evident: if a rulemaking
order merely announces agency findings or broad policy con-
siderations without actually imposing specific obligations on
identifiable entities, a § 401(b) action to enforce that order
would present a court with nothing but generic abstractions to
enforce.
Thus, for example, in CGM, we rejected a plaintiff’s
attempt to enforce under § 401(b) a rulemaking order that laid
out "policy considerations [and] public feedback." Id. at 54.
In fact, the order at issue in CGM made clear that parties were
free to voluntarily contract around the relevant FCC rules and
that state regulatory commissions (not the FCC) had the final
authority to create binding obligations on the parties. Id. In
light of these facts, we had no choice but to conclude that the
plaintiff in CGM had "no rights" and the defendant "no
duties" under the FCC order involved in that case. Id. at 55.
OpenBand contends that the same result should obtain here
because the Exclusivity Order "impose[s] no obligation on
any named party, confer[s] no rights to any named party, and,
in fact, name[s] no parties or entities at all." Appellants’ Br.
25. This argument misses the mark. For one, OpenBand badly
misconstrues the controlling legal principle by focusing on
20 LANSDOWNE v. OPENBAND
whether the order expressly names the precise parties
involved in this litigation. No court has taken such a crabbed
view of the rulemaking orders subject to § 401(b). And for
good reason. The crucial distinction between adjudication and
rulemaking is that "adjudications resolve disputes among spe-
cific individuals in specific cases, whereas rulemaking affects
the rights of broad classes of unspecified individuals." Yesler
Terrace Cmty. Council v. Cisneros, 37 F.3d 442, 448 (9th Cir.
1994). To require a rulemaking order to expressly (and pre-
sciently) name the parties in advance would fatally undercut
the FCC’s power to regulate via general and prospective rules,
47 U.S.C. § 154(i).
Consequently, as we explained in CGM, the ultimate test is
simply whether the FCC order in question sets forth "specific
rights and obligations of the[ ] litigants." 664 F.3d at 54. The
Exclusivity Order satisfies this test. The order identifies the
precise actions that OpenBand is prohibited from taking: no
"operator of an open video system" may "enforce or execute
any provision in a contract" granting it the "exclusive right to
provide any video programming service." Exclusivity Order
¶ 51, 31. It defines OpenBand’s rights in such exclusivity
clauses accordingly: "[a]ny such exclusivity clause shall be
null and void." Id. ¶ 31. The order likewise identifies the
rights of LHOA and homeowners as part of a "centrally man-
aged residential real estate development[ ]" that shall not be
the subject of any exclusivity clause. Id. ¶ 7, 31. We therefore
hold that the Exclusivity Order is sufficiently specific in
defining the "rights and obligations of these litigants" to be
enforceable under § 401(b). CGM, 664 F.3d at 54.7
7
We also find OpenBand’s statute of limitations argument to be without
merit, as "[s]tatutes of limitations are not controlling measures of equitable
relief." Holmberg v. Armbrecht, 327 U.S. 392, 396 (1946). In this case,
equitable relief is all that the homeowners association has sought.
LANSDOWNE v. OPENBAND 21
IV.
We arrive at last at the question of whether the challenged
clauses in the easement, CC&Rs, and TSA actually run afoul
of the FCC’s order. Resolving this question involves two-
steps. First, we must decide whether OBL is an "open video
system operator" such that its agreements are subject to the
order to begin with. Exclusivity Order ¶ 51. If it is, we must
then ask whether the challenged clauses are "provision[s] in
a contract" granting OBL an "exclusive right to provide"
video service in violation of the order. Id. ¶ 31.
