In a move that has sparked both debate and concern, the Federal Communications Commission (FCC) put forth a proposal this week to reshape how broadband services are billed in multi-tenant apartment buildings.
At the heart of this proposal lies the intention to foster competition and drive down costs, yet its potential impact raises significant questions about consumer choice and affordability for people looking to save money and access high speed Internet.
The proposed rule seeks to abolish bulk billing arrangements, where tenants include the cost of broadband services in their rent or homeowner association fees. While the FCC contends that these arrangements hinder competition, evidence suggests they often result in substantial savings for residents – up to 50-60% in some cases.
Vulnerable communities, including seniors and low-income individuals, stand to bear the brunt of these changes. For many of them, bulk billing represents a lifeline to affordable broadband access. Disrupting this system could exacerbate existing disparities in internet connectivity, further marginalizing those who can least afford it and exacerbating the digital divide, which would stand against the FCC’s mission these last few years.
There’s also the broader issue of broadband deployment. By removing incentives for bulk billing, the FCC risks stifling investment in critical infrastructure, particularly in underserved rural areas.
These arrangements provide Internet Service Providers (ISPs) with the predictability needed to expand their networks, aligning with broader initiatives such as President Biden’s historic push for universal internet access. Without these incentives, deployment could be drastically delayed in underserved areas leaving consumers without reliable and competitive broadband options.
Additionally, putting a stop to bulk billing threatens to dampen competition by stripping residents and consumers of their ability to collectively achieve cost savings because of concentration of service. With such a large client base, these communities often secure better deals and guarantees, enhancing their overall broadband experience. This loss of bargaining power could undermine efforts to promote a more competitive broadband market, leading to increased prices for these consumers.
While the FCC’s proposal reflects a well-intentioned effort to promote competition and consumer choice, its potential consequences raise concerns about regulatory overreach. Rather than imposing a blanket ban, a more nuanced approach may be needed—one that targets anti-competitive behavior without jeopardizing beneficial agreements between tenants and ISPs.
As the FCC moves forward with its proposed rulemaking, it’s crucial to strike a balance between fostering competition and upholding consumer interests. Empowering consumers and promoting a diverse, competitive broadband market should remain central to the FCC’s regulatory agenda.
Elizabeth Hicks is the US Affairs Analyst at the Consumer Choice Center.
