San Francisco ban on exclusive ISP deals goes to FCC

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San Francisco’s open broadband access rule for apartments and condominiums will be tested at the Federal Communications Commission. As adopted by the San Francisco board of supervisors, the ordinance allows any resident of a multi-dwelling unit (MDU) to buy Internet service from any provider. The landlord or homeowner’s association has to allow access to both the building and the existing wiring inside of it. A lobbying front for companies that make a living providing exclusive broadband service to MDUs is asking the FCC to overturn the ruleArticle 52, for short – because, they say, it will result in less competition and fewer choices…

Though styled as a vehicle for promoting consumer “choice” among communications services, Article 52 in fact offers a de facto sweetheart deal to large, well-financed entities by overriding voluntary, contractual arrangements that are preconditions to the financing required for buildout by small, entrepreneurial start-ups. Typically, such providers must give their lenders indicators of likely success, such as an agreement granting the provider undisturbed use of inside wiring owned by the property owners, or a bulk billing arrangement under which the property owner purchases service and provides it as an amenity for all tenants at a steep discount off of regular retail pricing. Article 52 would effectively nullify such arrangements and afford an undue advantage to larger providers who do not need financing particularly Google, whose subsidiary Webpass was, not coincidentally, Article 52’s primary proponent—and consequently can afford to extend service to a building within Article 52’s constraints.

The FCC put the case on a fast track last week, giving the City and County of San Francisco – and anyone else who might be interested – a month to rebut (or support) the arguments made by the trade group, which is called the Multifamily Broadband Council. San Francisco’s initial response was to say that it’s exclusive deals that prevent new companies from competing and then to ask the FCC for an extra two weeks to respond.