Law360: Bulk Billing Regs Could Hurt Lower-Income Tenants, FCC Told

Tighter regulations on bulk billing in multitenant environments could make it harder for seniors, low-income households and students to afford high-speed internet service, industry representatives told the Federal Communications Commission.

In recent meetings with FCC staff, several groups claimed most tenants want bulk agreements with internet service providers to stay in place because they are happy with the service, and the deals keep their rates reasonable.

FCC Chair Jessica Rosenworcel proposed in March to put new restrictions on ISP bulk billing deals that could be anticompetitive, though she has not released a formal proposal. The FCC has looked at the issue before, but that was roughly 14 years ago, and Rosenworcel said the record needs to be refreshed because the marketplace has changed.

But the industry representatives, led by the National Multifamily Housing Council and National Apartment Association, said in a letter posted Friday by the FCC that the proposed rules would only harm tenants, who view the arrangements favorably.

“Regulation of bulk billing agreements between property owners and broadband providers is not only unnecessary, but would likely raise broadband prices for millions of American renters and could potentially disconnect millions more,” they said. “This concern is particularly acute for residents of affordable, senior, and student housing.”

They also claimed that regulation “could lead to lower service quality for many broadband consumers, hamper deployment of advanced technology by innovative broadband providers, and reduce competition in the multifamily broadband market.”

An FCC spokesperson declined to comment Monday.

The FCC has banned exclusive agreements, in which landlords enter into contracts granting exclusive service rights to one provider, since 2008. The commission adopted new rules in 2022 banning some kinds of revenue sharing agreements between providers and landlords and requiring that providers alert tenants if they have exclusive marketing agreements with landlords.

However, because landlords or homeowner groups can still rely on a single provider by simply not allowing others in, the FCC wants to look at requiring opt-out provisions for tenants.

The industry groups told the FCC that “apartment residents show great satisfaction with bulk broadband” and that providers often upgrade their infrastructure to result in “better, faster, cheaper, and more reliable broadband for residents” as well as “superior service quality standards that providers otherwise are not obligated to offer to individual subscribers.”

“Requiring providers to allow residents to opt out of the bulk arrangement, however, would sharply reduce their incentives for offering these benefits,” they said.

However, the industry groups’ opinion about bulk billing is not shared by all consumer groups, especially as it related to lower incomes. In a June filing, Public Knowledge said “there are valid reasons for residents to opt out of paying for unwanted service of any kind,” and by offering the ability to opt out, “the commission protects these interests.”

“Opt-out rates can be expected to be higher when the provided service is not adequate for many residents’ needs,” the group said. “For example, bulk billing by its nature prevents low-income renters from participating in a low-income plan the ISP may offer elsewhere.”

“The provider may take advantage of the lock-in and offer inferior service, higher prices, or both,” Public Knowledge said. “Or the ISP serving the building simply may not offer the package of services that the tenant wants or needs.”

Read more here.