- Older apartment buildings often struggle with internet bandwidth and maintaining device connections
- But many MDU owners don't own their building's infrastructure and are locked into legacy contracts with a service provider
- The existence of bulk billing arrangements between broadband providers and MDUs is a contentious topic
Making broadband available to the masses is no easy task in any environment. But try doing it for people living in decades-old apartment buildings.
A majority (82%) of multi-dwelling units (MDUs) over 10 years old report internet connectivity challenges, according to a recent study from Comcast’s Xfinity Communities in collaboration with Parks Associates.
Issues include maintaining device connections over a Wi-Fi network and insufficient bandwidth, which can be difficult to fix due to the infrastructure of older apartment buildings, said Jennifer Kent, VP of research at Parks Associates.
She explained that unlike newer MDUs, these buildings were built without suitable wiring or the infrastructure to run new wiring. Older MDUs may have thicker walls or various types of building materials.
There’s also the challenge of not wanting to disrupt tenants while making infrastructure improvements, said Xfinity Communities VP Ilan Eframian. That's tricky since upgrades can require spending “hours in each apartment pulling open walls and stuff.”
But modern apartment buildings have some infrastructure problems of their own, he added. For example, the glass in some of the new high-rise buildings can block radio frequency signals, resulting in “really bad cell phone quality” for residents.
Infrastructure issues particularly plague subsidized housing. According to Pew Charitable Trusts, more than half of public housing units were built before 1975, without broadband in mind. Public housing providers also can’t raise rents to cover the cost of retrofitting a building to update or install new wiring.
“HUD-assisted housing in particular often does not have enough funding for capital expenditures to address building issues that hinder broadband access,” Pew’s Kathryn de Wit noted in a blog post.
Many MDU owners don’t necessarily own the building's broadband infrastructure and they are locked into a legacy contract with the service provider that does own the wires, Kent said, making it difficult to switch to another provider.
“So they might be looking at the cost of having to run all new wire throughout the building…which is obviously very cost-intensive,” she said.
Bulk billing - Bad or good?
When talking about how to better connect MDUs, a contentious topic in the broadband industry is the existence of bulk billing arrangements.
Tenants under a bulk billing agreement are required to pay for broadband, cable or satellite service from a specific provider, even if they would prefer to use another.
Xfinity Communities serves about 250,000 properties in the U.S., from MDUs to hospitals and college dormitories. An Xfinity Communities exec told Fierce last year while some of its contracts are “bulk,” meaning Comcast is the sole Wi-Fi provider for the building, the majority of its contracts are “retail,” thus other providers offer internet to the property.
“If we’re not allowed to come in as a bulk provider because another provider doesn’t allow that, that’s fine,” Eframian said. “We’re working on ways to come in just as another retail option, as a choice option.”
The FCC in March proposed a ban on bulk billing arrangements in MDUs. A number of arguments have arisen both in favor and against the proposal.
Trade groups like ACA Connects and non-profits such as EducationSuperHighway oppose a bulk billing ban, arguing it would leave low-income housing folks without an affordable retail broadband option.
According to Kent, apartment residents that pay for internet as part of their rent or through their property manager tend to spend less than those with a retail plan. Parks Associates found MDU residents with a bulk internet arrangement pay around $40 per month, compared to $64 per month for retail internet.
Parks Associates noted these figures are “standalone” service prices, meaning these are residents who don’t have add-ons like pay TV or mobile bundled with their internet.
When considering these numbers, a bulk-billing arrangement sounds good in theory. But non-profit Public Knowledge argued these contracts don’t always end up serving consumers’ interests.
“Since landlords have no obligation to inform renters of the potential additional cost of ‘utilities’ until the point of sale, bulk billing arrangements rarely play a role in tenants’ rental decision-making,” said Public Knowledge.
The non-profit also argued that even with a discounted bulk arrangement, consumers who qualify for the government’s Lifeline subsidy or another low-cost internet program may end up paying more than they can afford for broadband.
And one final point: folks have complained to the FCC that bulk billing forces them to pay for cable TV even though they don’t watch TV, or that they already have fiber but are forced to pay for cable broadband.