Republicans call it outlier that chills investment in competition

A politically divided FCC has voted to preempt a San Francisco ordinance to the extent it allows competitors to share the in-use wiring in apartments, condos and office buildings.

Republicans argued the city had gone beyond its authority--they did not have an issue with mandated sharing of unused inside wiring. Democrats said the FCC was trying prevent competition for broadband.

The declaratory ruling on the San Francisco ordinance was part of a larger item seeking input on increasing facilities-based competition in MTEs (multiple tenant environments).

Related: FCC Says San Francisco Has Its Wires Crossed

Pai said the FCC encourages state and local efforts to promote competition, but not the "outlier" San Francisco ordinance. He said that confusion over whether the ordinance did mandate sharing of live wires has already chilled investment in broadband in the city.

Companies are less likely to invest in facilities-based service if their build-out has to be shared with competitors who did not spend to build it out.

Pai said that he would accuse opponents of the preemption--that would be the Democrats--of making a mountain out of a molehill, but that there wasn't even a molehill. 

He said San Francisco did not even weigh in on whether the ordinance allowed for sharing of unused wiring until last week, when it said it was not such a mandate, in which case Pai said there should be no opposition to the FCC's narrow ruling.

"By taking steps to ensure competitive access for broadband providers to MTEs (the inquiry portion of the item), while at the same time cracking down on local laws that go beyond the bounds of federal rules (the San Francisco declaratory ruling], our decision can help bring affordable and reliable broadband to more consumers," said commissioner Brendan Carr.

"The Commission had other options besides preemption," said Starks, who dissented from that portion of the item. "[I]t could have used the ongoing rulemaking proceeding to clarify its polices. And it could have waited to see what would happen with San Francisco’s law, in practice, in the market place, and possibly in the courts. But that’s not what we are doing today. I don’t think it is necessary or appropriate for the Commission to take this action to overrule a decision that San Francisco rightfully made for itself. Accordingly, I dissent from the Declaratory Ruling portion of this item."

Senior Democrat Jessica Rosenworcel said it was the FCC, not San Francisco, that was discouraging competition. "We stop efforts in California designed to encourage competition in multi-tenant environments. Specifically, we say to the city of San Francisco—where more than half of the population rents their housing, often in multi-tenant units—that they cannot encourage broadband competition. This is crazy."

In the Notice of Proposed Rulemaking portion of the item, the FCC seeks input on what the FCC could do to accelerate deployment of broadband in MTEs. That could include casting a critical eye on "revenue sharing agreements between building owners and broadband providers, exclusivity agreements regarding rooftop facilities, and exclusive wiring arrangements."

INCOMPAS, which represents competitive carriers and internet companies looking to get into MTE's, had called for the critical eye, and for action. 

“INCOMPAS is proud to have championed this issue for years, and pleased the FCC has launched this rulemaking process as MTE reform represents another critical element of the agency’s broadband deployment agenda," said INCOMPAS CEO Chip Pickering. "We look forward to working with our fiber member companies to build a record at the FCC that ends monopoly access and brings more choice to those living in condos and apartments.”

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