Mark Ferrel of the Board of Supervisors for San Francisco has proposed an ordinance that would require multi-tenant buildings to provide access to broadband providers. This would apply to both residential and commercial properties.
You can understand why the city wants to tackle this issue. The nationwide percentage of families living in apartments is around 35%, but in San Francisco apartments represent 63% of housing units. And the percentage of families living in apartments is high in a lot of big cities – in New York City it’s 68%; in Seattle it’s 54%; in Atlanta it’s 56%.
Cities understand that bringing fiber to their city is not enough if it only benefits single-family homes and standalone businesses. As I wrote in a recent blog there are millions of urban households that don’t have access to broadband, and a lot of these situations are due to apartment owners that have excluded broadband providers. It’s fairly normal for apartment owners to have made deals years ago with service providers to serve their buildings on a revenue-sharing basis. The landlord may or may not include the triple-play products in the rent, but they get a kick-back from the service providers as a reward for exclusive access.
A few years back the FCC put some restrictions on cable companies and ISPs from entering into certain kinds of exclusive arrangements with building owners. It was a fairly common practice, for example, for an ISP to agree to wire a building for free, but then retain ownership of all of the wiring. In these cases the owner gave up all rights to the cable company or telco and it’s those entities that keep out competition.
I think there is a general impression that the FCC order forbade the cable companies from entering into all exclusive arrangements. But unfortunately it did not and it instead bans only certain types of arrangements – but not all. So I would expect at some point for this ordinance to be challenged at the FCC when it bumps into arrangements that are still allowed. But I think cities expect legal challenges when they tackle new ground.
This is also not going to be as clean-cut as Mr. Ferrel is hoping for. The ordinance grants access to multi-tenant buildings to any state-licensed ISP. Unfortunately, in many buildings there are physical restrictions to allowing even a second ISP. There might be very limited space for an ISP to put a rack of equipment. There are often issues with having enough space in the risers (the conduits that carry wires between floors).
And many apartments can’t accommodate having ‘open access’ where any ISP can gain access to the wiring for any unit from some central location. Unfortunately many apartments are not wired with ‘home run’ drops that go from a core to each unit, but instead often share the same cabling for multiple units.
There are often limited options for getting new wires to apartments. I can picture some really messy situations if multiple ISPs are granted access to the same buildings and each tries to string cables through hallways or other public areas. You can picture the same sort of clutter that we often see on urban poles with too many wires crammed into limited space.
But even with all of these issues, Mr. Ferrel is on the right track. The fact is that many apartment dwellers are being denied access to fast Internet due to arrangements made by the building owners. This ordinance is the first attempt I’ve seen for solving the lack of broadband and choice for a large percentage of urban households.
The ordinance tries to be fair to apartment owners and allows them to expect reasonable compensation for access to their buildings. Obviously that concept will need work to put into practice, but the ordinance doesn’t open up buildings to anybody to build without rules.
There is one thing the ordinance doesn’t tackle. What if nobody wants access to an apartment? A significant portion of urban apartments without good broadband access are low-income housing and ISPs and incumbents have been accused of redlining such customers for years. So this kind of ordinance can’t solve everything – but it’s a start.