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ACA Connects represents more than 500 cable and broadband operators
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Its members are concerned about a ban on bulk billing
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They say 100% penetration in an MDU makes the business model work
Members of the trade group ACA Connects are pretty concerned about the FCC’s proposal to ban bulk billing arrangements in multi-dwelling units. An ACA Connects spokesperson said yesterday that there are “more members than you might think that could be impacted by this proposal.”
In March, FCC Chairwoman Jessice Rosenworcel said she planned to introduce a Notice of Proposed Rulemaking, which if adopted by a vote of the full FCC would seek comment on actions the agency can take to encourage greater choice for tenants in apartment buildings, condos and other multi-dwelling units (MDUs).
The FCC has not yet published its Notice of Proposed Rulemaking nor scheduled it for a vote, so it’s very early days. But ACA Connects and the non-profit group EducationSuperHighway are concerned.
In a call with media yesterday, an official from ACA Connects said there’s a tendency to think of MDUs as being in more urban, densely populated environments. But he said there’s a lot of housing situations that could be affected by a ban on bulk billing, including gated communities and student housing.
“It’s a broader impact than perhaps one might think,” he said.
ACA Connects has reached out to its more than 500 small and medium-sized operator members to gauge their opinions on the issue.
“We got a pretty robust response pretty quickly,” the official said. “We heard back from several dozen members who provide service in bulk arrangements and who had pretty serious concerns with the FCC’s proposal. It can be difficult for us to get members to respond. It tells me the concerns are pretty widespread within our membership.”
He added that multiple providers say it would be chaotic to unwind existing bulk billing deals.
In the same call with media yesterday an official from the non-profit group EducationSuperHighway said a ban on broadband bulk billing arrangements could be harmful to people in low-income housing complexes.
EducationSuperHighway has a mission to close the digital divide with a focus on broadband affordability. It has already filed an ex parte with the FCC, objecting to a ban on bulk billing.
The group’s official said yesterday that people in low-income housing are already struggling financially, and there could be “unintended consequences” from a ban in bulk billing that would cause them to pay more for broadband or lose their connection altogether.
She cited housing projects such as Access Charlotte in North Carolina and Big Apple Connect in New York City, which use bulk billing to provide discounted broadband to residents.
What about competition?
Chairwoman Rosenworcel says that it’s not right for people to be forced to get their broadband from a single provider, even if they don’t want that provider. That doesn’t seem like the American way.
The officials on yesterday’s call were asked if they would support a softer, gentler ban on bulk billing that would allow people to opt out.
The ACA Connects official said its members don’t see that as a workable approach because it undermines the business model. “Getting 100% penetration helps them make the business case,” he said.
But isn't that what monopolies say?
The EducationSuperHighway official said, “Deciding to opt out presumes they can afford the market rate service that is available in their community.”
Moffett Nathanson
The analysts of Moffett Nathanson put out a report in March that mentioned the bulk billing issue.
They wrote, “At first blush, this might be seen as another regulatory risk for cable. We suspect the risk is lower than many might assume, however.”
They calculate that about 30% of cable subscribers are in MDUs, of which one-third might be covered by bulk billing agreements. If perhaps 40% of those are exclusive arrangements, then about 4% of cable subscribers would be potentially affected by the new rules.
They also point out that a lot of people would probably just stay with their current provider even if given the ability to opt out.