Blog Post

Changing the Tactics that Restrict Internet Choice in Apartment Buildings

Millions of American citizens live in apartment buildings, also called multiple dwelling units (MDUs) — and currently too many of these residents are restricted to only one option for internet service.

Despite attempts from the Federal Communications Commission (FCC) to curb the practice of big cable and DSL companies restricting resident choice in apartments and condos, Internet Service Providers (ISPs) have been able to find workarounds that effectively create monopolies in MDUs.

For example, although the FCC prohibits provider agreements that explicitly require exclusivity, property owners can still choose to simply reject all agreements except for one, and are often paid by the provider to do so. As a result, consumers face high prices for what is often poor quality service. Another loophole is that marketing exclusivity is permitted. So to get around restrictions on exclusive agreements, ISPs will negotiate deals with buildings that require that only their marketing materials are displayed in the leasing office or distributed to residents.

A June 2016 op-ed by Susan Crawford, co-director of the Berkman Center for Internet and Society at Harvard University, outlines this problem and many of the tactics used by ISPs to prevent tenants in apartments from choosing their own internet provider.

But change can happen. There are currently 19 states and many other localities that have implemented resident’s choice, or “mandatory access” laws. These laws generally state that if a MDU resident requests a given service provider, then the building owner must let that service provider into the building, subject to some requirements related to space limitations, compensation for costs directly incurred, and other stipulations.

The problem is that these laws were passed by the cable industry when they were fearing competition from satellite, and they tend to only apply to a narrow definition of cable services. Connecticut, for example, has a law that refers only to antenna television services.

Illinois, by contrast, applies only to video services generally, while Rhode Island’s law applies beyond video services. Another approach some cities have taken, including Brentwood and Loma Linda in California, as well as Paris and Stockholm, is to require new buildings to be fiber ready so that more than one provider can access the infrastructure.

“Policies that ensure a fair and competitive marketplace for apartment buildings are not only common sense, they are also necessary to improve access and equity to high-speed internet,” Economic Development Manager in City of Santa Cruz, J Guevara said. “In several cities like San Francisco, policymakers and stakeholders are finding ways to honor a building owner’s investment and costs while maximizing tenant choice for fast and affordable internet provider options.”

In fact, just recently Supervisor Mark Farrell in the City of San Francisco introduced a proposal that would require property owners to grant building access to all state-licensed service providers. “Internet access must be viewed as a fundamental right in today’s world,” wrote Farrell in a recent op-ed for Medium. “There is no reason tenants should be limited in their choice of Internet service providers.”

These are models that could be followed when working to give residents in MDUs the choices they deserve.

In areas where state laws or local ordinances already cover cable, there’s an opportunity to use existing regulations as a starting point for formalizing a level playing field between different providers in MDUs. Even states and cities that currently lack these kinds of laws have the chance to take a logical step towards protecting consumers and fostering competition by introducing ordinances to encourage service provider competition.

MDU residents across the country should have a meaningful choice in providers for fast, affordable, and reliable internet access. If your community is facing issues with increasing competition in MDUs, or you would like more information on language for ordinances that can prevent this, Next Century Cities would like to hear from you. Please contact Deb Socia (deb@nextcenturycities.org)!

For more information about MDUs and the existing regulatory framework, check out the Fiber to the Home Council resources here.