Two Decades Later And The FCC Is Still Trying To Crack Down On Anti-Competitive Deals Between Landlords And Broadband Monopolies

For decades, U.S. broadband providers have struck cozy deals with landlords effectively elbowing out competitors and allowing them to create building-by-building broadband monopolies. That stifled competition results in higher costs, slow speeds, and worse overall service. And while the FCC passed rules in 2007 trying to ban the practice, they were so full of loopholes as to be effectively useless.

Susan Crawford wrote pretty much thedefinitive story on this at Wired in 2016, noting that the original rules were so terrible, ISPs and landlords could easily tap dance around them by simply calling what they were 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 forfifteen years(!), the Biden FCC finallyupdated the rules in 2022. 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 dealsdirectly with landlords to avoid having to compete.

Smaller ISPs in some states tell me that there are still state laws (like New York's Public Service Law 228) that give bigger cable broadband providers an unfair advantage in accessing apartment complexes simply because they provide cable TV service.

And there are still loopholes in federal rules the broadband industry exploits to monopolize access, once again by simply calling exclusive access... something else. Such as the practice of bulk billing," or deals between landlords or development associations and (usually big) ISPs that force everybody to subscribe to access from a single provider (monopolization by another name).

Bulk billing usually involves your apartment building or development striking a (usually) exclusive deal with a broadband provider, often subsidized through your HOA or rental fees. It's often presented as a way to save money, but it often doesn't work out that way in practice. Broadband prices still rise, competition is muted, and escalating HOA fees usually offset any money that might be saved.

After a lot of consumer complaints, the FCC just announced plans to crack down on that as well:

Everyone deserves to have a choice of broadband provider," said FCC Chairwoman Rosenworcel. That is why it is not right when your building or apartment complex chooses that service for you, saddling you with unwanted costs, and preventing you from signing up for the plan and provider you really want"

Landlords, who can net some nice extra cash striking such deals with the likes of Comcast or Charter or AT&T, are already whining about the proposal despite it not even having been voted on yet.

While there's no doubt that big ISP lawyers are clever, they're not that clever, and it raises the question as to why it has taken the FCC the better part of two decades to crack down on block by block monopolies that raise prices and mute competition.

And the answer, as usual, is that regulatory capture prevents the agency from being too pointed in its criticism of the culprits (you'll notice that the dodgy ISPs are never specifically identified), or too aggressive in their oversight and enforcement, lest they upset politically influential telecom giants, or disrupt future commissioner employment opportunities.