ISP Industry Warns of Bill Shock and Market Instability Without Broadband Bulk Billing

Industry representatives raised concerns about potential negative effects for consumers should the FCC adopt an NPRM Chairwoman Jessica Rosenworcel circulated among fellow commissioners last month that bans bulk billing arrangements between ISPs and multi-dwelling unit (MDU) owners (see 2403050069). "We built our business around" MDUs because "there was a gap in the marketplace" and a "demand to provide an alternative to the incumbent providers," said Pavlov Media President-MDU Bryan Rader.

The move banning bulk billing began as a White House effort that addressed junk fees for consumers, Rader noted. Yet he said that at retail "consumers would pay anywhere from $80 to $120 for an internet product that comes with fees" when "the entire point of [bulk billing] was to do away with fees," he said. Radar met recently with four commissioners' aides, as well as staff from the Wireline Bureau and Consumer and Governmental Affairs Bureau on the issue, he said.

"We don't know if [the NPRM] will be released this week or at all, but we're certainly preparing for it," Rader said, noting FCC staffers said in meetings that "one of the biggest complaints they get is that apartment residents are stuck in a bulk agreement and can't get out." The FCC lacks enough data on the types of services or providers from these complaints to support an opt-out option or ban, he said.

Blue Stream Fiber Vice President Philip Kantor warned that banning bulk billing or letting residents opt out would "cause uncertainty in the business, and it won't be good for consumers." However, Kantor said, without knowing the NPRM's details "we're not exactly certain what we're arguing against" (see 2404110049).

Hotwire Communications provides broadband, video, and voice services to residential and commercial properties "primarily through bulk billing arrangements," said Senior Vice President-Government Affairs Ross Lieberman (see 2404230061). Consumers "like it because they get the fiber services ... deeply discounted prices ... guaranteed customer service standards, as well as performance standards," Lieberman said. An FCC proposal banning bulk billing arrangements is a "misguided approach," he added.

The FCC's proposal will likely "push everyone's price up," said Dan Myers, Dojo Networks president-founder. "Allowing one or two people to opt out ... just doesn't make a lot of sense" when ISPs deploy managed Wi-Fi, Myers said, adding that this service is deployed ubiquitously throughout a property. "It's not you're turning it on in some of the units and not in some of the others," he said: "It's everywhere." Lieberman agreed. "If you're going to pass a rule that says you allow opt-out, you're essentially relegating that property back to a retail environment," which eliminates savings for residents, he said.

There are "a number of different cost savings that you get through the bulk billing arrangements that will be lost," Lieberman said: "Those costs will have to be passed along to consumers." Lieberman also raised concerns about smaller ISPs' ability to compete against incumbent providers in these buildings. "Opt-out is really sort of a big problem," he said, and "we're disappointed that this rulemaking is creating angst, confusion [and] frustration for a lot of customers today." Consumers are "fearful what this is going to do to their budgets," Lieberman added.