WASHINGTON, October 21, 2021 – Opponents of exclusivity arrangements that give tenants of multitenant buildings less choice of internet service provider are urging the Federal Communications Commission to eliminate all manifestations of these contracts that they say harms competition and locks landlords into burdensome long-term contracts.
While the FCC has previously banned exclusive access agreements that granted a single provider sole access to a building, it did not do so for exclusive wiring, marketing and revenue sharing arrangements. That means third party service providers cannot share the building wires with the telecom with that privilege and cannot market their services to the building’s residents.
The FCC launched a comment period in September to field arguments about what to do with these holdout issues that gave priority to ISPs. In an early submission, the internet and television association NCTA said the commission should deny all broadband providers exclusive access to these buildings, but not exclusive wiring agreements.
Internet and competitive networks association INCOMPAS said in its submission that the competitive environment has continued to suffer due to these exclusive deals and, in the case of retail shopping centers, their deals have been extended over the “last several years.”
It is asking for a complete ban on the wiring, marketing and revenue sharing arrangements, which they say “make it tougher for new entrants to effectively compete in MTEs.
“Competitive providers are still asked to participate in revenue sharing arrangements or are routinely denied access to MTEs because of exclusive wiring or marketing agreements,” INCOMPAS said, adding consumers and businesses “lose out on the faster speeds, lower pricing, and better customer service that competitors offer.”
Public Knowledge similarly said there is a lack of competition emerging from these practices that is increasing prices and restricting choice for tenants.
“Although the FCC has banned explicit exclusive agreements in multi-tenant environments (MTEs) such as apartment, condos, and office buildings, landlords and internet service providers have exploited loopholes to nevertheless create de facto monopolies in buildings,” said Jenna Leventoff, senior policy counsel at Public Knowledge.
The group is asking for a ban on “all types” of these arrangements that “negatively impact consumer choice, ensuring all ISPs have access to a building’s wiring regardless of the owner, creating a ‘rocket docket’ to quickly adjudicate supposed violations, and creating a single regulatory regime for both commercial and residential MTEs.”
In a joint submission on Wednesday, Consolidated Communications Holdings and Ziply Fiber said they “often confront such anti-competitive agreements,” with revenue sharing and marketing arrangements being the most “prevalent and troublesome.
“In practice, these agreements frequently work together as a complete bar to competing providers, giving the incumbent broadband provider a de facto exclusive service agreement with respect to an MTE,” the submission said, alleging MTE owners will “explicitly cite their lucrative revenue sharing agreements with an existing provider as their reason for not allowing our companies to access their buildings” and so to not to lose out on that compensation.
Harm on building owners
For the Stewards of Affordable Housing for the Future, exclusive wiring arrangements have not only limited choice for residents, but it has allegedly locked housing providers into “long-term onerous contracts that prohibit them from pursuing connectivity solutions, such as owner-provided broadband, at their properties.”
Members of the affordable housing group are recommending the FCC impose “reasonable standards” on such agreements, which require ISPs to offer low-cost programs or owner provided broadband at a competitive cost and give landlords an option to exit or renegotiate a contract after a certain time.
The FCC’s look into the issue comes after a bill, introduced on July 30 by Rep. Yvette Clarke, D-New York, outlined plans to address exclusivity agreements between residential units and service providers, which sees providers lock out other carriers from buildings and leaving residents with only one option for internet.