Broadband Monopolies Are Mad Because California Won’t Let Them Rip Off Apartment Dwellers

from the do-not-pass-go,-do-not-collect-$200 dept

California this week signed a new law that tries to prevent your landlord and broadband ISP from teaming up and preventing you from using broadband competitors.

Starting January 1, AB1414 requires that landlords “allow the tenant to opt out of paying for any subscription from a third-party ISP, such as through a bulk-billing arrangement, to provide service for wired Internet, cellular, or satellite service that is offered in connection with the tenancy.”

The law doesn’t ban “bulk billing,” which usually involves an ISP and a development or apartment landlord striking a deal locking you into one provider. Such models sometimes can be useful in situations where mandated usage is the only way to recoup investment into hard-to-reach areas by smaller providers. But the idea is broadly abused by monopolies trying to elbow out competitors.

California’s new law simply makes it so consumers can opt out of such deals, without retaliation from their landlords. If landlords still try to force tenants to pay for broadband they don’t want and don’t use, the tenant can subtract the cost from their monthly rent.

It needs to be clear that California’s effort is basically the bare minimum to rein in such anti-competitive relationships. So, of course, big ISPs like Comcast and AT&T are having a big hissy fit about it:

“The California Broadband & Video Association, which represents cable companies, called it “an anti-affordability bill masked as consumer protection.”

U.S. broadband monopolies should consider themselves lucky that U.S. regulators have traditionally been too corrupt to truly tackle what generally has been a much bigger problem.

For decades, U.S. broadband providers have struck cozy deals with landlords effectively elbowing out competitors and allowing them to create building-by-building broadband monopolies (in some cases even banning the advertising of a competing service inside a development or apartment). That stifled competition results in higher costs, slow speeds, and worse overall service.

And while the FCC passed rules in 2007 trying to ban the practice, they were never seriously enforced and so full of loopholes as to be effectively useless.

Susan Crawford wrote pretty much the definitive story on this at Wired in 2016, noting that the original rules were so terrible, ISPs and landlords could easily tap dance around them by simply calling what they were doing… something else:

“…The Commission has been completely out-maneuvered by the incumbents. Sure, a landlord can’t enter into an exclusive agreement granting just one ISP the right to provide Internet access service to an MDU, but a landlord can refuse to sign agreements with anyone other than Big Company X, in exchange for payments labeled in any one of a zillion ways. Exclusivity by any other name still feels just as abusive.”

Every so often the FCC tries to update the rules, but because the agency is either under the thumb of Republicans (who actively support predatory monopolization) or Democrats (who nibble around the edges with performative solutions that fail to attack or often even acknowledge monopoly power), things never really get better.

After being nagged about this for fifteen years (!), the Biden FCC finally updated the rules again in 2022. But again, the updated language still didn’t actually fix the problem, in part because the rule revisions only applied to cable and phone companies, not any of the numerous broadband-only fiber, fixed-wireless, or Wi-Fi ISPs that cut exclusivity deals directly with landlords to avoid having to compete.

Now that the Trump administration has basically lobotomized the FCC’s consumer protection authority, there’s zero chance the federal government will be enforcing any of this anytime soon. That leaves things to a small smattering of states that sporadically care about consumer protection.

You’ll find that this is going to be a common theme as a patchwork of functioning states try to step in and fill the void created by a federal government that’s actively hostile to consumer protection and corporate oversight. But in most states, companies like AT&T and Comcast literally and genuinely all-but run the state legislature. Even in “progressive” California it’s an uphill climb to get the bare minimum passed.

Filed Under: apartment buildings, broadband, bulk billing, california, competition, developments, high speed internet, landlords, tenants

Companies: at&t, cbva, comcast