FCC Urged To Close Loopholes That Limit Broadband Options In Apartments

More than a decade ago, the Federal Communications Commission attempted to increase broadband competition in apartment buildings by prohibiting providers from entering into exclusive service deals with landlords.

But that prohibition didn't end all deals, or even all exclusivity deals, between providers and landlords.

On the contrary, some incumbents and landlords entered into revenue sharing arrangements, exclusive wiring agreements and exclusive marketing deals -- all of which arguably limit apartment dwellers' options for service.

The FCC, spurred on by an executive order issued by President Joe Biden, recently invited comments from the public about whether to regulate landlord-provider deals for revenue-sharing, exclusive wiring and exclusive marketing as anti-competitive.

The advocacy group Open Technology Institute weighed in on Thursday, when it urged the agency to issue new regulations would close current loopholes and “guarantee all providers access to a building’s wiring and prohibit landlord interference.”

The organization says that other comments submitted to the agency reflect “widespread agreement” that revenue sharing, exclusive marketing, exclusive wiring, and other agreements “preclude access to new entrants, create a monopoly in the building, and allow a broadband provider to extract monopoly rents from tenants.”

Numerous other commenters, including the wireless provider Starry, also urged the FCC to craft new rules.

Starry -- launched five years ago by the founder of defunct streaming service Aereo -- spelled out in its filing how deals between incumbents and landlords thwart competition.

Starry writes that exclusive marketing agreements typically prohibit newcomers from advertising or holding sales events in a building -- a restriction that's particularly damaging because “in-person and in-building marketing are primary customer acquisition tools,” the company says.

Starry also describes exclusive revenue sharing arrangements as “insidious economic tools used by incumbents to dis-incentivize property owners and managers from allowing a new competitive provider into the building.”

The company is particularly critical of “success-based exclusive revenue sharing provisions,” in which landlords' percentage of revenue is tied to the proportion of tenants subscribing to a service.

That scheme both encourages landlords to help incumbents sign up more subscribers, and penalizes landlords for allowing new entrants, Starry writes.

Not surprisingly, the industry group NCTA -- The Internet & Television Association argues against new rules, writing that restricting revenue sharing, exclusive marketing deals and wiring deals between landlords and providers “will jeopardize rather than enhance the availability of advanced broadband” to tenants.

The FCC is accepting comments until November 19.

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