FCC Examines Broadband Access in Multi-Tenant Residential Buildings

The FCC in the US is taking steps to improve broadband deployment and competition in the nation’s apartment buildings, condominium complexes and office buildings (known as multiple tenant environments, or MTEs). Nearly 30% of the US population lives in condominiums and apartments, and millions more work in office buildings. The FCC is now seeking public input on additional actions it could take to accelerate the deployment of next-generation networks and services within MTEs.

In supporting research, the FCC says there is a “dearth” of empirical evidence concerning the differences in broadband subscription rates between MTE and non-MTE residents. “We use individual-level census data to analyse the differences in fixed terrestrial broadband subscription rates across occupants of MTEs and non-MTEs. We find that residential occupants of MTEs are on average slightly less likely to obtain a wireline broadband subscription than residential occupants of non-MTEs. We also evaluate the effect of state mandatory access laws on broadband subscription rates. We find that the presence of a mandatory access law is on average associated with a higher rate of terrestrial fixed broadband subscription for residential occupants of MTEs and non-MTEs. Our estimates suggest that the presence of a mandatory access law increases residential fixed terrestrial broadband subscription rates by 1.8 percentage points in MTEs after removing any potential correlation between a household’s residential and broadband access choices.”

The FCC says this finding indicates that mandatory access laws are associated, on average, with a modest increase in the supply of broadband in MTEs and hypothesises that this increase in subscription rates may be a result of a reduction in the marginal, or fixed, cost of supplying broadband or the result of increased consumer choices. The FCC also notes: “Economic theory does not have a clear-cut prediction about how mandatory access laws affect broadband subscribership. On the one hand, mandatory access laws could increase broadband adoption by prohibiting access limitation agreements between an internet service provider (ISP) and MTE owners that tend to limit consumer choice. On the other hand, mandatory access laws could decrease broadband adoption if prohibiting access limitation agreements between an ISP and the MTE landlord increase the cost of deployment or decrease the rate of return from investments in broadband infrastructure.”

Read the paper here.