If you live in an apartment building, you’ve probably experienced the frustration of being stuck with a broadband provider that you don’t want, don’t need, or can’t afford. You may wonder why you can’t switch to a different provider that offers better service, lower prices, or more options. You may feel like you have no choice but to pay for a service that struck a deal with your landlord, even if it doesn’t meet your needs. This is not fair, and it’s not good for consumers or competition. People should be able to choose their own broadband provider, and not be forced to use a service that has an exclusive or preferential arrangement with the property owner.
The Federal Communications Commission has recognized the importance of promoting competition and consumer choice in multiple tenant environments (MTEs), which include apartments, condominiums, office buildings, shopping malls, and other properties rented by multiple entities. It has adopted rules that regulate the kinds of agreements that service providers may enter into with landlords and prohibit certain anticompetitive arrangements.
For example, the FCC prohibits some service providers from entering into agreements that grant them the exclusive right to access and serve a location. These types of agreements harm competition by preventing additional providers from serving tenants in a building, and limit consumer choice. The FCC also prohibits service providers from entering into revenue-sharing agreements. These types of agreements create incentives for landlords to favor one provider over another, and may result in higher prices or lower quality for tenants.
However, the FCC’s rules are not enough to protect consumers and competition in MTEs, as Public Knowledge has argued to the FCC for years. The rules only apply to certain service providers, such as cable TV providers and telephone companies. They do not apply to broadband-only service providers, which are increasingly popular among consumers who want fast and reliable internet access without paying for other services they don’t use. The current rules do benefit broadband, since broadband is carried on the same wire as the services the FCC more directly regulates. But the current rules also provide an easy path for broadband providers and landlords to escape FCC oversight, which is easier and easier as fewer users demand traditional cable TV or wired telephone service. This means that broadband-only providers can still enter into exclusive or preferential agreements with landlords that may harm consumers and competition.
One example of such a broadband-only provider is Elauwit, an ISP that markets itself to landlords (not users). Elauwit claims to offer affordable and sustainable broadband to its customers, but it also limits competition by entering into exclusive contracts with property owners.
This means that 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.
These practices are not new. Boingo Wireless (which acquired Elauwit in 2018) has entered agreements with AvalonBay Communities, one of the largest apartment owners in the U.S., to provide exclusive wireless internet service to various properties across the country.
What Elauwit and its parent company Boingo Wireless do is not illegal under current FCC rules. But it is unfair and anticompetitive. It deprives consumers of their right to choose their own broadband provider. It reduces consumer choice and competition by creating artificial monopolies. It may also result in higher prices or lower quality for residents who have no bargaining power or alternative options.
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.”
Deals between ISPs and landlords are usually not made public, and determining the scope of the problem may require research, not waiting for the problem to get bad enough that it gets news coverage. The existence of companies whose business model involves bypassing FCC rules by itself should be enough to spur the FCC to action. Ordinary apartment residents are complaining, and Texas state Senator Royce West recently introduced a bill addressing the issue.
Apartment residents should not be forced to accept a service that does not meet their needs, especially when it comes to an essential service like broadband access. Broadband competition is hard enough without these deals making it even worse. It is the responsibility of regulators like the FCC to ensure that everyone has the freedom to make that choice.