The FCC has announced it’s investigating deals the broadband industry strikes with landlords that block broadband competition in apartment complexes, condos, and developments. While the FCC passed rules in 2008 attempting to prevent such deals, Internet Service Providers (ISPs) have exploited massive loopholes in the restrictions for more than a decade.
“With more than one-third of the U.S. population living in condos and apartment buildings, it’s time to take a fresh look at how exclusive agreements between carriers and building owners could lock out broadband competition and consumer choice,” interim FCC boss Jessica Rosenworcel said of the announcement. “I look forward to reviewing the record.”
The inquiry comes after President Biden signed an executive order in July urging regulators to take a closer look at competition and monopoly issues in several sectors. The order also mandated the creation of a competition council, which urged the FCC to take a closer look at the anticompetitive nature of these arrangements.
The FCC’s existing rules technically bar landlords and ISPs from colluding to restrict broadband competition. But in a 2016 piece in Wired, Harvard Law Professor Susan Crawford outlined the various ways big telecom wiggles around the restrictions—often by simply calling what they’re doing—something else.
“Sure, a landlord can’t enter into an exclusive agreement granting just one ISP the right to provide Internet access service...but a landlord can refuse to sign agreements with anyone other than Big Company X, in exchange for payments labeled in any one of a zillion ways,” Crawford wrote. “Exclusivity by any other name still feels just as abusive.”
For example, to get around FCC rules expanding access to an ISP’s in-building wiring, companies like Comcast or Charter will often deed ownership of these wires to a landlord, then turn around and pay that landlord to ensure that nobody else can have access. Because the landlord now technically owns the wires, the FCC rules no longer apply.
ISPs also pay landlords to sign agreements that ban any other competing ISPs from advertising in the building. If you’re a landlord that violates such arrangements, you can then expect a nastygram from a company like Comcast for violating your deal.
In addition, many landlords will charge “door fees” to any company that needs access to a building to install new wiring, creating an additional layer of difficulty and expense for smaller broadband competitors trying to compete with dominant ISPs.
Collectively such restrictions serve the same function as blocking broadband competition outright. Much as it does on the national level, this lack of block by block competition directly contributes to higher prices, slower speeds, and comically-terrible customer service.
In response, a growing number of towns and cities are building their own broadband networks from scratch. But even these new entrants may find access to consumers prohibited by annoying, building-by-building restrictions erected by major ISPs.
The broadband and cable industry unsuccessfully sued to stop the rules shortly after they were created, and unsurprisingly isn’t a fan of the FCC’s plan to update them now. In a filing this week, cable industry lobbyists say they met with the FCC to downplay the scope of the problem.
“NCTA explained that the record in this proceeding confirms that deployment, competition, and consumer choice in multiple tenant environments are strong,” adding that exclusive, in-building wiring deals were “pro-competitive” because they “help ensure that state-of-the-art wiring will be deployed in MTEs (multi-tenant environments) to the benefit of consumers.”
But consumer groups like the Electronic Frontier Foundation and Public Knowledge have long argued, backed with ample evidence, that such deals are little more than glorified kickbacks to apartment owners in exchange for keeping competition at bay.
Granted just because the FCC is now fielding public input on the problem, doesn’t mean it will actually get fixed. A 2017 Notice of Inquiry into the problem by the Trump FCC went nowhere. And until the Biden administration gets around to appointing a permanent FCC boss, the agency lacks the voting majority needed to pass this (or any other) meaningful reform.
Still, the FCC’s public notice urges consumers who’ve run into these kinds of anticompetitive building restrictions to tell the FCC about it within the next thirty days. Those looking to comment should read the FCC instructions for commenting, note the docket number (17-142), then submit a comment by mail, email, or via the FCC website.