MDU developers and owners know they are on frontline of the broadband revolution. During the pandemic, working from home with expansive of use of online conferencing is the new normal. With school starting across the country, online learning will place more demands on local broadband networks. E-commerce is booming as owners can attest by virtue of resident expectations for enhanced package receiving and storage capabilities. Even as the pandemic is controlled, elevated demand for higher speeds, particularly upload speeds (as compared to prior Covid-19 demand), likely will persist. Adding fuel to this fire are overpriced cable and satellite television programming packages and the popularity of online streaming services.
Owners whose properties lack adequate broadband connectivity are in an unenviable position, whether due to unavailable robust broadband service or limited property infrastructure such as inadequate risers, pathways, or lack of spare conduit to accommodate more than one service provider. Old copper telephone wire has limited utility. In some instances, a saving grace is that other multi-family property owners in the area likely suffer from the same lack of robust broadband options.
Many developers and owners are not ready to “cut the cord” on linear video, as they are not yet comfortable with providing a “streaming-only” video option for residents.[1] This is particularly true among operators of retirement communities. For new developments, retrofits, and when otherwise feasible, sophisticated MDU developers and owners are inviting multiple broadband service providers to extend their networks into their communities and offer 21 st century broadband services to their residents. [In many ways, this is the “next act” in the “play” that began 15-20 years ago when cable broadband offerings overwhelmed the local telephone companies that were wedded to DSL technology.]
Whether engaging with established triple-play providers or emerging broadband providers, developers and owners should frame their broadband strategies based on the following considerations:
a. The business and legal terms and conditions of the major service providers’ standard MDU access and marketing agreements range from unreasonable and a challenge to read to those that are reasonably balanced and comprehensible. Competitive broadband providers’ agreements tend to be balanced and readable. These providers appear focused on reducing the “friction” in implementing relationships with MDUs.
a. State and Federal laws and policies largely prohibit exclusive access arrangements, but exclusive of use of inside wiring by a single provider is the predominant regulatory policy and industry practice today.
a. Franchise cable operators typically leverage their cable franchise to provide broadband service throughout their franchise service areas.
b. Except for rural broadband services providers that are recipients of Federal USF or RUS broadband funding or similar state programs, emerging broadband providers are not obligated to extend broadband service to MDU developments.
[1] This entry is not intended to speak to the off-campus student housing segment of the MDU industry.
[2]In unserved rural markets (no broadband at 25/3 Mbps or higher or 10/1 Mbps or higher and no wireline voice), the FCC and the Rural Utility Service (RUS) of the United States Department of Agriculture are funding fiber-based and fixed wireless networks capable of providing up to 1 Gbps/500 Mbps to residential (including MDUs) and small business users. In October of this year, the FCC will make available up to $16.0 Billion over ten years for broadband deployments in unserved rural areas via a reverse auction.
