Conflicting Views Widen Over FCC Inquiry Into MTE Broadband and Possible Regulation

Disagreements grew over potential FCC broadband regulation in apartment buildings and other multiple tenant environments (MTEs) as more parties weighed in on all sides of a commission inquiry in replies posted Tuesday and Wednesday. Property owners are opposed to rules regulating them; localities are concerned about federal pre-emption of their competitive efforts; and industry parties are split over whether the FCC should move ahead with a rulemaking on MTE broadband or take certain actions. They were reacting to a notice of inquiry and initial comments in docket 17-142 (see 1706220036, 1707250050 and 1707260034).

The FCC should "refrain from imposing regulatory limits on exclusive marketing, bulk billing, revenue sharing or exclusive wiring agreements for broadband" in MTEs, said the Building Owners and Managers Association International, the International Council of Shopping Centers, the National Apartment Association, the National Association of Realtors and other real estate groups. "Such agreements actually enhance competition" and help "incentivize infrastructure deployment, reduce costs, and establish higher service quality standards," they said.

The commission shouldn't "propose rules that would disrupt" existing contracts between building owners and communications providers, the National Multifamily Housing Council said. It said MTE residents benefit from agreements that provide "choice in service providers and service offerings, and lower rates," and that limit owner costs. New rules could exceed FCC authority, particularly if it reclassifies broadband as an information service, the council said. Also opposing new regulation were RealtyCom Partners, Hubacher & Ames and Choice Property Resources.

If the FCC wants to help, it can start by "preserving local laws that promote competitive broadband access in MTEs," said Boston, Portland (Oregon), and Maryland's Anne Arundel and Montgomery counties. "Guaranteeing providers monopoly environments, even if for a better business case, is fundamentally at odds with the underlying purpose of the Telecommunications Act" and the FCC, they said. Seattle urged the FCC not to hamper its efforts or those of Boston, San Francisco and other localities to promote competition through various means. The Fiber Broadband Association said the FCC shouldn't interfere with state and local MTE broadband mandatory-access laws, should allow MTE-provider marketing and bulk-billing agreements, and should bar exclusive leaseback arrangements unless providers can show they're not anticompetitive.

The inquiry is a "valuable" exploration of how the FCC "might strengthen and expand its rules on access to MTEs," T-Mobile said. It said consumers are increasingly gaining broadband access through wireless companies, often through distributed antenna systems, so "meaningful access to those DAS facilities on reasonable terms and conditions is important" for serving MTEs. The proceeding "provides a useful tool" for determining "whether the current business practices for DAS are frustrating market forces and harming consumers," T-Mobile said.

Lumos Networks urged "appropriate reforms" to "improve competitive access" to MTE. The FCC should investigate and remedy restrictive licensing and revenue-sharing arrangements; prohibit exclusive wiring, marketing and rooftop-access deals; and encourage more and better mandatory-access laws, the mid-Atlantic fiber provider said.

The FCC should reject "sweeping claims" that building owner and consumer interests are always aligned, the California Association of Competitive Telecommunications Companies said. It backed calls of Incompas and others for the FCC to "investigate use of revenue sharing agreements, revisit its exclusivity rules and defer to state and local jurisdictions by refusing to preempt pro-competitive mandatory access laws like San Francisco’s Article 52 local ordinance." Incompas said the record showed MTE broadband and video competition "is far less robust than the market for these services in single family homes," and called revenue sharing "a kickback from the provider to the landlord."

But NCTA opposed opening a rulemaking to regulate contract terms and arrangements between broadband providers and MTEs. Initial comments showed that even if the FCC had authority to restrict contracts, "there is no reason it should do so," the cable group said. GigaMonster, a fiber-based ISP, said characterizations of NOI initiatives as enhancing competition are "naive" or "disingenuous" because if implemented, "there would be dramatically fewer competitive broadband providers operating in any MTE market where the proposed rules were legally binding."

Elauwit Networks objected to proposals to limit bulk broadband service offers in MTEs. "[B]ulk service is not only essential to the continuing viability of competitive broadband service providers like Elauwit, but is also by far the most economically and socially efficient model" for serving MTE residents, including those "most vulnerable to the predatory strategies and practices of incumbent cable and telco carriers," it said. MTE competitor Consolidated Smart Systems called exclusive-marketing and bulk-billing agreements necessary for smaller providers. Satel, a private cable company, said parties pushing for FCC regulation "hope to change the rules in their favor," and "have the money to overrun any small providers at will."