R Street Files Written Ex Parte to the FCC Raising Concerns about Proposed Rule on Bulk Billing

VIA ECFS

Ms. Marlene H. Dortch
Secretary
Federal Communications Commission
45 L Street NE
Washington, D.C. 20554

RE: Improving Competitive Broadband Access to Multiple Tenant Environments (GN Docket No. 17-142).

                On May 16, Jonathan Cannon, R Street Institute, and Jeffrey Westling, American Action Forum, met with Hayley Steffen, Wireline Advisor to Commissioner Anna Gomez, via videoconferencing to discuss the matter in the above-referenced docket.^[1]

                The R Street Institute is a nonpartisan think tank dedicated to free markets and limited, effective government. One of our priorities is to seek market-based solutions to address broadband challenges and to lower barriers to help Americans seize the opportunity of the digital economy and close the digital divide. We are concerned that the scope of a proposed rule could potentially exacerbate challenges to getting Americans online and staying connected.

                During this meeting, we raised our concerns with the reported proposal, specifically regarding the impact that a ban on bulk billing could have on broadband prices and how such a ban might impact consumers who benefit from such agreements. Consumers can benefit from lower prices that are possible when a broadband provider can negotiate with multi-tenant environment (MTE) owners for access to all their residents, reducing the risk of investment and increasing potential return.^[2] Further, for consumers who do not have current access to broadband, having a broadband connection ready when they move in eliminates the burden of finding service on their own—a daunting task when most of the information about service is online. As the Commission advances this proceeding, it should identify any potential harms caused by bulk billing arrangements and identify the least restrictive means to target bad actors without eliminating the benefits of the bulk billing agreements entirely.

                Further, a rule allowing consumers to opt out of bulk billing agreements could prevent such agreements at all, depending on the text of the rule. If a provider wants certainty that they will receive a return on their investment before deploying to an MTE, which allows consumers to choose not to participate increases the risk of investment. While agreements can still be beneficial for broadband providers, and many consumers will still choose to participate, the Commission should carefully consider how the value proposition for broadband providers will change. The Commission should especially consider vulnerable communities (seniors, low-income individuals, veterans, etc.) that may rely on these agreements to afford and stay connected to broadband services. Additionally, the Commission should provide opportunities for customers participating in these agreements to also participate in affordability programs including Universal Service and the Affordable Connectivity Program (or its successor).

                Finally, during the meeting, we encouraged the Commission to include questions seeking additional data about the prevalence of bulk billing agreements. We suggest the following questions be considered by the record:

• How prevalent are bulk billing agreements, and what are the demographic trends where bulk billing is more prevalent?
• Are customers overall paying more or less than they would absent bulk billing agreements?
• What is the average cost of broadband in MTEs with bulk billing agreements?
• How easy is it for customers to choose alternative residences if their current MTEs’ bulk billing agreements do not serve their needs? What other remedies do customers have?
• What would the impact be to both new and existing customers if these agreements were banned?

                Additional data will be critical in understanding the need for changes to Commission rules and the economics of broadband in these environments. To that end, we urge the Commission to consider a notice of inquiry rather than a notice of proposed rulemaking to further develop the record and address comments and concerns of relevant stakeholders.

                This notice is being filed in the above-referenced docket for inclusion in the public record in accordance with the Commission’s rules.

Respectfully Submitted,

/s/ Jonathan Myles Laurier Cannon
Jonathan Myles Laurier Cannon
Policy Counsel
R Street Institute  

/s/ Jeffrey Westing
Jeffrey Westling
Director of Technology and Innovation Policy
American Action Forum

[1] Jeffrey Westling is the Director for Technology and Innovation Policy at the American Action Forum. These comments represent the views of Jeffrey Westling and not the views of the American Action Forum, which takes no formal positions as an organization.

[2] Jeffrey Westling, “Is Bulk Billing Really Bad?,” American Action Forum, April 30, 2024. https://www.americanactionforum.org/insight/is-bulk-billing-really-bad.