FCC agrees to crack down on ‘sweetheart deals’ that restrict broadband choice in apartments, condos

The Federal Communications Commission (FCC) voted unanimously to adopt new rules that will crack down on exclusive broadband agreements made between landlords of multi-tenant buildings and internet service providers (ISPs).

The rules were pushed by FCC Chairwoman Jessica Rosenworcel last week and were first proposed in January. They aim to increase ISP competition in multi-tenant buildings like apartments and condos by tightening loopholes in existing FCC rules that prohibit exclusive contracts made between landlords and ISPs.

Specifically, the rules would prohibit ISPs from entering into graduated revenue-sharing agreements or exclusive revenue-sharing agreements with building owners. These agreements are when ISPs give a building owner a cut of their revenue to get access to the building and its tenants.

It would also require ISPs to clearly disclose to tenants if it has an exclusive marketing agreement with building owners and would curb “sale-and-leaseback arrangements,” where ISPs sell wiring to a building owner and lease it back on an exclusive basis.

“The Federal Communications Commission has long banned internet service providers from entering into sweetheart deals with landlords that guarantee they are the only provider in the building. But the record in this proceeding has made it clear that our existing rules are not doing enough and that we can do more to pry open the door for providers who want to offer competitive service in apartment buildings,” Rosenworcel said in a statement.

She added that the new rules will “improve customer choice” and were “important steps that will increase competition.”

The move was also applauded by public interest groups. Jenna Leventoff, a senior policy counsel at Public Knowledge, said ISPs and landlords had “exploited loopholes” in existing FCC rules to force people to pay more for broadband plans that may not meet their needs.

“We welcome this action as a step toward advancing consumer choice no matter where someone lives or works. However, with landlords and broadband providers constantly creating new loopholes, consumers in multi-tenant environments won’t have full choice until the Commission takes action to ban all arrangements that limit consumer choice in multi-tenant environments,” Leventoff said in a statement.