Ban on Bulk Billing Is Bad for Consumers

Moving into a rental property is always a stressful endeavor. But there is one part of heading to a new location that can save money and be done without much effort. In multi-dwelling units like apartment buildings, condominiums, and public housing, landlords and homeowner's association negotiate with internet service providers to provide the best service at the lowest cost for all residents. The only requirement upon moving in is to plug in the computer or television and download the connection to the provider.

But leave it to the bungling bureaucrats in the Biden administration's Federal Communications Commission (FCC) to try to fix something that is not broken and stick the government into the middle of this process. Every consumer knows that bulk purchasing or billing involves a competitive process so that consumers get the benefits of lower costs and better service, which is how Costco, Walmart, and other businesses are able to serve so many people. It therefore does not make sense that the FCC is proposing to ban bulk billing arrangements for broadband service in multi-dwelling units (MDU), but the agency 's decisions are now defying logic in favor of politics.

On March 5, 2024, FCC Chairwoman Jessica Rosenworcel announced that she would be circulating a notice of proposed rulemaking (NPRM) to eliminate bulk billing agreements for broadband to multi-tenant buildings, like apartments, condos, and public housing. She suggested that rather than allowing landlords to choose the provider or plan for a property, that decision should be left to the renter. She claimed that this will help consumers who live MDUs, but it will have the opposite effect, harming those who can least afford the additional costs that would occur for individual contracts with multiple service providers.

According to an April 19, 2024, ex parté filing from the No Home Left Offline Coalition, which includes the Council for Affordable and Rural Housing, the National Multifamily Housing Council, the National Apartment Association, and the Manufactured Housing Institute, this proceeding "could negatively impact the more than 11.5 million households in public or affordable housing." They also noted, "Bulk billing agreements for internet service have played a crucial role in ensuring that residents in multi-dwelling units (MDUs), particularly those in public and affordable housing who account for 20-25% of the nation's digital divide, can affordably connect to the online world. However, the recent proposal to eliminate or severely restrict bulk billing agreements threatens to disrupt this vital lifeline, potentially diminishing competition and exacerbating disparities in digital access."

Bulk billing leverages the buying power of multiple residences and reduces costs. The FCC's ban on this longstanding practice is intended to allow individual unit dwellers to set up and negotiate their own agreements with a broadband provider, which would not only complicate the process but also increase costs. For example, instead of a single modem and router for an entire building, there would need to be one for each unit. Instead of a single provider that would be able to provide service at a reduced cost, there would be multiple providers, each of which would charge individually for their own equipment, connections, and services. And getting service to fix problems in individual units would be more complicated and take longer than having a single company fix a centrally located issue that impacts multiple units.

Imagine if the government banned Amazon, BJ's, Costco, Walmart, and other companies from making bulk purchases and consumers had to negotiate directly for with Kimberly Clark for a discount on a box of tissues or Proctor and Gamble for a lower price on a tube of toothpaste. Those who the administration claims they want to help the most would the most disadvantaged with the higher prices that would be charged under such a prohibition. As the No Home Left Offline Coalition stated in its filing, the bulk billing rulemaking is in "direct opposition to the historic federal investments and resources being poured into communities of all types to bridge the digital divide" and would eliminate "a cost-effective, quick, and reliable solution to improve broadband access and adoption."

The FCC is not only defying logic and the opposition of those closest to the use of bulk billing, but also contradicting its March 2, 2010 Second Report and Order, which found that that bulk billing practices "predominately benefit consumers, through reduced rates and operational efficiencies, and by enhancing deployment of broadband." If bulk billing was prohibited, "it would be a disservice to the public interest … Based on the evidence in the record before us, we choose not to take action that would raise prices for most MDU residents who are subject to bulk billing. Accordingly, we will allow bulk billing to continue because … it has significant pro-consumer effects." At that time, the FCC was, like now, composed of three Democratic and two Republican commissioners.

The FCC's proposal to ban bulk billing is not surprising given its other destructive efforts to increase government control over the internet, like the net neutrality/Title II rulemaking and the digital discrimination regulation. Rather than closing the digital divide, the bulk billing proceeding, on top of the other two proceedings, will have the opposite effect and hurt those who most need to get online.

• broadband; bulk billing; FCC; deployment;