Incremental Action Foreshadows Greater Future Broadband Competition Scrutiny in Multiple Tenant Environments

On February 15, 2022, the Federal Communications Commission (FCC) released a Report and Order and Declaratory Ruling (Order) intended to promote broadband competition and benefit people living and working in apartments, condos, office buildings, and other multiple tenant environment (MTE) buildings. Specifically, the Order:

  • Adopts new rules prohibiting providers from entering into certain revenue-sharing agreements with MTE owners to evade existing FCC rules (including exclusive access agreements and exclusive and graduated revenue sharing agreements);
  • Adopts new rules requiring providers to disclose the existence of exclusive marketing arrangements with MTE owners in simple, easy-to-understand language; and
  • Clarifies, via a declaratory ruling, existing FCC rules regarding cable inside wiring prohibits “sale-and-leaseback” agreements between providers and MTE owners.

Scope

The Order (both with respect to the new rules promulgated and the declaratory ruling) is limited in scope to MTEs, defined as “commercial or residential premises such as apartment buildings, condominium buildings, shopping malls, or cooperatives that are occupied by multiple tenants.”

So, despite generally broad language, the Order does not apply to all broadband providers. Rather the FCC noted that the Order “should be read to apply only to” telecommunications carriers (common carriers) and covered multichannel video programming distributors (MVPDs), collectively “Providers,” specifically excluding broadband-only providers and “reflect[ing] an incremental approach.”

MVPDs are defined as “a person, such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming.”

Providers and MTE Owners Must Also Consider State Specific Access Rules

Notwithstanding the FCC’s actions, a review of applicable state provisions and procedure before state public utility commissions is necessary in some cases.

For example, in New York, Public Service Law (PSL) § 228 prohibits landlords from interfering with installation of cable television company equipment in a multiple dwelling unit. Even though PSL § 228 does not directly apply to broadband providers, cable providers can offer “triple play” services (broadband, TV, and phone) over a single cable and therefore seek entry even when an exclusive access agreement is entered with a broadband-only provider, which is—for the time being—not prohibited by the FCC.  Our firm has experience assisting clients with all issues related to telecommunications, including contracts concerning or related to telecommunications industry service and obtaining access in buildings or via rights-of-way.

If you have questions about the applicability of the FCC’s new rules related to MTEs, access rights for telecommunications (in a building or via rights-of-way), or wish to discuss options before the FCC take future steps and increases the scope of its rules to cover broadband-only providers, please reach out to Ivan Zajicek at 703-714-1310 or isz@commlawgroup.com.

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