OpenBand asserts that the answer to both of these questions
is "no," but its arguments as to why ring hollow. OBL seeks
first to evade the FCC’s definition of an "open video system
operator" by structuring its business operations among several
related, interlocking entities in a kind of elaborate corporate
shell game. OBL likewise seeks to avoid the Exclusivity
Order’s flat prohibition on exclusivity clauses in any contract
by splitting up its exclusive arrangement into an assortment of
interconnected sub-agreements and placing its critical exclu-
sivity provisions in a deed of easement that it contends is not
a "contract" reached by the FCC’s proscription. For the rea-
sons that follow, we reject both of these efforts to circumvent
the plain terms of the Exclusivity Order.
A.
We start with the question of whether OBL is an operator
of an "open video system," or "OVS," within the meaning of
the FCC’s order. The answer matters because the order ren-
ders null and void exclusivity clauses that are entered into by
"entities that are subject to [47 U.S.C. § 548]," among which
OVS operators are included. Exclusivity Order ¶ 30, 51; 47
U.S.C. § 573(c)(1)(A) (stating that OVS operators are subject
to § 548). Our inquiry is limited to whether OBL satisfies the
definition of an OVS operator because OBL is the only
defendant-appellant that is party to the agreements at issue.
22 LANSDOWNE v. OPENBAND
To decide whether OBL is an OVS operator, we begin with
the applicable regulatory definition. The FCC has defined an
"[o]pen video system operator" to include:
Any person [defined by 47 U.S.C. § 522(15) to
include corporations] or group of persons who pro-
vides cable service over an open video system and
directly or through one or more affiliates owns a sig-
nificant interest in such open video system, or other-
wise controls or is responsible for the management
and operation of such an open video system.
47 C.F.R. § 76.1500(b). Openband does not dispute that OBL
satisfies most of this definition. Its sole contention is that
OBL cannot be said to "provide[ ] cable service" either as a
"person" in its own right or as part of a "group of persons."
47 C.F.R. § 76.1500(b). The district court ruled against OBL
in both respects, and we agree for the reasons below.
1.
OpenBand argues first that OBL is not itself a "person"
who "provides cable service" because the cable service in
question is actually that of its affiliate, OpenBand Multime-
dia, or "OBM", who OpenBand concedes is an FCC-certified
OVS operator. OpenBand therefore contends that it is only
OBM who "provides" cable service to LHOA and the home-
owners; OBL merely "arranged for the provision of" that ser-
vice by purchasing it from OBM and reselling it to Lans-
downe. Appellants’ Br. 8.
We cannot accept OpenBand’s argument. To start, because
neither Congress nor the FCC have defined the term "pro-
vide," we give the term its ordinary meaning. See Schindler
Elevator Corp. v. United States ex rel. Kirk, 131 S. Ct. 1885,
1891 (2011). The ordinary meaning of "provide" is "to make
available" or to "furnish." Random House Dictionary of the
English Language 1556 (2d ed. 1987). OBL satisfies this defi-
LANSDOWNE v. OPENBAND 23
nition because it is undisputed that OBM sells video service
to OBL, which then uses its own connection lines, cables, and
other infrastructure to transmit that video into Lansdowne,
thereby "making available" or "furnishing" it to homeowners.
OpenBand’s argument to the contrary is premised on the
misguided view that the entity that is the initial link in a chain
of delivery is the only one that can be said to "provide" the
thing delivered. But that is not what "provide" means: if
Angela tells Bob how to drive to the park, and Bob relays
those instructions to Carmen, all would agree that Bob, no
less than Angela (and perhaps more) has "provided" instruc-
tions to Carmen. Furthermore, OpenBand’s argument refutes
itself, since OBM (who OpenBand admits provides cable ser-
vice) is not actually the initial link in the delivery chain—
OBM instead contracts with video content providers who
deliver programming that OBM in turn transmits to OBL. We
therefore hold that OBL qualifies as an OVS operator under
47 C.F.R. § 76.1500(b) because it is itself an entity that "pro-
vides" cable service.
2.
