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New FCC Rules “Unlock” Broadband Competition in Multi-Tenant Rentals

Erlin Taylor - Monday, July 18, 2022
New FCC Rules “Unlock” Broadband Competition in Multi-Tenant Rentals

On February 15, 2022, the Federal Communications Commission (FCC) announced that it will adopt new rules to “unlock broadband competition” for people living and working in multi-tenant properties. These include apartments, office buildings, and public housing.

These new directives prevent property owners from entering so-called sweetheart deals with internet service providers (ISPs). In such agreements, an ISP will share revenue with the landlord if it’s allowed exclusivity in the property.

FCC: Revenue-sharing prevents competitive service.

The FCC claims that these revenue-sharing contracts keep tenants from looking for better broadband options. With only one ISP in their building, they’re forced to use whatever is available even though the service doesn’t fit their needs.

According to FCC Chair Jessica Rosenworcel, “One-third of this country live in multi-tenant buildings where there often is only one choice for a broadband provider, and no ability to shop for a better deal. The rules we adopt today will crack down on practices that prevent competition and effectively block a consumer’s ability to get lower prices or higher quality services.”

The FCC rules state that:

  1. Revenue-sharing agreements granting ISP exclusivity in a multi-tenant building are no longer allowed.
  2. Sale-and-leaseback arrangements on cable inside wiring are prohibited as well.
  3. Property owners must disclose to their tenants any exclusive deals they may have with an ISP. The disclosure needs to be accessible and written in a language that their tenants will understand.

Apartment groups protest the new FCC ruling.

The new FCC directive isn’t entirely welcomed in the multifamily sector. The National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) have released a joint statement protesting the ruling.

The joint press release expressed the two groups’ disappointment in the FCC order. It also said that the ruling is detrimental to apartment residents, as it will discourage ISPs from investing in broadband facility maintenance and upgrades. NMHC and NAA also refuted the FCC claim regarding ISP exclusivity, stating that 80% of the apartments they surveyed nationwide have two or more ISPs in place.

Additionally, NMHC and NAA asked the FCC to focus its intervention on broadband services in smaller, lower-income properties. They claim that owners of such properties often struggle to find even one ISP to serve them.

The press release further said: “As Americans continue to spend more and more time at home, connectivity has never been more important – it can often make or break a resident’s ability to earn a living and provide quality education to their children. That’s why it’s even more worrisome that the FCC’s new Order and potential for future regulatory uncertainty in this space will likely harm investment in the deployment, maintenance, and modernization of broadband networks at a time when we need the public and private sector to work together to end the digital divide once and for all.”

Do you have questions on how you can improve your tenant services? Get in touch with us today, and we’d be happy to entertain your inquiries.