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ISPs say property owners could circumvent a bulk billing ban by creating internal private networks

Photo of ACA Connects Chief Regulatory Counsel Brian Hurley, taken from its website

WASHINGTON, June 20, 2024 – A potential federal ban on bulk billing contracts between internet providers and landlords could be exploited by property owners.

That was the warning issued by ACA Connects, a trade association for smaller Internet Service Providers, as described in a recent letter to the Federal Communications Commission.

The letter came in response to FCC Chairwoman Jessica Rosenworcel’s proposed rulemaking unveiled in March that would provide tenants with the right to opt out of a landlord-chosen internet service. 

However, ACAC pointed out that since the FCC’s jurisdiction does not include owners of multitenant buildings, they could potentially circumvent the rule by creating their own regulation-free bulk billing arrangements.

“[Property owners] could evade the FCC’s rules by constructing and operating their own internal private networks and charging each tenant an infrastructure or technology fee without any right to opt out,” ACAC said in a filing signed by Chief Regulatory Counsel Brian Hurley.

This situation would lead to lower quality services for tenants, as property owners would be less inclined to upgrade their technology or capacity limits in the absence of market pressure, ACAC said.

According to one estimate, about 38 million Americans live in apartments.

Although the proposal is intended to spur competition by giving tenants choice in providers, ACAC said competition already sufficiently existed under current arrangements. ACAC said ISPs still have to compete among themselves to strike a bulk billing deal with a property owner.

“Because of this competition, residents in [Multitenant Environments] with bulk deals have seen rates drop, performance capabilities rise, and attention to customer service increase,” ACA said.

On Thursday, New Street Research policy analyst Blair Levin published a client memo indicating he did not think the FCC would adopt a bulk billing ban soon, mainly because the opposition includes not just ISPs but also groups concerned about Internet bills going up for low-income households and individuals on fixed incomes.

“Still, if the FCC moves forward with its proposal, it will likely adopt a more modest approach than what the FCC Chair suggested in her initial press release,” Levin said. “A ban is highly unlikely, but an opt-out requirement is still possible.”

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