The FCC wants to outlaw exclusivity agreements between ISPs and landlords, but this and Biden’s wider broadband agenda will stall without a Democrat majority
Many households in the US only have a choice of two ISPs: It has long been known that the US broadband market is characterised by limited competition at the retail level. The Federal Communications Commission (FCC) reports that only 37% of Americans in urban areas have access to three or more ISPs for their home broadband. This goes down to 16% in rural areas. This is particularly evident in the higher speed tiers, since less than 15% of people accessing 100Mbps speeds are currently able to choose from three or more ISPs. The White House estimates that prices in areas with only two options can be five times higher than they are in more competitive markets.
Agreements between ISPs and landlords are under scrutiny: Exclusivity agreements between ISPs and landlords in apartment and office buildings are a big part of the problem. The FCC has banned these types of agreements since 2008, however the rules still allow deals that in practice have a similar effect. ISPs and landlords have been able to strike revenue-sharing agreements (e.g. “door fees”, where ISPs pay for access to buildings), exclusive marketing agreements, or even deals that prevent new ISPs from using existing wiring. In September 2021, the FCC sought input from stakeholders on these agreements, after the White House asked it to intervene.
New rules would close the loopholes: Following its call for comments, the FCC found that these practices are still common, and could even hinder access to providers participating in schemes for low-income households, such as the new Affordable Connectivity Program. This week, the FCC announced it will discuss a draft Report and Order, which will seek to prohibit revenue-sharing agreements between ISPs and building owners, as well as arrangements related to the use of the wiring that effectively block access to alternative providers. Exclusive marketing arrangements would still be allowed, but operators would have to disclose them to tenants.
The FCC will need a third Democrat commissioner to enact Biden’s agenda: The FCC’s proposal is part of a broader shift in broadband policy under the Biden administration. The White House wants the FCC to increase transparency for consumers (e.g. by adopting ‘nutrition labels’ for broadband services) and to restore net neutrality rules which were repealed in 2017. The White House is hopeful that more transparency and stronger competition will eventually drive broadband prices down. This agenda will only come to fruition when the FCC gets a third Democrat commissioner, since Republican commissioners are unlikely to support these measures. In 2019, the FCC under Trump looked into exclusivity agreements, but did not take any real action other than welcoming “state and local experimentation”. The confirmation of Gigi Sohn, the candidate chosen by Biden for the role, is still facing delays in Congress. With that, so does Biden’s broadband agenda.
Source: https://www.fcc.gov/document/chairwoman-rosenworcel-aims-promote-broadband-choice-apartments
