Data Overload! The Latest Developments in Telecom Policy Matter for Apartments

By Betsy Feigin Befus, General Counsel, National Multifamily Housing Council

Despite making front page news, practical takeaways in telecommunications policy on big issues such as net neutrality, municipal broadband and more aren’t always easy to discern. Nevertheless, they are important to understand because securing advantageous agreements with providers for voice, video and data service is more important than ever to attract residents and run your portfolio. Let’s cut through the legal complexities and politics to what matters for the apartment industry.

Geeks in Washington, D.C., are hot and heavy over an abundance of telecommunications-related policy news that rivals the expansion of the Internet itself. For starters, and finishers—owing to its noteworthy ability to regularly light the Twittersphere afire and capture the attention of technocrats and ordinary people alike—the Federal Communications Commission (FCC) has produced enough pages of regulatory text in recent months to earn an award for government productivity. The Republican-controlled Congress has tried to get into the act, too, but substantive disagreements and political dynamics have stalled that effort.

What’s the deal?

Apartment firms say residents and prospects will not sign a lease, or renew one, without access to robust broadband. Not only is reliable Internet access a must, residents want a choice in providers.

Corporate and community operations also hinge on dependable Internet service. From online marketing and leasing to revenue management software and on-site amenities, the apartment industry needs high-capacity connectivity. Some apartment owners are investing in “technology rehabs” to meet resident expectations and operational needs.

Bottom line? Broadband—the contemporary term for high-speed Internet access—matters. According to the Nielsen Technology Sentiments Report, nearly 80 percent of survey participants are online at least six hours each week, with 35 percent online for 21 hours or more on a weekly basis. Half used their home Wi-Fi connection within a day of the survey. But the FCC says deployment in the United States isn’t keeping pace with technology, leaving consumers and businesses wanting more.

Emphasizing the need for speed, the FCC recently bumped up the minimum qualifying speed for broadband, creating a new benchmark for gauging broadband availability. Under the newly adopted definition, 55 million Americans—17 percent of the population—lack access.

Does it really matter whether a government agency changed the regulatory definition for broadband? Yes. First, it incentivizes providers to improve speed for more consumers. A higher benchmark also helps the FCC to take action intended to encourage market entry of new competitors for the benefit of consumers.

The FCC recently allowed local governments in North Carolina and Tennessee to offer broadband by preempting statutes in those states prohibiting municipalities from operating their own networks. Although municipal broadband is unlikely to become a significant market factor nationwide, the FCC has opened the door to the possibility of government providers in the 20 or so states with statutes prohibiting such service.

Recent FCC action also offers a warning to apartment communities with Wi-Fi networks against interfering with personal Wi-Fi networks or “hotspots.”  Specifically, the Commission fined a hotel for blocking signals and “jamming” personal Wi-Fi access, noting that this was not only an inconvenience for guests, but a safety issue if first responders are impacted. The FCC has not specifically addressed whether apartments are covered, but fines up to $112,500 for a single act and imprisonment are worth noting.

Broadband isn’t the only connection that matters. More than two out of five households rely solely on wireless phones, highlighting the mobile proliferation in our lives, but also emphasizing the need to ensure connectivity, especially during emergencies. About 70 percent of 911 calls are placed from wireless phones, according to the FCC, and most of them are from indoor locations including apartments.

It may be surprising in the Uber era, but technical challenges still make it difficult to determine the location of a wireless phone during an emergency. Apartment communities could benefit from a unanimous, bipartisan effort that would help emergency responders find the location of an indoor 911 caller when they use a wireless phone. Based on a roadmap by the major wireless providers and national public safety organizations, dispatchers will soon have detailed location information that would help find an apartment resident or associate, especially in a building with multiple floors.

And then there is the issue that has garnered the most media attention lately—net neutrality.  The FCC released its net neutrality regulations two weeks after a historic 3-2 party line vote approving a plan to “protect and promote an Open Internet.” Despite being hundreds of pages long, the FCC leaves much for interpretation going forward, if the regulations aren’t challenged and put on hold.

The regulations prohibit paid prioritization for Internet traffic and reinstate anti-blocking and throttling rules to protect a level playing field for online content that were stricken by a court during a legal challenge to previous regulations. Congressional Republicans have sharply criticized the FCC and Internet providers have also opposed the action. A lawsuit to block the rules is expected.

Legal savvy pays off

Every apartment community is different, and telecommunications services are no exception. Apartment firms are encouraged to consider the latest national policy developments along with unique market dynamics across your portfolio. Managing agreements for services requires the expertise of an experienced, business-minded attorney attuned to your objectives on a property-by-property basis.

Betsy Feigin Befus is general counsel for the Washington, D.C.-based National Multifamily Housing Council.