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More than a third of the United States’ population lives in multi-family complexes such as apartments, condominiums, mobile home parks, and public housing, where residents typically only have access to one internet service provider (ISP).
Currently, there are rules in place to deter landlords from giving ISPs exclusive access to a building, but there are loopholes many use to get around this. This results in limited internet options for millions of Americans today.
In January 2022, the Federal Communications Commission (FCC) proposed a new rule that would prevent such deals between internet providers and multi-tenant buildings. The goal of this order is to encourage more competition, and thus more internet options, for residents in these homes.
Consumers deserve access to a choice of providers in their buildings. I look forward to having my colleagues join me in lifting the obstacles to competitive choice for broadband for the millions of tenants across the nation.
FCC Chairwoman, Jessica Rosenworcel
If the FCC votes in favor, renters could see more internet options open up to them. However, some speculate that this new proposal might discourage providers from investing in new builds – leading to still-limited or subpar choices.
Here are the five main actions the FCC proposal aims to accomplish.
5 Key Points in FCC Broadband Proposal
The proposal addresses five key points, all of which have to do with the relationship between ISPs, landlords, and tenants. Let’s explore what these key points do regarding broadband choice.
1. Prohibition of Revenue Sharing Agreements
Revenue sharing is when multiple parties divide the earnings from selling goods or services. In the internet realm, multiple ISPs compete against each other for the attention of internet consumers.
However, an ISP can collaborate with a CP (content provider) to increase its profits and gain popularity amongst a group of people. In this case, the CP is the landlord. The ISP and CP come to a written agreement and split the profits.
The proposal would prohibit ISPs from entering into any graduated or exclusive revenue-sharing agreement like this with a landlord.
2. Required Arrangement Disclosure
If the building owner wants to market a specific broadband service to the tenants, ISPs have to share marketing arrangements with landlords. They must deliver this information in plain language to the tenant.
This disclosure goes beyond marketing. Any deal between an ISP and building owner must be shared openly with the tenants.
3. Eliminate Sale-and-Leaseback Arrangements
In addition to a revenue-sharing agreement, the FCC proposal would block a sale-and-leaseback wiring arrangement between a building owner and ISP.
In a sale-and-leaseback arrangement, or simply a leaseback, an ISP sells its wiring to a landlord and then leases back the wiring exclusively.
This prevents any competing broadband company from selling to the tenants. Likewise, broadband companies are trying to expand their reach to low-income families. But a sale-and-leaseback arrangement could prevent a family from participating in the Affordable Connectivity Program or the Emergency Broadband Benefit.
4. Reduction of Anti-Competition Practices
A Public Notice in September of 2021 showed a deep concern for inhibited competition with ISPs. Many commenters stated that their broadband options were limited in apartments, condos, and even office buildings.
ISPs have found loopholes in the established rules of ISPs and consumer choice and are beginning to monopolize certain areas. The proposal aims to promote broadband competition rather than monopolizing.
5. Eliminate Limiting Opportunities for Providers
ISPs limit the competition for tenants when they make specific arrangements with landlords, like the cable inside wiring rules. As you can guess, this also means tenants aren’t given a fair chance at shopping for their choice of internet providers.
In addition, competing providers are locked out because some broadband companies have power over entire neighborhoods. This new proposal seeks to prevent such limiting of opportunities.
Final Thoughts on Internet Options for Renters
The purpose of Chairwoman Jessica Rosenworcel’s proposal is to eliminate internet service providers monopolizing apartments and condos, which could give tenants more internet options that better suit their needs.
It’s another FCC initiative meant to help close the digital divide for Americans. Across the board, broadband prices are dropping, but as it stands, many tenants don’t see those benefits with their limited options.
If there’s one thing we can all agree upon, it’s that nearly everyone needs access to the internet. Should they not have some say in who their provider is?
For now, we’ll have to wait and see what the FCC decides.