Extending MDU Competition

ISE Magazine article;

Exclusive contracts can lockout other broadband competitors, reduce choice for tenants and potentially lead to increased prices, not to mention exclusivity practices such as this are now banned by the FCC.   

Learn how the soon-to-be-approved FCC ruling will require that MDU owners provide tenants choices of broadband communications service providers.

Fiber Access Extension Technology May Be the Key

In recent years, the onus on delivering reliable broadband connectivity to all Americans has largely focused on connecting those living in rural areas to ultra-fast networks rather than address the issue facing many living in urban environments, who are often priced out of service. As multi-dwelling unit (MDU) occupation remains a popular choice, especially in metropolitan areas, the quest for connectivity freedom continues to accelerate. It was referenced by the Federal Communications Commission’s (FCC) Chair, Jessica Rosenworcel, that “more than one-third of the US population live in apartments, mobile home parks, condominiums and public housing”.1 As this number continues to rise, it becomes increasingly imperative that MDU residents have just as much choice in a broadband provider as those that dwell in single-family units (SFUs).

In a bid to provide this consumer freedom, the FCC recently adopted rules2 that are designed to provide tenants in apartments and office buildings with more transparency, competition, and choice for broadband services. This will open up the choice for broadband providers to empower millions of US tenants in their multi-tenant environments and reduce the barriers of broadband competition. While this may sound promising, it also brings additional challenges, and avenues for operators to explore when providing connectivity to building owners and their tenants.

Hurdles to Overcome

The process of installing connectivity and new cable routing in a high-rise MDU is significantly more complex than installations in SFUs. Naturally a MDU involves more people and gaining approval from tenants and building owners can take time, especially if anyone has any concerns. Only once this formal approval has been confirmed, can work begin on implementing brand new cabling and undertaking installation work to multiple units from the ground floor of the building upwards.3

This extensive work can present additional hurdles, with significant disruption to tenants being a potential possibility. What’s more, building owners can also be cautious about cosmetic damage and noise complaints. An MDU connectivity installation is a large-scale project for building owners with the potential costs often becoming the factor that pushes them to opt-out of replacing the existing access technology.

Ruling Realities

Although this challenges operators, the FCC’s ruling will help open up MDU tenants’ choices for Communications Service Providers (CSPs). To understand how it works, let’s dive into the FCC’s recent “Order and Declaration” ruling. To start, it prohibits providers from entering certain revenue sharing agreements with building owners, deeming them “anti-competitive and amount to de facto exclusive access agreements”. This language will enable competing operators to provide gigabit and multigigabit services at affordable pricing. Not only will this make the broadband market fairer for competing operators, it will also require increased transparency and affordability from the building owner and provider, as any pre-existing marketing arrangement will need to be expressed in “plain English” to tenants.

To expand transparency and fairness further, the FCC also banned graduated revenue sharing arrangements where the percentage of revenues shared with a building owner increases as the number of tenants subscribed to a specific CSP grows. Sale-and-leaseback arrangements where an ISP sells inside wiring to the landlord and then leases it back in an exclusive basis is another possibility. These regulations help to prevent immoral deals between building owners and operators.

Last year, the FCC investigated whether certain types of broadband agreements between building owners and providers could hamper competition. Factors included revenue sharing arrangements, exclusive wiring and marketing agreements between building owners and providers. Although this may sound appealing, it may lead to further complications in the long-term for both owner and operator, and most importantly it can be detrimental to tenant satisfaction. Exclusive contracts can lock out other broadband competitors, reduce choice for tenants and potentially lead to increased prices, not to mention exclusivity practices such as this are now banned by the FCC.

Open Markets Matter

The new regulations mean that choosing the most cost-effective, flexible, and easily deployable solution is essential for all parties. By leveraging Fiber Access Extension technology, such as InCoax Networks’ cabling connectivity, the market can be opened further for operators to utilize a cost-effective option that also offers decreased complexity. In large brownfield multi-tenant environments that have existing coaxial networks and Fiber-to-the-Building (FTTB) capability, operators now have an alternative to installing expensive and labor-intensive in-building fiber.

Fiber Access Extension technology provides symmetrical gigabit services and can be rapidly deployed. Leveraging this technology is a positive step towards increased multigigabit services for people living and working in multi-tenant environments in 2022. It empowers residents to change broadband providers quickly.

Typically, US multi-tenant environments have a home-run coaxial network reachable from the entry point located in a basement, wall cabinet or pedestal close to the building. These cables are used by cable-TV operators but can also be used by competing operators in co-existence, by deploying Fiber Access Extension nodes at the entry point.

Extending Choices

As the FCC takes a more combative approach to deals between building owners and providers that leave tenants with no or limited alternative options, now is the time for operators to utilize Fiber Access Extension technology. As a result of the new ruling and by harnessing this technology, any cost, time, or technical concerns from building owners can be eliminated, while providing the most optimal service for tenants.

Following this shake-up, broadband competition can now be extended for MDU access, therefore making the broadband market more affordable and flexible for tenants looking to weigh up their options. With Fiber Access Extension technology, both building owners and tenants can benefit in the long-term with an easily deployable and cost-effective solution that fully complies with the new FCC regulations.

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