Viewpoints
The FCC’s proposal for banning bulk internet services is intended to boost competition and lower prices for residents, but it would have the opposite effect.
By: Valerie M. Sargent
We have recently shared FCC Chairwoman Jessica Rosenworcel’s plan to ban bulk billing arrangements for internet service in apartments, condos, public housing, and other multi-tenant buildings.
While the chairwoman has good intentions with this proposal, it is short-sighted and without a clear understanding of how the industry works. There are extremely negative aftereffects that can happen as a result of this type of sweeping ban, the worst of which is eliminating an avenue for connectivity in affordable communities for the residents who need low-cost internet the most.
How do these bulk billing situations work?
It is important to understand how bulk billing arrangements work in the multifamily industry. While the purpose of this proposed policy would be to enhance competition, competition is already alive and well within the industry. It often happens up front, as providers compete to have their services brought into the building. In many cases, there are two to three providers in multifamily communities, and choice is alive and well.
In creating a bundled, bulk solution, these providers are often able to offer broadband services that are better, faster, cheaper, and more reliable than a resident could secure separately on their own. Because there are many costs associated with providing the infrastructure needed to allow for broadband services, service providers and/or owners have invested in the equipment, installation, and labor costs to bring these services into the building.
In order to recover the cost of investment, some of these expenses are absorbed into the monthly service charge. Yet with bulk billing arrangements, which encompass 100 percent of the apartments, they can bring internet services at a much lower cost due to the commitment of the units, as opposed to the higher expense of traditional, individual retail accounts that a resident would incur on their own. Banning bulk arrangements would also prevent residents from being able to avoid credit checks and security deposits that are often required with individual accounts, as the owner carries the risk and commitment for the cost of delivering equipment and service to every resident.
Anyone who has been in the industry long enough realizes that due to the ways multifamily communities and buildings themselves are constructed, there are any potential number of complications that can arise when multiple providers are brought into a building without oversight or regulation by the property owner.
When a multifamily owner contracts with service providers directly, they have greater leverage to obtain strong protections that will benefit their residents, including clear responsibility for system maintenance, obligations for upgrades, and well-defined service level terms. Providers are held to a service standard as part of their contractual agreement with the owner. Owners choose to work with the partners who have competed for and won their business, often based on the reliability of those companies to provide services at the level that supports their business values the best. And frankly, most residents simply want fast, dependable, and easily accessible internet connectivity, regardless of the provider.
Does the chairwoman understand managed Wi-Fi systems?
Bulk billing arrangements allow for broadband service to be provided as a seamless, property-wide, always-on experience, which is a direct benefit to residents. Managed Wi-Fi systems are easily implemented in a bulk environment, providing an integrated set of IoT management tools for the owner to manage their community and its sustainability efforts. Communities often have security features, energy monitoring, and access control built into the systems. In addition to providing bulk internet connectivity, many broadband providers offer a Managed Wi-Fi package of services that can help reduce cybersecurity risks that come with having so many access points in today’s technology being utilized in multifamily properties.
And what about affordability and bridging the digital divide?
Most importantly, the unique populations in senior housing, affordable housing, or student housing rely heavily on the bulk model. Bulk allows for digital equity issues to be addressed. The barriers of adoption are removed for low-income college students, low-income seniors, or those who live in affordable communities. Facility operations in senior living facilities require a comprehensive network to support life-enhancing and life-sustaining measures, in addition to keeping their seniors connected to key family support, thanks to comprehensive and reliable internet that is typically provided in bulk.
Rather than banning bulk billing programs that actually help these residents, reviving the Affordable Connectivity Program (ACP) would be a much better idea. The last fully funded month of the program is April 2024, and many households who need access are in danger of losing their internet connectivity. I would still urge you to contact your local representatives regarding this important issue.
Come out in support of bulk billing
While the chairwoman’s proposal is well intentioned, it will have a discriminatory effect on lower and fixed-income residents, such as seniors and students. Banning bulk billing would encourage poor customer service, create chaos in the marketplace, and in multifamily buildings it would mire the system in legal battles, stifle competition from small business entrepreneurial companies, and limit investment in broadband infrastructure.
The following organizations have recently come together as a coalition to encourage policymakers to seek ways to support and elevate bulk billing arrangements: CCIM Institute, Council for Affordable and Rural Housing, Institute of Real Estate Management, Manufactured Housing Institute, Mortgage Bankers Association, National Apartment Association, National Association of Home Builders, National Association of Realtors, National Leased Housing Association, and National Multifamily Housing Council.
These are key associations representing providers of housing in the U.S. I hope many of you, and others will join them and continue to contact the FCC, and work with your local associations to approach policymakers. Help them understand the unintended negative consequences that could happen as a result of this type of proposal and seek the right policy solutions instead. Bulk arrangements are actually good for business in the multifamily industry, and we need to focus on internet connectivity for all.
