How landlords get kickbacks to lock tenants into big Internet providers

I lived in a building that had an exclusive deal with AT&T. Problem was they were out of "connections," and couldn't hook me up. I only had my cellphone hotspot for months, until I threatened to write a letter to the FCC and CPUC about their "monopolistic" practices in my building. They got a tech out the next day.

This problem has been solved other places. For example, in Hong Kong, all operators have a statutory right of access to common areas of buildings to provision services to customers in the building.

http://www.ofca.gov.hk/filemanager/ofca/common/Industry/tele...

Incorporated Owners/Building Management: "(a) should not impose any fees, deposit, access charge, administrative charge, escort charge or rental charge on the Operators for the access of the building, the use of the common parts of the building or the use of the in-building telecommunications system of the building for the provision of services to residents or occupiers of the building (b) should not enter into any commercial contract which will unreasonably restrict the right of a resident or occupier or deprives a resident or occupier of the right, to have access to the public telecommunications services of his choice. Any such agreement is void to the extent that it imposes such restriction;"

Would be nice to see similar legislation adopted in the USA.

A client of mine in NYC was getting gouged for Internet service in their office building, by the incumbent building-wide ISP which seemed to be operated by the landlord. When it became necessary to upgrade to a higher tier of service, their only upgrade options from the incumbent provider were $1000+ per month above market rate. When we brought in service from a competing provider, we learned that we would have to pay the building's ISP a rental fee for use of the "risers"- they owned the rights to the conduit from the basement to my clients' suite, and charged us rent at what I considered an unfair rate on our use of it.

I think many landlords around here signed away rights on telecom services without knowing better, or set up exclusive agreements like this and those mentioned in the article, but this was the worst offender I've ever encountered.

My apartment in the midwest provides their own internet service, which is provided from Comcast. It's an amazing $60/mo plan for 5mb/s with a datacap of 250gb a month. I can not get "real" unlimited Comcast for $50/mo due to the exclusivity agreement...

So happy to see an article about this issue... A few months ago, while apartment hunting, I was thinking to myself, why are people accepting this?

Several apartments here in Austin, TX do this. In my search, I found the biggest offenders were Greystar and Camden properties. They lock you in to these silly "Entertainment" packages. Exclusively Time Warner, Grande, or AT&T depending on the property.

If you're already in a contract with a provider, you'd have to break your contract just to move in? That's ridiculous.

It's really unfortunate, as some of these properties are located in very desirable locations. I couldn't come to terms with being forced to use a certain provider. So I found a property in a less desirable location that offered full competition among utilities.

I don't know about internet, but I've declined to allow them to install satellite dishes. Their technicians will drill holes through your roof with reckless abandon, and the tenant won't care because they'll likely be moved out by the time the water damage really sets in from their improperly filled hole. Not to mention you can't have a one-time installation: They want to reinstall a new one every time so they can charge the tenant an installation fee.

Even if they offer the installation for free, I want their barely-trained technicians to drill holes in my property as much as a fisherman wants them to drill holes in his boat.

As a member of an HOA board with 7 builds and 13 units, is there a reasonable way to go about setting up a common conduit system so any ISP could come in? Currently only Comcast had run lines with the original building of the property and of course didn't trench properly so no other ISP could come in.

Has anyone done this before?

Google Fiber announced several months ago they were moving into my apartment complex and construction is expected to be completed with 8-12mo. In the mean time, I got a new job where I get to work from home, so I figured I probably -ought- to buy internet instead of tethering.

Shortest contract I could sign to get the advertised pricing was 3 years from the incumbent telco provider here. They offered me the "blazing" package that had a whole 10mbit upstream.

In Chicago, I'm currently living in a high rise where the fastest plan I can get is 24 Mbps for around $80/mo. My high rise has an exclusivity contract with AT&T U-Verse. I've spoken with AT&T reps and they can't offer any higher speeds. I also talked to property management and they said there's nothing they can do for me. They are locked into an exclusivity contract with AT&T for the wires in the building.

Does anyone have experience dealing with properties who claim to have exclusivity contracts? I talked to people at Webpass, and they've stated it is available in my area. They'd come in and set everything up free of charge. I don't see the downside for my building to allow Webpass to come in.

Does anyone know if any large-scale landlord is also receiving user data as well as cash from its ISPs? EULAs are broad enough to let any ISP, website or app provider to do anything with customer data that they want. Landlords could already being treated as "partners" and thus negotiating for and receiving user data in order "to offer goods and services" and "to improve the "UX". Is this a fair price to extract from a residential "captive audience?"

In most of the US, you have a choice of one or two wired broadband ISPs anyway. I imagine most renters don't care about competition, since they know they wouldn't have much of a choice no matter where they go, and if they're in an area with two choices, they're likely to be equally crappy.

ISP competition is important, but I see this as a symptom, not a cause. Fix the root problem, and people might start caring about ISP choice. Once renters care about ISP choice, big landlords will fall into line.

Not at all the same, but I'm in a house in Redwood City and it's frustrating that part of the city has broadband choice (you can get Wave/Astound OR Comcast) but my part doesn't. I don't even really understand why -- I don't get what part of the infrastructure is owned by who, how it's decided, and how to push for change.

There are local providers such as Sonic who are rolling out Gigabit in certain parts of the Bay Area, and who insist "the more people in your neighborhood that sign up, the more likely we are to bring FTTH to your neighborhood!" but there's no way of judging which one is the more "likely" bet, which is frustrating.

