Broadband Communities

NOV-DEC 2016

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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90 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | NOVEMBER/DECEMBER 2016 INDUSTRY ANALYSIS Internet Choice in Apartment Buildings San Francisco just enacted legislative changes to increase apartment dwellers' choices of internet providers. Unfortunately, this type of ordinance is likely to give renters fewer choices rather than more. By Carl E. Kandutsch / Kandutsch Law Office I n October 2016, Mark Farrell, a member of the San Francisco Board of Supervisors, proposed an ordinance called "Choice of Communications Services Providers in Multiple Occupancy Buildings." e ordinance, which was passed in December 2016, is intended to increase resident choice, and many broadband activists, in San Francisco and beyond, have welcomed and supported it. e purpose of such initiatives is laudable. It is undeniable that some owners of multiple- dwelling-unit buildings 1 (MDUs), for the primary purpose of lining their pockets, have historically made – and still make – access deals with cable and broadband service providers that restrict or foreclose the entry of competing service providers. e result is that residents have fewer cable and broadband service provider options than their neighbors who live in single- family homes. It is also true, however, that many property owners already recognize that over the long term, providing residents with choice adds more value to a multifamily real estate asset than can possibly be generated by way of service provider door fees. Nonetheless, I strongly believe that the ordinance will have exactly the opposite of its intended effect. In particular, the ordinance will effectively reduce rather than increase competition by forcing smaller competitive service providers out of markets within its jurisdiction, lower the quality of broadband services and technology available to MDU residents, reduce the incentives for investment by both MDU owners and service providers in advanced broadband infrastructure such as fiber to the unit, and have a disproportionately negative and discriminatory impact on residents of shared living properties (including students, the elderly and the infirm) and on lower-income people generally. BACKGROUND AND CONTEXT e San Francisco ordinance is loosely based on "mandatory access" laws for cable television services that are currently on the books in 19 states as well as numerous localities. Mandatory access laws prohibit a landlord from interfering with the right of an MDU tenant to receive cable television service from a service provider that holds a cable franchise in the applicable area. However, the San Francisco ordinance goes considerably further. For one thing, it applies to not just to franchised cable operators but also to any "communications services provider" that is licensed to provide communications (including broadband) services within the state of California. In addition, the drafters of the ordinance recognize that in general, cable mandatory

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