FCC Inquiry Into MTE Broadband Sparks Industry Divisions, Property Owner Resistance

Commenters were split over possible FCC broadband regulation in apartment buildings and other residential and commercial multiple tenant environments (MTEs). Incompas, Sprint and others supported regulatory efforts to identify and remove barriers to broadband deployment and competition. Property owners, NCTA and others voiced concern about possible new broadband regulation. Initial comments were posted Monday and Tuesday in docket 17-142 on a notice of inquiry on the state of the MTE broadband market and whether the commission should act (see 1706220036).

The FCC should investigate use of anti-competitive commercial MTE arrangements, such as revenue-sharing and wiring-exclusivity agreements, said Incompas: "It should also collect information on the use of bulk billing and exclusive marketing agreements to ensure that the benefits to consumers of such practices continue to outweigh the competitive harm that results. The Commission should encourage state and local governments to adopt or reform pro-competition mandatory access laws that can complement the Commission’s own rules." Horry Telephone (here) and NetMoby (here) supported the FCC inquiry.

Wireless service in airports, sports stadiums, shopping malls, transit systems and other public venues -- which often fit the MTE definition -- "is of ever increasing importance to consumers," said Sprint, which "supports the FCC's investigation into exclusive agreements governing these spaces." It said distributed antenna systems are increasingly needed in such venues to supplement traditional macrocell service. Starry urged the FCC "to act quickly to eliminate" barriers to MTE broadband deployment, including by "emerging 5G technologies" such as its fixed service using "millimeter waves to re-imagine wireless last-mile broadband access."

The Fiber Broadband Association backed a new rulemaking. The FCC should "(1) not interfere with State and local mandatory access laws that promote competition in broadband deployment in MTEs; (2) continue to allow broadband providers to enter into marketing and bulk-billing arrangements with MTE owners that are beneficial to MTE tenants, subject to the conditions discussed herein; and (3) prohibit exclusive leaseback arrangements within MTEs except where providers can show they are not anti-competitive," the FBA said.

Many MTE occupants still have no options other than the provider chosen by property owners, said San Francisco, which noted its Article 52 "mandatory access" law gives occupants a choice. "Exclusive marketing agreements, revenue sharing agreements, and bulk-billing arrangements could be stifling competition in MTEs. San Francisco also shares the Commission’s concern over the technical feasibility of sharing inside wiring." But it said the FCC has no authority to pre-empt local regulations that prohibit property owners from denying access to competitive providers, and it called on the agency to respect state and local authority. Seattle also urged the FCC not to interfere with its efforts and those of San Francisco, Boston and other localities to promote digital inclusion. The Multifamily Broadband Council refiled a petition seeking pre-emption of the San Francisco law.

The FCC shouldn't propose rules that would disrupt contractual arrangements between apartment building owners and broadband providers, said the National Multifamily Housing Council. "Exclusive marketing, bulk billing, revenue sharing, and exclusive wiring agreements promote the availability of state of the art, affordable broadband." It said the FCC lacks authority to regulate such contracts and most apartments occupants have access to multiple service providers: "The Commission should refrain from regulation when no problem exists." Camden Property Trust (here) and RealtyCom Partners (here) also objected to possible FCC regulation.

NCTA said the proceeding raised two key questions on MTE broadband. "Do bulk billing arrangements and exclusive marketing or access-to-wiring agreements between a broadband provider and an owner of an MTE promote broadband deployment and benefit consumers," and "would government regulation of such arrangements impede broadband deployment?" it asked: "'Yes'” to both. Hotwire Communications, an MTE competitor, opposed action "that would disrupt existing arrangements for use of MTE wiring in ways that would ultimately impair rather than promote the availability and quality of broadband-based services to MTE residents, and would raise the cost." Orlando Telephone said bulk service agreements can be cost effective.