Alternatively, even if OBL is not itself a person that "pro-
vides" cable service, it is undoubtedly part of a "group of per-
sons" that does. 47 C.F.R. § 76.1500(b). In defining an OVS
operator to include not just individual entities, but also groups
of entities that provide cable service, the FCC’s definition
appears to envision precisely this type of scenario, where a
corporate parent like M.C. Dean divides up the functions of
an OVS operator across its subsidiaries such as OBM and
OBL. Thus, as already described, OBM is able to deliver
video to OBL’s end customers in Lansdowne only by using
OBL’s physical infrastructure. OBM also has no direct con-
tact with those customers; it is instead OBL who has con-
tracted with customers to resell OBM’s services. OBL and
OBM thus operate together, functionally and contractually, in
an integrated manner as a "group of persons who provides
24 LANSDOWNE v. OPENBAND
cable service over an open video system," 47 C.F.R.
§ 76.1500(b).
OpenBand responds that treating OBL and OBM together
as an OVS operator under the "group of persons" prong of the
FCC’s definition proves too much because under such an
approach, "LHOA and its members also are OVS operators."
Appellants’ Reply Br. 19. OpenBand is mistaken. For one
thing, LHOA and its homeowners are not a part of the same
"group of persons" as OBM and OBL because unlike OBM
and OBL, LHOA and the homeowners are not affiliated sub-
sidiaries of M.C. Dean. For another, there is no evidence that
LHOA or its homeowners satisfy the definitional requirement
of "own[ing] a significant interest" in the OVS. 47 C.F.R.
§ 76.1500(b). Nor is there any evidence that LHOA or the
homeowners somehow "control[ ]" or are "responsible for the
management and operation" of the OVS. Id. Put simply, there
is no reason to read the FCC’s "group of persons" definition
of an OVS operator so broadly as to sweep up individual
homeowners; the definition is instead designed to fit exactly
the kind of division of labor that exists here between corpo-
rate affiliates like OBL and OBM.
3.
OpenBand tosses up one final contention as to why OBL
should not be bound by the Exclusivity Order: that the regula-
tory definition of an OVS operator in 47 C.F.R. § 76.1500(b)
does not matter anyway. This is so, OpenBand suggests,
because 47 U.S.C. § 573(a)(1) directs OVS operators to
obtain certification from the FCC. Thus, in OpenBand’s view,
"only an entity that has received [such] certification can be an
open video system operator." Appellants’ Br. 34 n.14.
Yet again, OpenBand is mistaken. Its error this time is to
ignore the obvious difference between a definition and a duty.
The statutory obligation that an entity should certify with the
FCC as an OVS operator is plainly the latter: 47 U.S.C.
LANSDOWNE v. OPENBAND 25
§ 573(a)(1) does not purport to define what an OVS operator
is, but rather identifies something that an OVS operator
should do. Thus, § 573(a)(1) states that "[a]n operator of an
open video system shall qualify for reduced regulatory bur-
dens . . . if the operator of such system certifies to the Com-
mission that [it] complies with the Commission’s
regulations."
Moreover, to read § 573(a)(1)’s certification requirement as
somehow delimiting the kinds of entities that constitute an
OVS operator would lead to absurd results. It would permit,
for example, an entity to avoid all regulations applicable to
OVS operators simply by refusing to certify with the FCC. In
addition to defying logic, such a result cannot be squared with
the text of the very statute that OpenBand relies on, which
entitles an "operator of an open video system" to "qualify for
reduced regulatory burdens" if it certifies with the FCC, not
more. 47 U.S.C. § 573(a)(1) (emphasis added).
In sum, we reject OpenBand’s attempt to circumvent the
FCC’s definition of an OVS operator. OpenBand’s arguments
hinge, at bottom, on the belief that it can evade unambiguous
federal regulations by playing a shell game in which it divides
up corporate functions so that one entity obtains certification
from the FCC as an OVS operator, while a separate entity
enters into otherwise-unlawful exclusivity agreements. We
reject the notion that the Exclusivity Order may be defeated
through such a meaningless expedient. To allow that outcome
would create a blueprint for regulatory circumvention, effec-
tively enabling every OVS operator to engage in exactly the
kind of exclusive access arrangement that the FCC found to
deter competition and cause consumers considerable harm.
