The Federal Communications Commission (FCC) continues to scrutinize housing providers’ partnership agreements with broadband service providers. These efforts are intended to expand renters’ access to quality, affordable internet and promote competition.
FCC Plans to Ban Bulk Billing
On March 5, 2024, the White House highlighted the FCC’s forthcoming rulemaking which will ban bulk billing agreements in an announcement about new agency actions “to Lower Costs for Americans by Fighting Corporate Rip-Offs”. The White House characterizes these arrangements as efforts to “limit consumer choice by preventing tenants from choosing the services at the price point and level that are best for their needs” and alleges housing providers impose related “fees for unnecessary services and deter competition”. Read the FCC’s press release.
The proposed rule is expected to ban bulk billing arrangements that require residents to pay for broadband, cable and satellite service provided by a specific communications provider, even if they do not wish to take the service or would prefer to use another provider. It also will allow a resident to opt-out of bulk billing arrangements and target other arrangements between housing providers and broadband service providers, including exclusive wiring arrangements, exclusive marketing arrangements and certain revenue-sharing agreements.
The National Apartment Association (NAA) will submit comments and urge our affiliate and member partners to join us. NAA will continue our federal advocacy efforts to discourage the Administration from this approach to expand internet access across communities and promote competition in the market.
FCC’s Digital Discrimination Rule Effective March 22
On March 22, 2024, the Federal Communications Commission’s (FCC) Digital Discrimination Rule will take effect. According to the rule, rental housing providers may now be held liable for business practices that have an unlawful discriminatory effect or disparate impact on residents’ access to “broadband internet access service based on their income level, race, ethnicity, color, religion, or national origin.”
Originally, Congress authorized the FCC to define and act to prevent digital discrimination as part of the Infrastructure Investment and Jobs Act (IIJA), applicable to telecommunication providers, but the FCC adopted a rule that applies to any entity or person that could affect consumer access to broadband internet services which could include rental housing providers.
Significantly, the FCC’s rule is expansive and generally requires “no discrimination” in broadband internet access with vague indications of safe ground for compliance purposes. Moreover, the rule sets forth a broader “disparate impact” approach to establishing liability, where the FCC would simply need to show that discriminatory effects are realized even in the absence of discriminatory intent.
NAA engaged extensively on this proposal since its inception and joined in the submission of three industry comments throughout the rulemaking process: (1) Reply Comment to Notice of Inquiry June 2022, (2) FCC Digital Discrimination Comment Feb. 2023 and (3) Reply Comment April 2023 raising objections to rental housing providers being subject to significant regulatory overreach by the Commission. NAA held additional meetings with FCC Commissioners and staff to reinforce industry concerns relating to this rule (see our letter). We also worked with our partners to amplify industry concerns with Congress identifying exactly why the FCC’s proposed rule on digital discrimination inappropriately applies to rental housing providers.
NAA is also filing an amicus brief supporting the US Chamber of Commerce’s challenge to the FCC’s recent final rule on digital discrimination. The Chamber’s petition was one of several challenges to the FCC’s final rule, all of which are now consolidated in the Court of Appeals for the Eighth Circuit.
As housing providers begin planning measures to ensure compliance, it is important to keep timing in mind. The FCC will not be initiating any enforcement actions until six months after the new Digital Discrimination Rule takes effect. NAA will be back in touch to close the loop closer to the compliance deadline to assist affiliates and members in better understanding their new compliance duties.
What’s next?
These rulemakings build upon the FCC’s efforts to interfere with myriad commercial activities between housing providers and broadband service providers, with no acknowledgement of the value of these arrangements for both housing providers and renters or the infrastructure limitations of rental communities that make it impossible for housing providers to offer residents any and all available internet service options. NAA is committed to continue pursuing all options available to reduce the FCC’s activities’ impact on rental housing providers and their partnerships with broadband providers.
To learn more, please contact Joe Riter, NAA’s Senior Manager, Public Policy.