Cable Fees, Exclusive Deals Attacked as Biden Pushes Competition
Broadband Industry Faces Biden’s Revival of Detested Obama Rules
(Bloomberg) -- President Joe Biden is challenging business as usual for the broadband industry, attacking murky pricing, high fees, and landlords restricting tenants’ choice of internet service providers.
Steps outlined in a Biden executive order Friday reprise Obama administration policies that industry and Republicans have resisted or ignored, prefiguring a fight to come at the Federal Communications Commission and underscoring how hard it may be to deliver on many of Biden’s roster of changes.
A major cable group Friday called Biden’s statements “misleading,” and a group representing largest phone companies AT&T Inc. and Verizon Communications Inc. said “context and facts are largely missing” from the White House’s release outlining its broadband policies.
“All the recommendations involve policies advocated by leadership in the Obama administration but were either reversed by the Trump FCC or were not implemented,” Blair Levin, an analyst for New Street Research, said in a note Friday. Furthermore, he said, none of Biden’s recommendations can be adopted until there is a Democratic majority at the FCC -- an agency that’s currently without a permanent leader or even a nominee.
Biden called for the FCC to bar excessive termination fees and to require internet service providers to report prices and subscription rates to the agency. “Comparison shopping is hard,” posing a potential barrier to switching providers, the White House said in a document outlining the executive order.
Biden also asked the agency to revive the “Broadband Nutrition Label” that offers details of promised price and performance of internet service. The FCC and Consumer Financial Protection Bureau jointly unveiled a voluntary label in 2016.
The label has been little used, and was abandoned by the administration of Republican President Donald Trump, according to New America’s Open Technology Institute. It said labels could help shed light on “hidden fees, surprise bills, and dense contracts.”
Biden also called for restoring so-called net neutrality rules passed by Democrats during the Obama administration. The rules bar internet service providers from interfering with subscribers’ web traffic, for instance by favoring content from business partners over other services. They were gutted by a Republican FCC during the Trump administration, a development backed by the broadband industry.
The idea that providers would keep consumers from internet content is a “tired and disproven assertion,” said NCTA - The Internet & Television Association, a trade group with members including largest U.S. cable provider Comcast Corp. and No. 2 Charter Communications Inc.
“We are disappointed that the executive order rehashes misleading claims about the broadband marketplace,” the trade group said in an email. “We hope the administration will put the rhetoric aside and focus on constructive solutions.”
The administration’s policy statements read as if “exhumed from some time capsule in an alternate universe,” said Jonathan Spalter, chief executive officer of the trade group USTelecom, with members including AT&T and Verizon.
“The whiff of rate regulation referenced in the White House fact sheet is also concerning,” Spalter said in a statement. “Washington shouldn’t be setting broadband prices in a competitive market with lots of consumer choice. Government regulating prices in one of the country’s most dynamic industries is chilling and counterproductive to our shared goal of connecting everyone, everywhere.”
Levin, in his note, said Biden’s recommendations wouldn’t bring about price regulation or government-subsidized construction of competing networks.
Tenants’ Choices
Biden also called for ending exclusive deals between landlords and internet service providers that limit tenants’ choices, and are blamed by some for higher prices. An earlier FCC barred exclusive access to buildings, but advocates have said barriers remain with arrangements such as restricted access to wiring.
“Most apartment building residents already have access to two or more internet service providers,” said Kevin Donnelly, vice president, government affairs for the National Multifamily Housing Council, an apartment industry group. Where that isn’t the case “it is often due to broadband providers making the economic decision not to serve certain areas or certain properties.”
Chip Pickering, chief executive officer of the Incompas trade group that represents smaller broadband providers, said that the group is pleased Biden is taking action “to stop broadband monopolies in apartments buildings and condo complexes, where 30% of Americans live.”
In this case, implementation will fall to a Federal Communications Commission that lacks a permanent leader. The agency led by Acting Chairwoman Jessica Rosenworcel has been in a 2-to-2 tie since January when its Republican chairman left as administrations changed. Policy groups and some lawmakers have urged Biden to appoint a permanent chair and a third Democrat to create a working majority capable of advancing Democratic priorities.
The agency is independent, so Biden can lodge requests rather than commands. In practice the FCC hews closely to White House policy.
“I welcome this effort by the president to enhance competition in the American economy and in the nation’s communications sector,” Rosenworcel said in an email.
Biden’s approach is “the right agenda,” said Andrew Jay Schwartzman, senior counselor at the Benton Institute for Broadband & Society. Schwartzman singled out “his emphasis on ending landlords limiting access to a choice of internet providers and on the abusive use of early termination fees to restrict customers from switching to get a better deal.”
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