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FCC to Update Record on Improving Competitive Broadband Access to MTEs

Posted by CommLaw | Sep 08, 2021 | 0 Comments

The Federal Communications Commission yesterday released a Public Notice asking interested parties to update the record on issues raised in a 2019 Notice of Proposed Rulemaking (NPRM) addressing broadband access to Multiple Tenant Environments (MTEs). Comments and reply comments will be due 30 days and 60 days, respectively, after the Public Notice is published in the Federal Register.

The FCC has sought to increase competition among service providers and reduce potential barriers to broadband deployment in MTEs. In particular, the FCC has prohibited service providers from contracting with MTE owners to give a service provider exclusive access to the building to offer its services. The 2019 NPRM sought comment on common practices in MTEs that could limit competition or deployment, including (1) revenue sharing agreements; (2) exclusive wiring arrangements, including sale-and-leaseback arrangements; and (3) exclusive marketing arrangements. With an updated record, the FCC hopes to better understand how it can best “facilitate enhanced deployment and greater consumer choice for Americans living and working in” MTEs.

Revenue Sharing Agreements. The Public Notice asks for updated comments on whether the FCC should restrict some or all forms of revenue sharing agreements, which are contracts between MTE owners and service providers where the owner “receives consideration from the communications provider in return for giving the provider access to the building and its tenants.” Such agreements may entail one-time payments calculated on a per-unit basis (“door fees”); pro rata payments, calculated as a portion of revenue generated from tenants' subscription service fees, which may be graduated (with the building owner receiving more revenue as the proportion of tenants in a building choose that service provider); or “above cost” payments, where MTE owners receive compensation beyond actual costs associated with the installation and maintenance of wiring.

In particular, the Public Notice asks if such agreements have proliferated since 2019; how such agreements affect tenants' ability to choose their service provider; how they impact prices tenants pay for service; whether they promote or inhibit entry by competitive providers and lead to locational monopolies; whether they are used to circumvent the prohibition on exclusive access agreements; whether only certain types of revenue sharing agreements should be addressed; how tenants would be affected by restrictions on such agreements; and whether, if the FCC does not restrict such agreements, it should require them to be disclosed.

Exclusive Wiring Arrangements. The Public Notice asks interested parties to refresh the record on whether the FCC should prohibit all or certain types of exclusive wiring arrangements, whereby service providers “enter into agreements with MTE owners under which they obtain the exclusive right to use the wiring in the building,” and asks if the FCC should revisit its 2007 conclusion that “exclusive wiring arrangements do not preclude competitive providers' access to buildings.” In particular, the Public Notice asks about the practical effects of exclusive wiring arrangements in today's communications marketplace; whether such arrangements otherwise circumvent FCC rules; and the relative benefits and anti-competitive effects or adverse impacts of such arrangements.

The Public Notice also asks about sale-and-leaseback arrangements, which “occur when a service provider sells its wiring to the MTE owner and then leases back the wiring on an exclusive basis.” FCC rules make the previous provider's inside wiring available to MTE owners and tenants for other service providers to use after it has terminated service; the Public Notice asks if sale-and-leaseback arrangements act as an end run around these rules by putting wiring ownership in the hands of the building owner, which is not subject to the rules.

Exclusive Marketing Arrangements. The Public Notice asks for updated information on exclusive marketing arrangements, whereby an MTE owner agrees to give a service provider the exclusive right to market its service to tenants of the MTE. In particular, the Public Notice asks whether such arrangements result in de facto exclusive access, for example, by creating confusion among tenants or building owners as to whether only one provider can or does offer service; what steps the FCC could take to correct possible consumer confusion; and the relevant benefits and drawbacks of exclusive marketing arrangements, particularly with respect to small competitive carriers.

Other Issues. The Public Notice also seeks to refresh the record on other issues raised in the 2019 NPRM, including whether the MTE's size should be a factor in addressing the above issues; how to define a “small” MTE; whether there are other contractual provisions and non-contractual practices that affect competition, limit tenant choice, or lead to increased prices or decreased service quality; the relative benefits and drawbacks of shared access to facilities in MTEs, including telecom closets, conduit, and wiring; and whether sharing of facilities increases competition and tenant choice in MTEs. The Public Notice also seeks further comment on mandatory access laws and other efforts to increase competitive access to MTEs and to the infrastructure within MTEs.

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