We decline OpenBand’s invitation to be a party to that result.
B.
Having decided that OBL is an OVS operator bound by the
FCC order, we consider finally whether OBL’s arrangements
26 LANSDOWNE v. OPENBAND
contravene that order. We start with the language of the order,
which states that no OVS operator "shall enforce or execute
any provision in a contract that grants it the exclusive right to
provide any video programming service (alone or in combina-
tion with other services) to a MDU. Any such exclusivity
clause shall be null and void." Exclusivity Order ¶ 31. Open-
Band has conceded, at various points, that most of this defini-
tion is satisfied. OpenBand does not dispute, for instance, that
Lansdowne is an MDU protected by the order. OpenBand also
admitted before the district court that its easement (though not
the TSA) "effectively bar[s] other providers of wired services
from Lansdowne." Defs.’ Br. in Supp. of Mot. to Dismiss 22.
Notwithstanding these concessions, OpenBand claims that
it has not violated the Exclusivity Order. Its argument
involves two steps. First, OpenBand asserts that each of the
challenged arrangements—the TSA, CC&Rs, and easement—
should be segregated and considered separately from one
another before determining whether any of them actually vio-
lates the order. Second, OpenBand contends that none of the
individual agreements actually does so. As we explain further
below, OpenBand is incorrect at both steps of its reasoning.
1.
We shall first consider whether the TSA, CC&Rs, and
easement should be considered separately for the purpose of
determining whether the agreements include exclusivity
clauses that run afoul of the order. OpenBand argues that we
must consider these arrangements in isolation. This is because
the order applies to exclusivity provisions contained in a
"contract," and, by evaluating each agreement separately,
OpenBand hopes to cordon off the exclusivity clauses in the
easement (which it claims is not a contract), and focus the
court’s attention instead on the TSA (which it concedes is a
contract, only one that it says contains no exclusivity clause).
OpenBand’s divide-and-conquer approach must be exposed
for what it really is: a sleight of hand designed to preserve
LANSDOWNE v. OPENBAND 27
precisely the type of anti-competitive video monopoly that the
FCC sought to prohibit. We decline to permit this machina-
tion for a straightforward reason: under Virginia law, "con-
temporaneous written agreements executed as part of the
same transaction will be construed together as forming one
contract." Va. Hous. Dev. Auth. v. Fox Run Ltd., 497 S.E.2d
747, 752 (Va. 1998) (internal quotation mark omitted); see
James v. Circuit City Stores, Inc., 370 F.3d 417, 421-22 (4th
Cir. 2004) ("[I]nterpretation of private contracts is a question
of state law."). The TSA, CC&Rs, and easement easily satisfy
this standard because they were each entered into within a
short window of time in 2001, and each concerns the same
basic transaction: OBL’s agreement to provide telecommuni-
cations services to Lansdowne.
That the documents were designed to function together as
a single agreement is further confirmed by the fact that the
terms of each document "clearly contemplate the application
of terms in the other[s]," such that the terms "may be viewed
together as representing the complete agreement of the par-
ties." Va. Hous. Dev. Auth., 497 S.E.2d at 752-53. Indeed, the
very thing that ties the agreements together is OpenBand’s
unabashed desire to secure exclusive access to the develop-
ment. For example, the CC&Rs incorporate the terms of the
easement, confirming that OBL enjoys "exclusive easements
for access to and the installation [and] operation" of telecom-
munications systems. As discussed, the easement promises
OBL the sole right to build and operate video infrastructure
in Lansdowne such that "no other person or entity shall be
entitled to" do the same. And tying together the entire
arrangement, the TSA explicitly incorporates the terms of the
CC&Rs by forbidding LHOA to "amend the CC&Rs such that
the amendment would . . . have a materially adverse effect on
OBL." Significantly, it is undisputed that if LHOA were to
amend its CC&Rs to permit it to grant an easement to another
video provider, that would have a "materially adverse effect"
on OBL and therefore breach the TSA.
