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Telecommunications

Bundled Telecommunications is a new profit center for landlords in multifamily properties.  Is it legal?

What is Bundled Telecommunications

Three forms:
  • included in the rent or 
  • mandatory surcharge to rent
  • management promotion

Is it legal?
Not clear

Is it fair?
No. Tenants in developments that restrict telecommunications either by barring competing services or by bundling payments to the chosen telecommunication in the rent are restricting tenants choice of services...or the choice to have no service.
No. Owners get a kickback for delivering you household to a chosen provider and/or owners can pocket the difference between retail service (what they charge you) and wholesale service (what they pay for providing bulk customers,)

What about Bulk purchase discounts?
     From time to time RHINO hears about plans where tenants are asked to sign up for a particular telecommunications provider and, in exchange, they receive the benefit of the bulk discount. 
     Since the benefits of bulk purchase are shared, bulk purchase discounts can benefit tenants, but there's still an issue of choice of service. Bulk purchase plans must permit tenants to choose a different provider.


 
What 's News?

Internet competition in multifamily complexes 
    Ars Technica reports that the FCC is considering ways to open up internet competition in multifamily apartments. This could help tenants argue for access to cheaper alternatives to current "sweet heart deals" between property owners/managers and service providers. 
     From the article: "Exclusive deals between broadband providers and landlords have long been a problem for Internet users, despite rules that are supposed to prevent or at least limit such arrangements. The Federal Communications Commission is starting to ask questions about whether it can do more to stop deals that impede broadband competition inside apartment and condominium buildings. FCC Chairman Ajit Pai yesterday released a draft Notice of Inquiry (NOI) that seeks public comment “on ways to facilitate greater consumer choice and to enhance broadband deployment in multiple tenant environments (MTEs). The commission is scheduled to vote on the NOI at its June 22 meeting, and it would then take public comments before deciding whether to issue new rules or take any other action."

"Dear Landlord: Don’t Rip Me Off When it Comes To Internet Access"
     Susan Crawford writes in Backchannel "When building owners get kickbacks from big providers it’s the tenants who lose" in a story about how apartment owners cut deals for exclusive service from cable companies and internet providers.      
Ms. Crawford's story outlines many of the ways that property owners and internet providers collude to jack up prices and prevent competition in order to circumvent FCC rules. Techniques include: "door fees," exclusive marketing, deeding inside the internet wiring to the building owner.
     From the article "Network operators like Comcast, Time Warner Cable, and AT&T, in cahoots with developers and landlords, routinely use a breathtaking array of kickbacks, lawyerly games of Twister, blunt threats, and downright illegal activities to lock up buildings in exclusive arrangements."
     Professor Crawford (Harvard Law School) says "...these shenanigans will only stop when cities and national leaders require that every building have neutral fiber/wireless facilities that make it easy for residents to switch services when they want to. We’ve got to take landlords out of the equation — all they’re doing is looking for payments...."
     RHINO asks: What about the Federal Trade Commission opening an investigation of these unfair trade practices? What about giving the FCC some "teeth" to enforce the principle of free choice of telecommunications provider.


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