The latest FCC plan to boost US broadband? Prevent competition in apartment blocks

Ajit Pai turns logic on its head while doing Big Cable's bidding

America's broadband watchdog, the FCC, has unveiled its latest harebrained effort to boost the availability of internet access across the nation: restrict competition.

In a memo penned this week by the regulator's chairman Ajit Pai, the former Verizon lawyer said he would introduce a new proposal for "multiple tenant environments" or MTEs – basically apartment blocks and office buildings – that would "enable the millions of Americans who live and work in MTEs to have greater choice when it comes to broadband."

Pai also noted that the federal watchdog welcomes state and local efforts to boost competition in the ISP market. But then, in a decision that has left tech policy wonks confused and infuriated, Pai announced that the FCC would specifically target a provision by the city of San Francisco that requires the wiring in MTEs to be shared so any ISP can offer their services to occupants.

The ordinance is "not consistent with federal policy," Pai argued, calling the Californian seaside city's approach "an outlier." The ordinance was specifically designed to prevent exclusive arrangements between building owners and a single ISP but, according to Pai, is "a policy which deters broadband deployment."

What the ordinance actually deters, policy experts were quick to point out, is the ability of giants like AT&T and Comcast to carve up large markets and prevent competition. The ISPs do this by ensuring they are the only ones who supply connectivity to whole buildings, because they own the fiber and copper cabling, locking whole blocks into either Comcast, or AT&T, and so on. That oligopolistic approach has served cable companies extremely well across the United States, and has led to America receiving, on average, some of the slowest and most expensive internet access in the developed world.

Pai's argument appears to be based on the concept that it is an ISP that pays for connecting up and wiring a building and, as such, forcing the wiring to be shared with any ISP would make it less financially worthwhile for a company to connect up other buildings.

But that's not the reality, according to a slew of tech policy experts. One, San Francisco-based Josh Shrago, noted that "the majority of MTE buildings get their cabling infrastructure provided by the developer as part of the construction of the building or as part of their own development costs when they renovate, or the owner of the building itself."


Pai's argument is "utterly ridiculous," he added. That view was shared by others, one of whom called it "the most contradictory statement I have ever read in my professional career." Another called it "a petty proposition that will only interfere with deployments."

Instead, as has happened with unerring frequency in his time as FCC boss, Pai appears to be simply repeating a cable lobbyist's talking point verbatim and then making it the focus of subsequent federal policymaking.

Pai's argument directly contradicts another cable industry talking point that he has often repeated: that funding the installation of new cable in areas with poor internet speeds where there is already a provider is a waste of funds. The FCC and lawmakers had repeatedly referred to the risk of "over building" with federal funds.

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In this case, however, Pai appears to be arguing that every ISP that wants to provide internet access to a building's tenants be required to add all their own cabling: a situation that really would limit broadband deployment.

The only consistent thread in the arguments of the head of the federal regulator is whether it benefits the largest cable companies who continue to dominate the market, in large part thanks to their anti-competitive barriers.

The truth is that the largest cable companies have built their entire business models around owning or controlling the wires that lead to people's homes. That approach has been supplemented by an agreement not to compete with one another, with the companies carving up the United States, often down to the city block, in order avoid offering the competing services to individual customers.

That approach has been helped by the FCC's knowingly flawed data-gathering where it allows internet providers to say they are offering a service to an entire census block if they are in a position to offer service to even a single person within that block. That gaming of that system has enabled cable companies to point to a degree of competition on paper that does not exist in reality.


The FCC has been under fire for years for its largely worthless data, and recently Pai agreed, under significant political pressure, to revisit how the FCC put together its broadband maps. But observers expect Pai to continue to drag out any changes that would give an accurate view of the true state of broadband competition in America.

The effort by cable companies to own the wires is also playing out in the form of municipal networks where local governments pay for the installation of their own fiber network and then allow third parties to offer internet access on top of those wires. That approach has been extremely successful in both providing internet access to underserved regions and giving citizens fast access at lower prices: often charging half as much as large organizations like Comcast and AT&T. The cable companies continue to fight furiously against municipal networks.

This week's decision by the FCC to try to undermine local legislation with federal rules reflects another controversial effort by Pai to drive the installation of 5G towers at minimal cost to mobile operators. The FCC has approved a federal measure that sets a uniform fee that cities can charge for 5G towers on their property, despite many cities having already reached agreement on higher rates.

That FCC decision is currently being reviewed by the Ninth Circuit Court of Appeals, and this past week, many organizations including state and local governments and utilities have been sending briefs to the court arguing that the FCC has both overstepped its authority and risks endangering public safety.

One of the new rules places various limits on inspections, saying that it would cut through red tape. But local governments have argued that rule could undermine safety as they may not have time to conduct thorough reviews before approving co-location requests within a set deadline.

Even for Pai, however, arguing that the answer to faster broadband deployment is to undermine a rule that enforces real competition is too much. ®

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