28 LANSDOWNE v. OPENBAND
Thus, considering the TSA, CC&Rs, and easement together
as the single, intertwining contract that it actually is, we have
no difficulty concluding that it contains provisions granting
OBL the "exclusive right to provide" video service to Lans-
downe, in violation of the order. Exclusivity Order ¶ 31. As
noted earlier, the purpose and effect of the agreement is to bar
competing cable video providers from delivering service to
the development by preventing them from ever building the
infrastructure necessary to reach Lansdowne in the first place.
See ante at 10-11. Thus, the provisions are among the type
that the FCC identified as the "most exclusionary exclusivity
clauses," as they "prohibit any other [provider] from any
access whatsoever to the premises." Id. ¶ 1 n.2. All of the
clauses effectuating this exclusive video arrangement are
therefore "null and void." Id. ¶ 31.
2.
Even if we were to agree with OpenBand that the easement,
CC&Rs, and TSA should be evaluated separately under the
Exclusivity Order, we would nevertheless conclude that each
agreement is independently a contract containing exclusivity
provisions prohibited under the order.
With regard to the easement at the crux of this dispute,
OpenBand raises a variety of arguments for why it does not
violate the Exclusivity Order when considered in isolation.
First, OpenBand argues that the order does not apply to exclu-
sivity clauses in easements because easements are not con-
tracts. As an initial matter, this argument is forfeited because
OpenBand failed to argue it in the district court. Muth v.
United States, 1 F.3d 246, 250 (4th Cir. 1993). In fact, Open-
Band actually conceded the opposite before the district court,
admitting that it is "undisputed" that "easements are con-
tracts." Defs.’ Reply in Supp. of Mot. to Dismiss 18; see also
Tr. of Summ. J. Hr’g 26 (admitting that OpenBand "ha[s] a
contractual provision in the form of a real property agreement
that provides an exclusive right of enjoyment of the prop-
LANSDOWNE v. OPENBAND 29
erty"). Moreover, even if we were to consider the argument
on appeal, we would find OpenBand’s initial concession cor-
rect: a deed of easement is a contract. See Cantrell v. Appala-
chian Power Co., 139 S.E. 247, 248-49 (Va. 1927)
(describing document granting an easement as a "contract");
see also, e.g., United States v. Sea Gate, Inc., 397 F. Supp.
1351, 1360 (E.D.N.C. 1975) ("[A] deed creating an easement
by express reservation is a contract.").
Undeterred, OpenBand next argues that the Exclusivity
Order is not meant to interfere with easements because the
order is "explicit in limiting its reach to exclusivity clauses in
contracts for video services, not real property rights." Appel-
lants’ Br. 31. Specifically, OpenBand points to Paragraph 37
of the Exclusivity Order, which states that "the rule we adopt
today does not require that any new entrant be given access
to any MDU. A MDU owner still retains the rights it has
under relevant state law to deny [access to] a particular pro-
vider." But this paragraph quite obviously does not assist
OpenBand’s position because it protects the right of property
owners to deny a cable provider access to their property, not
the right of a cable provider to exclude its competitors. Nor
is OpenBand aided by its reliance on Paragraphs 55 and 57 of
the order, which state that the order "does not involve the per-
manent condemnation of physical property" and that video
providers need not "jettison" use of their existing wires. Those
provisions simply make clear that video providers are not
required to give up or affirmatively share their existing infra-
structure; the provisions in no way permit providers to com-
pletely exclude their competitors from accessing a property.
