Apartment Broadband Monopolies Still Exist Because The FCC Has Been Lobbied Into Fecklessness

Broadband

from the do-not-pass-go,-do-not-collect-$200 dept

ISPs for years have struck cozy deals with landlords effectively elbowing out competitors and allowing them to create building-by-building broadband monopolies. That stifled competition in turn results in higher costs for access to an essential utility. And while the FCC passed rules in 2007 trying to ban this, the rules were so full of loopholes as to be effectively useless.

Susan Crawford wrote pretty much the definitive story on this at Wired a while back, noting that the original rules were so terrible, ISPs and landlords could easily tap dance around them by simply calling what they’re doing… something else:

“…The Commission has been completely out-maneuvered by the incumbents. Sure, a landlord can’t enter into an exclusive agreement granting just one ISP the right to provide Internet access service to an MDU, but a landlord can refuse to sign agreements with anyone other than Big Company X, in exchange for payments labeled in any one of a zillion ways. Exclusivity by any other name still feels just as abusive.”

So after being nagged about this for fifteen years (!), last year the Biden FCC finally updated the rules. But the updated language still didn’t actually fix the problem. In part because the rule revisions only applied to cable and phone companies, not any of the numerous broadband-only fiber, fixed-wireless, or Wi-Fi ISPs that cut exclusivity deals directly with landlords to avoid having to compete:

Tenants who live in properties served by Elauwit have no option but to use its service. Under Elauwit’s model, new tenants at a building might find they have to pay $70 a month or so to access a building-wide Wi-Fi network, whether or not they were interested in that service. I, for one, would not be. Wi-Fi is great, but some use cases work better with a wired connection, both to the home, and within the home. Of course, residents who want Elauwit’s service should be able to have it if it meets their needs.

Consumers stuck under one of these arrangements are routinely annoyed by the fact they have no options. And while the FCC sometimes talks a good game about cracking down on this problem, its solutions routinely arrive soggy and half cooked a decade after the fact.

The unpopular repeal of net neutrality further constrained the FCC’s authority over these broadband-only providers. And because telecom monopolies and the GOP worked hand in hand to kill the FCC nomination of Gigi Sohn, the agency also lacks a voting majority to implement competent reform even if it wanted to (note: it routinely doesn’t actually want to).

It’s yet another issue where corruption and dysfunction derails progress, despite the fact that doing the right thing has pretty broad, bipartisan support (Texas just introduced a state law attempting to address the issue). The FCC knows it’s a problem and knows the solution, but has taken the sort of “wait and see” approach preferred by feckless career politicians terrified of upsetting large companies:

The FCC is aware of this issue. In 2022, when it last updated its rules, it noted that, “Commenters argue we should subject broadband-only providers to our rules governing MTE access, citing the potential benefits of doing so and the potential harms that could result from regulatory asymmetry if we did not.” Choosing to “proceed incrementally,” the Commission stated that it will “continue to monitor competition in MTEs to determine whether we should alter the scope of our rules to cover other providers … in response to any new information that comes to light.”

In other words, the FCC might get around to further tightening the rules another fifteen years down the road.

It’s inexcusable that it took the FCC literally the better part of a generation to outlaw these kinds of practices to help boost building-by-building competition — and yet still didn’t finish the job. But it’s fairly representative of a U.S. regulatory apparatus that’s consistently handcuffed, under-funded, and lobbied into apathy by regional monopolies that very much prefer the profitable, broken status quo.

Change is hard to come by.

You just saw what happened to a genuine reformer with a backbone who tried to nab an appointment to the FCC (Sohn). As a result, the top media and telecom regulator is routinely staffed with career politicians too worried about their post-agency political posts or think tank gigs to consistently ruffle feathers and do the right thing, even when the path forward is obvious and popular.

Filed Under: apartment monopolies, broadband competition, exclusive landlord contracts, fcc, high speed internet, telecom