The Federal Communications Commission today voted to preempt part of a San Francisco ordinance that promotes broadband competition in apartment buildings and other multi-tenant structures. But it’s not clear exactly what effect the preemption will have, because San Francisco says the FCC’s Republican majority has misinterpreted what the law does.
FCC Chairman Ajit Pai’s plan partially overturns San Francisco’s Article 52, which lets Internet service providers use the existing wiring inside multi-unit buildings even if another ISP already serves the building.
The FCC said it’s preempting the law “to the extent it requires the sharing of in-use wiring.” But Pai’s proposal admits the FCC doesn’t know whether the San Francisco law actually requires sharing of in-use wiring, which makes it difficult to understand whether the FCC preemption will change anything in practice.
San Francisco itself told the FCC that its law doesn’t apply to in-use wiring, and the law’s text never uses the phrase “in-use.” Instead, it applies to “any existing wiring,” which the FCC says could be interpreted to include wiring that’s actively being used by another ISP.
The goal of the city law is clearly to give residents the ability to switch from one ISP to another and allow whichever ISP the resident chooses to use the wire heading into that resident’s apartment unit. Statements from ISPs indicate that each ISP still has to install its own wiring in a building to connect the building to the ISP’s network but that any ISP can use the wires heading directly into each apartment unit.
While it’s unlikely that a wire heading into one apartment unit would literally be used by two ISPs at the same time, Pai’s proposal claims that ambiguity over whether the law allow simultaneous use of wires is a good enough reason to preempt the law.
As we’ve previously reported, the city ordinance applies when the inside wiring belongs to the property owner. Under the rule, property owners who have outfitted their buildings with Internet wiring cannot deny access to ISPs, making it harder for them to strike exclusive deals with Internet providers.
Pai claimed that the city’s rule “deters broadband deployment” and infringes on the FCC’s regulation of cable wiring. The Pai-led Republican majority ensured that the preemption passed with a 3-2 vote, while the FCC’s two Democrats voted against the preemption. The FCC’s decision to preempt the rule came in response to a February 2017 petition from the Multifamily Broadband Council (MBC), a trade group for ISPs that serve multi-tenant properties.
“Crazy” vote to prevent competition
Today’s FCC decision “stop[s] efforts in California designed to encourage competition in multi-tenant environments,” FCC Commissioner Jessica Rosenworcel, a Democrat, said at today’s meeting. “Specifically, we say to the city of San Francisco—where more than half of the population rents their housing, often in multi-tenant units—that they cannot encourage broadband competition. This is crazy.”
Rosenworcel pointed out that the FCC gave up its own Title II regulatory authority over broadband when it repealed net neutrality rules yet is now claiming the authority to stop local broadband regulation.
“We somehow claim we have unfettered authority when it comes to broadband in buildings but disown our general authority over the same in our net neutrality proceeding, where we pronounced broadband beyond the reach of this agency,” Rosenworcel said.
Pai said at today’s meeting that San Francisco “has had every opportunity to mount a substantive defense of an in-use wire sharing mandate and it has utterly failed to do so.”
An announcement from Pai’s office argued that “[r]equired sharing of in-use wiring deters broadband deployment, undercuts the Commission’s rules regarding control of cable wiring in residential MTEs [multi-tenant environments] and threatens the Commission’s framework to protect the technical integrity of cable systems for the benefit of viewers.”
San Francisco could appeal the preemption in court. The city could also argue that the FCC’s preemption doesn’t actually change anything, since city leaders say that the law doesn’t apply to in-use wiring.
Pelosi and SF mayor objected
The US House of Representatives already voted to block Pai’s proposal on June 26. But OKs from the Senate and President Trump are also needed to forbid the FCC from preempting San Francisco’s law.
San Francisco Mayor London Breed expressed her opposition in a letter to House Speaker Nancy Pelosi (D-Calif.) and all five FCC commissioners. San Francisco filed that letter into the FCC docket.
The city applies its wire-sharing rule to “buildings where the property owner had not allowed multiple providers,” Breed wrote.
“San Francisco adopted Article 52 because it is uneconomic and, in the case of many older buildings, impossible, for multiple carriers to install their own wiring to reach each occupant,” she wrote. “Consequently, rather than fostering competition, the Proposed Order would strip occupants of many MTEs in San Francisco of a meaningful choice of communications providers.”
Pelosi wrote a letter to Pai asking him to halt the vote.
