ACA Connects asks FCC to pump the brakes on plan to ban 'bulk billing' in MDUs

Officials with ACA Connects and EducationSuperHighway spelled out a series of concerns they have about a proposal from FCC Chairwoman Jessica Rosenworcel that aims to ban "bulk billing" for broadband in apartments, condos and other types of multiple-dwelling units (MDUs).

Bulk billing agreements typically enable MDUs to negotiate discounted rates for broadband services on behalf of their residents.

Both ACA Connects, an organization that represents hundreds of small and midsized independent US broadband service providers, and EducationSuperHighway, a national nonprofit focused on closing the digital divide for about 17 million low-income households, are asking the FCC to effectively "pump the brakes" on the item and to spend more time reconsidering and reassessing the proposed ban.

Under Rosenworcel's proposal, the updated rules would allow tenants to opt out of bulk billing. Too often, she argued, tenants in MDUs are forced to pay high prices with limited service provider choices for broadband and other services. "Everyone deserves to have a choice of broadband provider," Rosenworcel said at the time.

Concerns ban will result in 'unintended consequences'

EducationSuperHighway and ACA Connects believe a ban will actually raise broadband prices.

A ban on bulk contracts for broadband service stands to jeopardize access to lower-cost services and potentially prohibit service providers from bidding for MDU contracts, an official with EducationSuperHighway said Tuesday in a background press conference co-hosted by ACA Connects. If there's a ban on bulk billing, it could create "unintended consequences" and harm vulnerable households that can't afford to pay a higher, traditional retail rate for broadband, the official added.

"By consolidating multiple subscriptions into a single bulk agreement, housing providers can secure lower rates, making internet access more affordable for residents. This arrangement has been instrumental in bridging the digital divide, particularly for individuals and families with limited financial means," EducationSuperHighway noted Monday in this blog post.

ACA Connects and EducationSuperHighway also don't believe a proposed opt-out option is workable because it undermines the business models that bulk billing agreements are based upon, including penetration rates that enable lower-cost options for MDU residents.

A ban on bulk billing for MDUs could likewise create a "chaotic situation" and be "disruptive" to ACA Connects members, an ACA Connects official said.

It's not clear how many ACA Connects members could be impacted by the proposed ban, but the official said it could have a wide impact for operators given that MDUs cover a wide range of scenarios, including dense urban areas, low-income communities, gated communities, student housing and even campgrounds.

Rosenworcel's proposal generated "a pretty robust response" from several dozen ACA Connects members, the ACA Connects official added.

Timing of possible new MDU rules is uncertain

It's also not clear when the FCC might convert the proposed bulk billing ban into a more formal notice of proposed rulemaking (NPRM) that would later face a vote and, if passed, seek comment on the item.

For now, the item has been placed into circulation and the FCC has yet to say when it would expect to put it to a vote. Light Reading has asked the FCC if it is providing guidance on the item's timeline.

Meanwhile, ACA Connects and EducationSuperHighway are concerned that the March announcement reaches some "strong, tentative conclusions" and that the item is in need of more vetting and commentary on how the MDU marketplace works.

ACA Connects believes the FCC would be well-served to review the Commission's 2010 report and order on the MDU matter.

The 2010 analysis found that "bulk billing arrangements predominantly benefit consumers, through reduced rates and operational efficiencies, and by enhancing deployment of broadband. Based on the evidence of all the effects of bulk billing on consumers, we do not prohibit any MVPD [multichannel video programming distributor] from using bulk billing arrangements."