Viewpoints
In response to the Federal Communications Commission’s (FCC) proposed ban on bulk billing of broadband services in the rental housing industry this spring, the National Multifamily Housing Council (NMHC) and other stakeholders have been pushing back at the FCC firmly and directly.
By: Kevin Donnelly, NMHC, and Valerie M. Sargent, Broadband Communities
As we have discussed in previous articles, restrictions on these bulk billing arrangements in the multi-dwelling unit (MDU) space would be particularly detrimental to underserved areas and renters, as bulk billing plays a crucial role in bridging the digital divide. Bulk billing agreements within the rental industry have effectively extended broadband services to under-resourced communities and have bolstered resilience efforts. Sadly, the FCC proposal puts those efforts at risk.
Current state of play
While full details of what is in the FCC’s draft proposed rulemaking are unknown, we have seen the FCC reverse course from a complete ban on bulk billing agreements to seemingly now proposing what we would call a consumer opt-out requirement. In practice, an opt-out requirement would undermine the economics of the bulk billing model and ultimately, we believe would harm competition in the multifamily broadband market, drive broadband prices higher for consumers, and negatively impact property operations.
NMHC and the National Apartment Association (NAA) joined forces in May to submit a letter to the FCC addressing the opt-out alternative, providing a single voice for developers, owners, and operators of rental housing at the local, state, and federal level. With one-third of all Americans renting their housing, upending the bulk and managed Wi-Fi broadband model stands to negatively impact millions of renters.
In fact, as the letter to Chairman Joyce and Ranking Member Hoyer stated:
“The FCC’s apparent new approach to require consumers’ ability to opt out of bulk service misunderstands the technical and practical implications of such a move. First, from a technical perspective, consumer opt-out may not be feasible or advisable.
Second, property operations and smart technologies rely on constant, always-on service across the property. The prospect of some apartment homes to be unconnected will disrupt the mesh network and disable critical, sustainability focused devices such as leak detection or climate controls.
Third, the bulk model has fostered a hyper competitive market across segments of the multi-tenant environment because providers, especially smaller, independent providers, are able to justify the capital expenditure to deploy bulk or managed Wi-Fi systems.
Market participation by smaller, independent providers forces large providers to serve markets that they previously determined were not economically viable to preserve market share, which promotes the consumer interest as a natural consequence of the bulk model. Enabling a reduction in service levels could negatively impact property level performance and therefore providers could disinvest in the rental housing environment which will lead to less competition, increased costs for renters and large swaths of American rental housing properties outside of the reach of modern broadband.”
Involvement from key stakeholders is encouraging.
However, NMHC and NAA aren’t taking on the FCC alone. They have also joined forces with a broader group of key stakeholders, including digital equity advocates. Public housing advocates, such as the Council of Large Public Housing Authorities, the National Hispanic Council on Aging, and a number of other groups that typically don’t weigh in with the FCC or wouldn’t necessarily raise objection to their approach to communication policy, have also voiced their concern.
Having these organizations weigh in has been extremely impactful in making the FCC rethink their approach to the bulk billing proposal that’s been on the table since March. Diverse stakeholders outside the real estate industry have also pushed Congress to take action, and NMHC has been strongly supportive of these efforts and thankful that all have been pursuing advocacy. Several members of Congress have led inquiries and bipartisan calls for the FCC to rethink its proposal, with some even calling for the FCC to withdraw the proposed rulemaking from circulation altogether.
What’s next? And what’s at stake?
This advocacy shows there is significant political and industry concern that the FCC action on bulk billing could very well backfire. The proposal puts low-income residents, affordable communities, seniors, students, and all those who live in bulk billing environments at risk and would potentially lead to higher broadband prices for millions of American renters.
Policymakers must understand that bulk and managed Wi-Fi solutions are key tools to breaking down barriers to broadband deployment, access, and adoption across rental housing communities of all types and should embrace them. If these tools are taken away or severely limited, the new reality could be that millions of low-income renters would experience lower service quality or even ultimately be disconnected, something that – in the wake of losing the Affordable Connectivity Program (ACP) – is extremely troubling to the real estate and technology communities.
Want to get involved? Parties interested in joining advocacy efforts and communicating the importance and benefit to bulk billing programs may reach out to Kevin Donnelly at NMHC to learn how you can get engaged to protect bulk and managed Wi-Fi solutions in the market.
Kevin Donnelly is vice president of Government Affairs, Technology & Strategic Initiatives for the National Multifamily Housing Council and can be reached at kdonnelly@nmhc.org. Valerie M. Sargent is a multifamily speaker, trainer and executive consultant, and is the multifamily news correspondent for Broadband Communities. Contact her at http://www.valeriemsargent.com. For more information, visit http://www.nmhc.org or http://www.bbcmag.com.
