FCC leadership begins work to prevent landlord-ISP exclusivity deals

America's principle communications agency is taking another step to promote broadband competition, this time targeting those living in apartment buildings, condos and other muti-tenant homes.

The Federal Communications Commission said Jan. 21 that Chairwoman Jessica Rosenworcel circulated a first report and declaratory ruling that would halt practices of revenue sharing and exclusivity agreements between landlords and internet service providers.

The ruling is intended to spur the number of broadband options available in multi-tenant homes by prohibiting ISPs from entering into exclusionary revenue sharing agreements with landlords or building owners. The ruling, if voted for approval by the FCC's leadership, would also clarify language that has allowed entities to use a loophole on cable wiring rules.

"More than one-third of the U.S. population live in apartments, mobile home parks, condominiums, and public housing," Rosenworcel said in a news release. "It's time to crack down on practices that lock out broadband competition and consumer choice."

The agency in September 2021 opened a proceeding seeking comments on how exclusivity agreements between building owners and internet service providers could be affecting competition in the industry. While it is illegal for a building owner to sign a contract allowing only one provider to offer service to an entire building, they can still sign other types of agreements with ISPs that give both parties financial incentives to limit tenants to a single company.

Major ISPs like Comcast Corp. and Cox Communications Inc. have argued that these agreements — including revenue sharing agreements, and exclusive wiring and marketing arrangements — reduce costs and thus benefit customers. But consumer advocates and smaller operators say these deals limit both competition and deployments, leading to higher prices and poorer service for consumers.

The FCC also argued that the lack of consumer choice may throttle access to providers participating in the agency's affordable broadband programs, notably the Affordable Connectivity Program, the next-phase iteration of the pandemic-era Emergency Broadband Benefit Program. The ACP was included in the president's sweeping bipartisan infrastructure package that was signed into law this past November.

A White House fact sheet on broadband competition cited data showing that more than 200 million U.S. residents live in an area with only one or two reliable high-speed internet providers, leading to prices as much as five times higher in these markets than in markets with more options. In an executive order this past summer, President Joe Biden asked the FCC to initiate a rulemaking to prevent landlords and internet service providers from inhibiting tenants' choices among broadband providers.