The comment period has ended for Docket 17-142, in which the FCC initiated a Notice of Proposed Rulemaking (NPRM) to bring more broadband competition to Multiple Tenant Environments (MTEs). MTEs are commercial or residential premises such as apartment buildings, condominium buildings, shopping malls, or cooperatives that are occupied by multiple entities.

Establishing broadband rules in these environments is complicated because it involves three parties—the broadband provider, the end user tenant, and the premises owner or controlling party—all of whom must take coordinated action for deployment to occur. It is also expensive for broadband providers to serve customers in MTEs. They must access building conduits, lay wire that can reach each unit in the building or premises, and make necessary repairs once the wiring is installed.

In the NPRM, the Commission sought comments about certain issues that were bound to divide broadband providers and MTE property owners. These included:

Revenue Sharing Agreements - In which the building owner receives consideration from the communications provider in return for giving the provider access to the building and its tenants.

Rooftop Antennas and Distributed Antenna Systems (DAS) Facilities Access - Wireless providers rely on access to building rooftops to establish or improve backhaul for wireless services.

Exclusive Wiring and Marketing Agreements - These agreements occur when a service provider sells its wiring to the MTE owner and then leases back the wiring on an exclusive basis.

Property owners made it clear that they believe there already is ample broadband competition in MTEs and no additional regulations are necessary. For example, in their reply comments property owners stated,

The proponents of regulation simply cannot get around the fact that apartment residents and commercial tenants have competitive choices, despite the existence of exclusive wiring, exclusive marketing and revenue sharing agreements. It is not the presence of those kinds of contracts that pose problems for new, smaller competitors, it is the presence of multiple providers in most buildings. Instead of seeking government help, providers need to build relationships with property owners and demonstrate both to owners and potential subscribers the value and reliability of their services. (Docket 17-142, Joint Reply Comments filed by the National Multifamily Housing Council, the National Apartment Association, the International Council of Shopping Centers, the Institute of Real Estate Management, the National Real Estate Investors Association, and the Real Estate Roundtable, filed September 30, 2019, at p. 3).

Broadband providers, however, believe at least some new regulations are necessary. As Sprint explained,

Unfortunately, premises owners and their DAS operator partners have leveraged their control over these public spaces to impose unreasonable terms and conditions on carriers that need to serve their customers. Venue owners enter long-term exclusive agreements with a DAS operator, typically a wireless carrier or a neutral host, who in turn imposes fees on carriers to use the facilities and pays revenue back to the venue owner. Once these deals are struck, there are no alternatives and no competition. A carrier has the choice of paying the fees to be on the DAS or have little to no service inside the venue. The need to serve their customers requires carriers to agree to these contracts despite the monopoly rents charged by the DAS owner and despite the fact that a carrier can often provide service within the venue for less money if only given the opportunity to install its own equipment. The Commission should declare that such exclusive contracts by providers within its jurisdiction are unreasonable. (Docket 17-142, Comments of Sprint Corporation, filed August 30, 2019, at pp. 1-2.)

CenturyLink pointed out three MTE trends its calls “worrisome and growing.”

Unreasonable “Pay to Play” Fees - Over the past two decades, MTE owners increasingly have sought to “monetize” access to their property by imposing excessive access fees of various forms, including through “door fees” and revenue sharing arrangements. These fees often significantly exceed the MTE owner’s cost of accommodating service providers’ access to the property, can account for 20 to 30% of the cost of extending service to a customer in an MTE, and sometimes cause CenturyLink to reject MTE tenants’ request for service.

Misinformed MTE Owners and Tenants - Both MTE owners and tenants frequently are misinformed about the nature of the MTE owner’s preferred provider arrangement. It is not uncommon for CenturyLink to be told by an MTE owner that its preferred provider arrangement precludes CenturyLink from providing facilities-based service in the MTE.

De Facto Exclusive Access Arrangements - CenturyLink also has seen an uptick, especially in shopping malls, of MTE owners refusing to allow CenturyLink to fulfill requests for service in the MTE except through a wholesale arrangement with the property owner’s preferred provider. In some cases, the mall owner appears to have delegated all telecommunications issues in the mall to the preferred provider, ii including requests for access from other providers. Whether called exclusive wiring or marketing arrangements, revenue sharing arrangements, or something else, these are in effect exclusive access arrangements, because they limit on-net access to the MTE to that preferred provider. (Docket 17-142, Comments of CenturyLink, filed August 30, 2019, Executive Summary pp. i-ii, emphasis added.).

Now the industry must wait for the FCC to act. We agree with providers that rules to eliminate the impact of exclusivity agreements are necessary to bring more broadband competition to MTEs. A trip to apartment buildings in most cities would demonstrate the lack of broadband choices too many residents have. It is worse in many rural areas. Hopefully, the Commission will act quickly.