By Kevin Donnelly, VP of Government Affairs, Technology and Strategic Initiatives, NMHC
Kevin Donnelly is Vice President, Government Affairs, Technology and Strategic Initiatives, with responsibility for representing the interests of the multifamily industry before Congress and federal agencies
On January 21, FCC Chairwoman Jessica Rosenworcel began circulating a proposed Order and Declaratory Ruling in an effort to establish new rules on the types of agreements broadband providers and apartment operators can enter into and increase transparency around others.
The stated goal of the Chairwoman’s action is to boost competition in the multifamily broadband market and increase choice for consumers. NMHC, and the broader real estate industry, have been actively working to educate and lobby the FCC to not take action that could inadvertently work against our shared goal of boosting deployment and ensuring maintenance of broadband networks that enable apartment residents to receive reliable, high-speed internet.
Exact details on what Rosenworcel is proposing are still unclear as her office is using an FCC procedure that allows her to circulate the proposed Order and Declaratory Ruling to other Commissioners without making it public. While we await further information, Rosenworcel has indicated publicly that the FCC will take the following actions:
- Prohibit broadband providers from entering into graduated revenue sharing agreements or exclusive revenue sharing agreements with a building owner;
- Require broadband providers to disclose to renters if an exclusive marketing arrangement is in place with the building owner; and
- Clarify that existing rules prohibit sale-and-leaseback wiring arrangements.
For this Order and Declaratory Ruling to take effect, all Commissioners (currently two Democratic and two Republican members) would need to agree unanimously. Without support from all Commissioners, the Chair would need to use a different procedure for consideration and potentially wait until a third Democratic Commissioner is confirmed for the role.
NMHC Weighs in to Defend the Industry
NMHC is continuing to weigh in with the FCC and other policymakers against any further regulation of agreements between property owners and broadband providers—we continue to explain that what is being proposed is not only unnecessary but would hamper deployment and limit competition.
Throughout this and accompanying proceedings dating back to 2017, NMHC and the real estate industry have demonstrated that the types of contract terms under review are not anticompetitive. In fact, the existing partnership model has been extremely successful in ensuring the delivery of reliable, high-speed broadband to renters. The reality is that competition is already strong and broadband deployment in the multifamily area is working as intended, with nearly 80 percent of apartment properties having two or more broadband providers on-site according to recent industry survey data.
Where the broadband market is failing in the multifamily environment is in lower-income, affordable and smaller properties where broadband providers cannot or will not make the needed infrastructure investments to serve these properties and their residents. NMHC believes the proposed rules changes will not address these issues and has the potential to only make the situation worse.
The FCC has not signaled whether this will be the only rules change they seek on the proceeding, but NMHC will continue pressing policymakers to avoid imposing new regulations on providers and property owners that will ultimately work against our shared goal of boosting deployment and modernizing our broadband infrastructure, especially in low-income and smaller properties that desperately need these investments.
Staff Resource
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