In a move to promote competition and consumer choice, the Federal Communications Commission (FCC) plans to vote on new rules that would change how broadband providers serve apartment buildings and other multiple-tenant environments (MTEs).

In a press release on Friday, the FCC announced that Chairwoman Jessica Rosenworcel circulated a proposal that "would halt practices that evade long-existing FCC rules intended to allow tenants to choose their own provider."

The FCC has a longstanding ban on exclusive access agreements. However, the agency said that ISPs are bypassing that ban through "a pattern of new practices that inhibit competition," which were highlighted in a round of public comments submitted late last year on competitive access to broadband in apartment and office buildings.

Figure 1: "With more than one-third of the U.S. population living in apartments, mobile home parks, condominiums, and public housing, it's time to crack down on practices that lock out broadband competition and consumer choice," said Chairwoman Jessica Rosenworcel in a press statement announcing the proposed measures.
(Source: SOPA Images Limited/Alamy Stock Photo)

According to those filings, public interest groups including Public Knowledge and Next Century Cities, among others, shed light on how a series of ongoing practices and loopholes inhibit competition and enable providers to monopolize buildings.

"The Commission barred providers from entering into exclusive service contracts with MTEs in 2008. It did not, however, extend this prohibition to exclusive revenue sharing and wiring agreements," wrote Next Century Cities' policy counsels Ryan Johnston and Corian Zacher in comments to the FCC in October. "Now, incumbent providers are willing and able to effectively impose exclusive service agreements through the use of these permitted arrangements."

Referring to wiring agreements, whereby a single provider gets the right to use elevator wiring to deliver broadband, they add: "These agreements usually require new entrants to install new wiring in an MTE if they wish to provide service to its residents, a cost that small providers, cooperatives, and municipalities may be unable to bear."

On revenue-sharing agreements, whereby providers share a portion of their revenue with landlords for each resident that subscribes to their service, counsels for Next Century Cities said: "Unsurprisingly, as new competitive providers seek to enter a market they may be unwilling or unable to engage in similar revenue sharing agreements. By deterring new market entrants, consumer choice is reduced."

Votes needed

According to a summary of the draft order circulated by Rosenworcel last week, the measures – if adopted – would seek to prohibit "graduated" or "exclusive" revenue sharing agreements between building owners and providers; require providers to disclose to building tenants the existence of their exclusive marketing arrangements; and clarify that the FCC already prohibits "sale-and-leaseback arrangements," thus ending exclusive access to inside cable wiring.

Whether these measures are adopted depends on a vote by the whole commission, which is currently down one member and deadlocked with two Democrats and two Republicans. President Biden's pick for Commissioner, Gigi Sohn, is still awaiting a vote in the Senate.

In a statement following Friday's announcement, Shiva Stella, senior policy counsel at Public Knowledge, said the organization welcomed this action as "an interim step" toward promoting consumer choice but forecast a larger fight for broadband consumers if and when all commissioners are confirmed.

"[W]ith landlords and ISP's constantly creating new loopholes, consumers in multi-tenant environments won't have full choice until the Commission takes action to ban all arrangements that limit consumer choice in multi-tenant environments," writes Public Knowledge's Stella. "Additionally, the Commission's efforts to promote broadband competition more broadly will ultimately require the direct authority found in Title II of the Communications Act. We look forward to working with a full Commission to advance these goals."

The move was further cheered by the Wireless Internet Service Providers Association (WISPA), which released a statement saying it has "long-sought to open up the underserved Multi-Dwelling/Multi-Tenant marketplace to more providers."

"We believe that the Chairwoman's work represents great forward progress on the matter, which, when completed, should help consumers experience better and more affordable offerings for their broadband services," said Louis Peraertz, VP of policy for WISPA. "We look forward to learning more details about the Chairwoman's proposal, and pledge our efforts to work with all stakeholders to ensure it benefits pro-consumer choice."

According to an FCC spokesperson, the full proposal will be released once it is voted on and approved by the commission.

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— Nicole Ferraro, site editor, Broadband World News; senior editor, global broadband coverage, Light Reading. Host of "The Divide" on the Light Reading Podcast.

A version of this story first appeared on Broadband World News.