OpenBand’s contention that the FCC’s order does not
extend to easements is also considerably undermined by the
fact that the order specifically references two easements,
attached to comments filed by AT&T, as "examples of exclu-
sion." Exclusivity Order ¶ 10 & n.27. It would have been odd
—to say the least—for the FCC to refer to two exclusive ease-
30 LANSDOWNE v. OPENBAND
ments as illustrations of exclusivity clauses if, as OpenBand
asserts, the FCC in fact intended not to reach such easements.
Nor can OpenBand defend the illogical result that would
arise were we to accept its position that easements are exempt
from the order. If OpenBand is correct, any cable provider
would be able to frustrate the FCC’s unequivocal prohibition
on exclusivity clauses simply by structuring its exclusive
arrangement in the form of an easement. An exception of such
huge proportions would render the FCC’s order nugatory, the
dangers of which this very case makes clear.
OpenBand makes one last argument for why the easement
does not violate the FCC’s order. Retreating from its prior
admission that the easement bars access by other cable pro-
viders, OpenBand argues now on appeal that the easement
does not "absolutely" bar access to Lansdowne after all
because "OBL has the right to grant subeasements." Appel-
lants’ Br. 30. To begin, this argument is also forfeited because
OpenBand never raised it in the district court. Muth, 1 F.3d
at 250. Moreover, even if not forfeited, the argument is belied
by the record, for OpenBand has never represented that it
would grant a subeasement to a competitor of its own good
will. In point of fact, as already mentioned, an M.C. Dean
executive testified in a deposition that, "would we object to
[Verizon] coming into the community and running their infra-
structure? I would say that we would."
Finally, even if the argument were not forfeited, and even
if it were supported by the record, we would reject it in any
event. The mere fact that OBL may voluntarily relinquish its
exclusivity by granting a subeasement cannot mean that the
easement is untouched by the FCC order. If that were so, the
FCC order would never render any exclusivity clause null and
void, since a party could always theoretically give up its claim
of exclusivity. But that is not how the FCC order is written:
the order instead prohibits "any provision in a contract that
grants it the exclusive right to provide" video services to an
LANSDOWNE v. OPENBAND 31
MDU. Exclusivity Order ¶ 31 (emphasis added). The ease-
ment grants OBL exactly that right, regardless of its future
intentions. All provisions in the easement granting OBL the
exclusive right to provide video services are therefore null
and void, as are any such clauses in the TSA and CC&Rs.8
V.
In seeking to defend its exclusive access arrangement,
OpenBand has engaged in what amounts to an elaborate game
of regulatory subterfuge featuring an array of procedural
defenses, the use of various corporate entities to escape the
definition of an OVS operator, and an artifice to evade the
FCC order by structuring its exclusive arrangement using a
web of sub-agreements. The district court correctly pierced
these arguments to recognize that OpenBand had set up just
the kind of non-competitive video service monopoly—with
all the attendant dangers of high prices and poor service—that
the FCC banned in the Exclusivity Order. We accordingly
affirm the grant of summary judgment in LHOA’s favor.
Furthermore, lest there be any doubt, we underscore that in
declaring null and void and enjoining enforcement of all
exclusivity clauses in the challenged agreements as those
clauses relate to the provision of wire-based cable services,
the district court’s order renders the clauses unenforceable
against the homeowners association and individual homeown-
ers alike. To endorse a contrary result would be to foster the
very anti-competitive injuries in terms of price, quality, and
8
Thus, for example, the TSA expressly provides that LHOA "shall not
engage any other provider of Platform services." In addition, as explained
above, the TSA contains a clause that guarantees OBL exclusive access to
Lansdowne by preventing LHOA from amending its CC&Rs to permit
other cable providers from building infrastructure in the development. The
CC&Rs similarly provide that OBL’s "rights with respect to the private
utility system . . . and the services provided through such private utility
system are exclusive, and no other Person may provide such services to
the Property."
32 LANSDOWNE v. OPENBAND
choice of service that prompted the FCC to enact the Exclu-
sivity Order in the first place.
For the foregoing reasons, the judgment of the district court
is affirmed.
AFFIRMED