I wish there was someone I could just throw a couple thousand dollars at to solve the problem, but no doubt it's vastly, vastly more expensive for them than that.

> And then they’ll add little clauses saying “if any part of this agreement turns out to be illegal, you can cut out that portion of the agreement and the rest of it will stand.”

As will every attorney in the world for any contract. I don't think I've ever seen a contract without this.

Comcast does enough ridiculous and illegal stuff, we do not need to reframe standard practices as bad simply because it's Comcast that's doing it.

In Austria there's a law (might be an EU regulation) that requires the formerly state-owned phone company to rent the "last mile" cables to other companies. Made internet a lot cheaper (16Mbit ADSL costs around 25€ per month).

However, for some reason, private cable companies do not need to share their infrastructure, so if you want faster Internet you are still stuck with the local cable company.

My last apartment complex offered 100Mbit fiber for $50/month. My current apartment complex offers CenturyLink gigabit fiber. I guess I lucked out.

> For existing buildings, stop companies from being able to sign contractual provisions limiting access to inside wiring. Make it illegal for landlords to get any form of side payment whatsoever for cutting off our choice of ISPs.

Sure easy fix. Just void existing contracts that were valid when written. And this is coming from a lawyer no less.

At least in Ohio, the pricing is all the same regardless of whether or not you're in an apartment. So it's really more like you're selecting an Internet provider as a part of the renting process.

My concern with having shared utilities is you'll have to wait for some underfunded bueracracy to fix things if they break, which is likely to take even longer than Time Warner. Currently, WOW! and AT&T are actually quite quick about this where I live.

In my opinion, if you were to regulate it, it should just be to prevent the price gouging.

>And these shenanigans will only stop when cities and national leaders require that every building have neutral fiber/wireless facilities that make it easy for residents to switch services when they want to.

There is no particular reason to limit this to multi-tenant buildings or wired broadband. The problem of monopoly last mile access comes up in different contexts. The same legal solution should work for most any situation.

I've always thought it would be fairly lucrative to offer to act as an isp (w/o lock in) for an apartment complex.

A note to anyone from Webpass who might be reading this:

Please bring back the map showing the buildings where Webpass is installed...I looked recently and couldn't find it. Or, if this is too confusing now that you have many more installed buildings, please provide a list.

When I selected my last apartment, I knew I wanted to try Webpass. So I started there, pulled up the map of buildings that had it installed and limited my search to those buildings. Given how much better the service is than Comcast/AT&T, I can see a lot of people who work out of a home office wanting to do something similar.

You could even try to work with the buildings that have allowed you in to post apartment listings on your site...seems like a win-win-win (more webpass customers, faster filling of vacancies in webpass buildings, residents get better internet.)

A few years back, an Ohio blogger was complaining loudly about the practice of "slamming" utilities (among other things) by The Connor Group. The blogger got sued for defamation.

Interesting how the FCC will intercede to prevent physical gatekeeping by property owners but doesn't do much to prevent the virtual gatekeeping practiced by platform owners like Apple.

So many things wrong with this argument. The biggest mistake is the idea that there is no competition. Of course there is, the telecoms are still competing with each other to get these agreements with the landlords.

Still the renter lacks a choice right? Not so fast. If internet is so important to you, as OP tries to make the case with questionable statistics near the top, then choose a building with internet you like.

The world is not Burger King where everything is have it your way. There are a finite number of Oreo flavors and yet no one is writing blog posts demanding their congressman do something about it.

BS. Nobody is forced to live in these apartments. If you are looking to rent and this is important to you then rent someplace else.

> I live in an apartment. Chances are good that you do, too: Tens of millions of Americans live in apartment buildings, and in medium-to-large cities these structures account for between a quarter and a half of all housing units.

No, if less than half of Americans live in apartments then chances aren't good that that a random reader does.

> More people are renting these days than ever before.

Not true, according to http://www.bls.gov/opub/mlr/2016/article/the-life-of-america... (which was posted just today): 'If you were alive in 1915, chances are you rented your house or apartment; the ratio of renters to homeowners was about 4 to 1 in 1920. In contrast, by 2004, 69 percent of American families owned rather than rented their residence, although that proportion slipped to 64 percent by the fourth quarter of 2015.'

So far fewer Americans are renting than ever before.

I don't disagree that it's poor behaviour for landlords to grant monopolies to ISPs. But folks do have a choice in where they live, and it seems to me that monopoly-free units are likely to rent for more.

Ok here we go again nobody is allowed to make any money and everything is unfair and capitalism is bad and so on.

In practice if an apartment makes money by way of this "kickback" it also offsets the rent that they have to charge the tenants of that building. Similar to airlines, assuming that if one charge is reduced or eliminated it won't show up in another area (baggage fees) or in the case of a building reduced maintenance or services doesn't take into account how real businesses operate. There is nothing wrong with a business making money and in fact a business that is profitable is also good for it's customers. A business that loses money is not. The "peanut gallery" (people who write blog posts and comment on this but don't actually even own their own business) aren't in a good position to know all the ins and outs.

That said, sure some businesses rip people off (if you want to call it that) but don't assume that is the default case.

Edit: Perhaps this attorney (at Harvard no less) could write an article about the 'legal tax' on society as a result of lack of competition in the legal market. The cost to consumers for that (since it's passed along in product costs) is almost certainly way greater than whatever the 'vig' is for higher priced cable television or internet service.