Incompas to FCC: The MTE broadband market is not healthy

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Incompas has made its case again for greater broadband choice in the multi-tenant environment (MTE) market, urging the FCC to adopt rules that would discourage anticompetitive practices.

While the FCC has banned the use of exclusive service contracts by MVPDs and service providers, Incompas said in an FCC filing (PDF) that companies have gotten around that roadblock by replacing those agreements with a series of revenue sharing and wiring exclusivity agreements with broadband providers.

In its reply comments to the FCC’s proceeding, Improving Competitive Broadband Access to Multiple Tenant Environments, Incompas pointed out that Americans living in MDUs (multi-dwelling units), or nearly 30% of the population, have fewer broadband choices than those living in single-family homes.

RELATED: Sonic says access to MDUs is critical to expanding its FTTH service footprint

Even more concerning, Incompas said, is that there are a number of providers that are not subject to the FCC’s prohibition on exclusive contracts, and they “have expanded their use of exclusive service agreements across the country.”

Incompas said in its reply comments (PDF) that the result of these arrangements is a “lack of choice for residents in these communities, leaving consumers with no option but to accept mediocre service at high prices.”

By promoting competition in MTEs, the FCC will be able meet their goal of bridging the digital divide for broadband services, the trade group said.

“Exclusivity lock-ups and kickbacks have enabled landlords and big cable and telecom companies to skirt existing FCC policy, keeping prices high and customer service low,” said Chip Pickering, CEO of Incompas. “Setting apartment consumers free is a key component of the broadband deployment agenda. We also encourage the FCC to support local communities fighting for more competition that will help bridge the digital divide and unlock fiber investment.”

The group said that the FCC should view enabling competitive providers’ access to MTEs and MDUs as “a necessary component of its larger efforts to accelerate broadband deployment.”

“Encouraging robust competition in the MTE market will ensure that consumers receive the benefits of better service, higher speeds, and lower prices from incumbents and competitors alike,” Incompas said.

To overcome the lack of broadband competition in MTEs and MDUs, Incompas suggested that the FCC could propose new rules under its section 706 authority prohibiting the use of graduated revenue sharing and wiring exclusivity agreements, and prohibit the use of bulk billing and exclusive marketing agreements that prevent new competitors from offering service in those communities.

Additionally, Incompas suggested the FCC “should also open an inquiry into the use of rooftop exclusivity agreements to determine whether such arrangements should be included in any new rules.”

One competitor that had issues with MTE and MDU access is Sonic, which provides $40 a month, 1 Gbps FTTH service in San Francisco. After Mayor Ed Lee signed off Article 52, a measure that amended how service providers can get access to these buildings, Sonic said it has been able to expand its broadband footprint in more MDUs in San Francisco.

“Competitive access to MDUs is a critical point for usand the new ordinance in San Francisco has really helped us with convincing building owners that they must allow us to serve their tenants,” said Dane Jasper, CEO and co-founder of Sonic, in an e-mail to FierceTelecom.