“This proposal is deeply misguided and would undermine freedom of choice, increase costs, and reduce service quality for residents, as it puts a chilling effect on much-needed competition in the telecommunications sector,” Pelosi told Pai.
The FCC has mischaracterized Article 52, falsely claiming that it gives ISPs free access to wires, Breed wrote:
The [FCC’s] Proposed Order also suggests that this “forced sharing of in-use facilities… encourages providers to [get a] free ride on existing infrastructure rather than building their own.” In making this statement, the Proposed Order ignores clear language in Article 52 that a “property owner is entitled to just and reasonable compensation from a communications services provider.” Article 52, therefore, lowers the cost for a competitive provider to obtain access to an MTE, it does not provide a so-called “free ride.” Article 52 was developed with the active participation of AT&T, Comcast, the Chamber of Commerce, the Building Owners and Management Association, the Electronic Frontier Foundation, regional Internet service providers, and others to achieve a balanced approach.
Dispute over SF law’s wording
While the FCC said it is preempting the San Francisco law “to the extent it requires the sharing of in-use wiring,” Breed’s letter to Pelosi and the FCC said that “Article 52 does not require sharing of ‘in-use’ wiring.”
A San Francisco filing with the FCC quoted Sonic, an ISP, as saying that it is “technically infeasible for two service providers to literally share inside wire without significant degradation to both their services.” Article 52 prevents that possibility by letting property owners deny requests to share existing wiring when it would harm existing ISPs’ ability to provide service, San Francisco argued.
Monkeybrains, an ISP that relied on the law to serve buildings that previously had just one ISP, offered an explanation that seems to clear up whether “in-use” wires are being shared. Monkeybrains told the FCC the following:
As a matter of course, Monkeybrains and other ISPs always build their own infrastructure including wiring and switching to each Intermediate Distribution Frame (“IDF”) in a building, and then may make use of an existing wire from the nearest IDF to the unit. In every circumstance, we only use this existing wire when it is no longer “in-use,” or actively subscribed, by an end-user. Following the end-user’s confirmation of their intent to terminate service with their previous provider, we will plug that existing wire into our own switch in the nearest IDF.
The FCC has “contorted” the San Francisco law into a “non-existent bogeyman, suggesting that the ordinance compels sharing of wiring that is already in use,” Rosenworcel said. “This is simply not true. In fact, San Francisco has told us on the record that this is not what the law does. But even if it were true, the agency fails to determine here if such sharing would even be technically possible. All of which begs the question, why is the FCC doing this? Why are we preempting an imaginary possibility in a city ordinance in San Francisco?”
Pai accused San Francisco of playing word games, saying in today’s meeting that “it is difficult to understand how anyone can be harmed by a decision to preempt a city mandate that the city itself claims doesn’t exist.” Pai said that if the city is correct that its law doesn’t apply to in-use wiring, there’s no reason for it be concerned about the preemption.
“All of this suggests that the opposition here is driven not by the facts, not by the law, but instead by that crass impulse in politics, ‘if he’s for it, I’m against it,'” Pai said.
Pai’s proposal said the FCC doesn’t need to fully understand San Francisco’s law in order to preempt it.
“We need not definitively determine whether Article 52 requires building owners to permit the sharing of in-use wiring… the record demonstrates that the appearance alone is enough to have a significant deterrent effect on investment” and that “the ambiguity itself about whether Article 52 requires in-use wire sharing has had a chilling effect on broadband and video investment,” Pai’s proposal said.
FCC Commissioner Geoffrey Starks, a Democrat, argued that the Republican majority’s interpretation of the San Francisco law is unreasonable. Starks said:
[I]t is a fundamental canon of construction that a law should not be interpreted unfavorably where there are other interpretations that do not present a problem. The Commission seemed all too eager here to lean into a potential interpretation of San Francisco’s law that would require preemption. But a more reasonable and unproblematic interpretation exists, one which the Commission has not fully considered. San Francisco’s law prohibits property owners from refusing to allow new providers to use “any existing wiring” in a building. As the majority’s analysis admits, this language is at worst merely ambiguous and can be reasonably read to not include in-use wiring. Further, the law then proceeds to expressly permit property owners to refuse access to wiring wherever doing so would have an “adverse” effect on service. This is precisely the issue the majority argues would be caused by an in-use wire sharing requirement. Therefore, to the extent that in-use wire sharing poses any technical problems, San Francisco’s law can and should be read not to require it.