MDU Internet Bulk-Billing and Exclusivity Practices Under Scrutiny

The San Francisco Board of Supervisors recently passed an ordinance requiring MDU owners to provide tenants with a choice of internet service providers. This first-in-the-nation ordinance is a direct challenge to the widespread practice where building owners offer building-wide exclusivity to internet service providers. The providers, in exchange, typically offer marketing or other fees paid back to the building owner.

The FCC addressed the issue of tenant choice in 2010. After testimony from all sides, the FCC allowed bulk billing arrangements, finding the benefits of bulk billing arrangements outweighed any potential harm. Bulk billing arrangements pool the demand for internet services to obtain front-end discounts from the internet service provider. Exclusivity, offering only one service provider’s offerings, is different. Many bulk billing arrangements became de facto exclusivity arrangements because building owners were not required to bring in additional service providers. T distinction has held until San Francisco’s action in December 2016.

Some of the arrangements that were cited as evidence of abusive practices by owners and providers, and particularly detrimental to consumers, included non-cancellation clauses and contract terms lasting 75 years. A tenant could cancel internet service, but they would be obligated to keep paying for it.  In some cases, charges were made a part of the rent or homeowner’s fees. The result was the tenants would pay even if they never installed or used the service.

Here is where Aditum is different.  Aditum can help MDU owners and managers avoid the typical bulk billing, all-or-nothing quagmire.  Aditum IMS allows you to offer many different internet service offerings for your residential and commercial tenants. Perfect for mixed commercial and residential buildings, tenants are not locked into the service offerings of the bulk provider. And at the end of the bulk provision term, because you own the cabling, a different bulk provider can be hooked up to the front end of your system.

Meanwhile, your tenants still enjoy the benefits of a bulk billing arrangement, the convenience of billing, and the ability to opt in or out. You enjoy the ability to directly monetize the internet service (no marketing fees or payments) and stay ahead of a changing consumer marketplace.

To find out more about Aditum IMS, please give us a call.

Share: