Reaction to FCC's Broadband Competition Rules

"The Federal Communications Commission has long banned internet service providers from entering into sweetheart deals with landlords that guarantee they are the only provider in the building," said Federal Communications Commission Chairwoman Jessica Rosenworcel. "But the record in this proceeding has made it clear that our existing rules are not doing enough and that we can do more to pry open to the door for providers who want to offer competitive service in apartment buildings. That’s why we take three steps today.

• First, we crack down on revenue sharing agreements that can be used to get around our existing rules banning exclusive access. Specifically, we ban exclusive revenue sharing agreements, where the provider agrees with the building that only it and no other provider can give the building owner a cut of the revenue from the building. We also ban graduated revenue sharing agreements, which increase the percentage of revenue that the broadband provider directs to the landlord as the number of tenants served by the provider go up.
• Second, we require broadband providers to disclose to tenants in plain language if they have an exclusive marketing agreement with the landlord, so tenants know that they may have additional choices for service.
• Finally, we clarify that sale-and-leaseback arrangements violate our existing rules that regulate cable wiring inside buildings. Since the 1990s, we have had rules that allow buildings and tenants to exercise choice about how to use the wiring in the building when they are switching cable providers, but some companies have circumvented these rules by selling the wiring to the building and leasing it back on an exclusive basis. We put an end to that practice today."

FCC Commissioner Brendan Carr said, "With our vote today, the FCC acts to ensure competitive choice for those living and working in MTEs. We do so by adopting new rules prohibiting providers from entering into certain types of revenue sharing agreements that could otherwise be used to evade our existing consumer protections. We do so by adopting new rules requiring providers to disclose the existence of exclusive marketing arrangements in simple, easy-to-understand language. And we do so by clarifying the Commission’s existing prohibitions on “sale-and-leaseback” arrangements, which can effectively deny access to alternative providers. These are important actions that align with Commission precedents as well as the iron laws of economics."

"Every American should have access to high-quality, affordable modern communications services—including the one-third who live in multi-unit buildings. For too long, millions of Americans living and working in multi-tenant environments have faced barriers to obtaining the best communications services and prices. Today’s decision will remove some of those obstacles by prohibiting certain types of revenue sharing agreements, requiring plain-language disclosure of exclusive marketing arrangements, and prohibiting the sale-and-leaseback of buildings’ inside wiring. I am pleased to support today’s item, and I look forward to continuing to work with my colleagues to remove other barriers to competition in multi-tenant environments," said FCC Commissioner Geoffrey Starks. 

Benton Senior Counselor Andrew Jay Schwartzman said, “Today’s decision promises to offer more: more broadband choice to more Americans. I suspect that the scope of this problem has been underestimated. I do know, from personal experience, that it has been too easy to evade the current rules so that homeowners and tenants lost the benefits of competitive pricing and choice of internet providers. This order is a very good thing.”

“We welcome this action as a step toward advancing consumer choice no matter where someone lives or works," said Jenna Leventoff, Senior Policy Counsel at Public Knowledge. "However, with landlords and broadband providers 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. 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.”

Jonathan Schwantes, senior policy counsel, Consumer Reports, said, “This is a great win for broadband consumers. The proposal by Chairwoman Jessica Rosenworcel will eliminate loopholes that internet service providers have exploited to limit choice and increase cost for consumers. Policies that introduce more options for consumers and competition in the broadband marketplace will ultimately create lower prices and better quality of service for consumers.”

“Finally, competition comes to the condo. I feel like we just knocked down an old monopoly skyscraper at the FCC,” said Chip Pickering, CEO of INCOMPAS. “Introducing more broadband choice will unlock lower prices, faster speeds and better customer service for tens of millions of Americans living in apartment buildings and other multi-tenant environments. By ending broadband monopolies in buildings and enabling greater competition, we can kickstart a deployment revolution for fiber and faster speed services that cost less and deliver more to one third of American families living, working and studying from an apartment they call home."