The FCC Might Let Seven People Ruin A Whole Market

By James Erwin

The Biden Administration, in a sign of its total capture by the interests of the affluent upper middle class, continues its war on so-called “junk fees,” minor expenses that people with disposable income find annoying. Ever the dutiful foot-soldier, FCC Chairwoman Jessica Rosenworcel announced her contribution in early March: an effort to ban bulk billing arrangements between multi-tenant dwellings and ISPs. The FCC is undertaking this effort at the behest of seven consumers who have complained about specific bulk billing arrangements.

You read that correctly. A grand total of seven (7) individuals have complained to the FCC through their online portal about bulk billing arrangements in the past 15 months. Complaints were even more infrequent before that. This is the basis for the FCC seeking to outlaw a very common business practice that benefits consumers and with which most tenants are satisfied.

Bulk billing arrangements are quite simply when an apartment building or other multi-tenant dwelling (such as a retirement community) contracts with an ISP on behalf of all its tenants, charging them each one flat rate for standard service instead of each tenant buying their own internet or cable service. This allows tenants to achieve an economy of scale and stability in payments that can result in steep discounts, as several commenters on the record have noted. ISPs commenting on the proceeding warn that prices for bulk-billed dwellings could increase by 50-60% if the practice is outlawed.

While the complaints largely focused on the lack of choice tenants enjoy in buildings under these arrangements, no one is required to live in a building that enters such an arrangement, and they are not especially common. Residences where the customer pays directly at a steeper rate are more abundant than bulk-billed addresses. Additionally, tenants on a fixed income, like seniors in retirement communities, benefit immensely from the cheaper rate for standard service. Poorer tenants of rent-controlled or Section 8 buildings, who are disproportionately minorities and new immigrants, also benefit from cheaper broadband. At a time when the Biden Administration is working so hard to close the digital divide, why would they outlaw a practice that makes broadband internet more affordable?

Making this all the more absurd, the FCC was also flirting with banning usage-based billing last summer, which we covered here. This practice allows ISPs to charge hyper-specific rates for use of service, the exact opposite of a standard rate for standard service one gets under bulk billing arrangements. One is reminded of Fred Armisen’s Venezuelan apparatchik from Parks and Recreation: charge a standard rate, jail. Charge a specific rate, also jail. The FCC seems determined to micromanage exactly what rates are charged under what conditions.

Despite these issues and the tiny constituency of complainants, Rosenworcel announced a Notice of Proposed Rulemaking (NPRM) on March 5 to address this non-problem. Comments can be submitted here. If you live in a bulk-billed residence, your time would be well spent weighing in against this heavy-handed regulation.