According to recent statistics, about one-third of Americans – 100 million total – live in multi-tenant buildings. This includes residences such as apartments, condos, and mobile home parks. With all those people concentrated in one central location, it’s understandable that landlords sometimes focus on building a good relationship with a single broadband provider. In their mind, it simplifies tenant service and sometimes helps score a deal from a single provider happy to become the only option for that building or public housing complex.
Not everyone views this practice as being helpful to tenants, though. In July of 2021, President Joe Biden issued an executive order to target landlord-broadband alliances that “leave tenants with only one option.” The reasoning goes back to the good old foundation of capitalism itself: competition. In a capitalistic society, competition is what drives businesses to provide better service to customers. If there’s only one choice, the business might take shortcuts, become less efficient, or even take advantage of customers.
A Tale of Two Responses
When the FCC (Federal Communications Commission) chairwoman announced proposed new rules for owners of multi-tenant buildings, there were two rather loud responses. The rule itself would ban internet service providers from negotiating exclusive revenue sharing contracts with a landlord. Providers would also have to inform tenants if they’ve entered into such contracts with owners.
The initial response has a dual nature. As always, there’s a lot of debate on broadband etiquette and how far government agencies should go in order to regulate the industry. Raymond James analysts were taken aback by the proposal and believe it will have a negative impact on consumers who might actually benefit from a single, fast broadband internet option. “Stopping a build-in deal is likely to restrict the overall investment rather than encourage it,” they shared.
Another leading voice in the field is having none of that line of thought. Chip Pickering (CEO of INCOMPAS) was thrilled to hear about the proposal and believes its long overdue. “For far too long monopolies have locked out broadband competition and blocked faster speeds, lower prices and better service to a hundred million Americans who live in apartments and condo buildings.” His view is that the new FCC regulations would give customers the fairness they’re owed under the law.
Possible Rewards or Consequences The two responses highlight the possible windfall – or fallout – of the new FCC regulations. In some ways, tenants may get more options, but they also might get fewer quality options. Competition is always preferable in American society, but it only works for the customer if there are healthy, upstanding companies to compete against one another. If there are several smaller ISPs in a tenant’s area, they might open up competition, but it’s likely that the larger provider such as Dish Network internet, Frontier to name a few, will still get priority because of lower pricing or faster internet. Perks to landlords will obviously fall away, too.
Analysts and experts will likely be hashing out the finer details for months to come. For now, most people are optimistic that this will have a positive impact, or in a worst case scenario, not have much impact at all. Tenants will still have the option to go with a larger internet service provider. The existence of smaller options and competition may eventually be a non-issue for those who prefer the larger companies with more expanded services.
What the FCC is impressing on Americans, though, is that apartment, condo, and mobile home dwellers are the people who should decide the end result of this debate. Even if they make the same choice they’ve been making for the last 20 years, they will at least finally have the feeling of having made a choice at all. As always, it’s the customers who will finally decide whether this impact is positive or negative. And that’s exactly how it should be in a country that prizes competition among businesses and the power of choice for customers.
