Democrat Adelstein Taking on Democrat Rosenworcel’s Bulk Billing Ban

bulk billing

Said opt-out requirement was as good as a ban ‘because bulk discounts are only possible if providers can commit to 100% penetration.’

Ted Hearn Democrat Adelstein Taking on Democrat Rosenworcel's Bulk Billing Ban Photo of Jonathan Adelstein from Digital Infrastructure Investment 2023

WASHINGTON, June 30, 2024 – FCC Chairwoman Jessica Rosenworcel’s plan to ban bulk billing of Internet access services in condos and apartments is short at least one FCC Democratic Commissioner. 

In this case, the Democrat is former FCC Commissioner Jonathan Adelstein, who serves as a director of OpticalTel, a portfolio company of DigitalBridge Group Inc. OpticalTel’s business model has focused on the multiple dwelling unit market.

Since late March, Adelstein has held six meetings with several senior FCC staff members and with one FCC Commissioner in support of alternatives to Rosenworcel’s outright ban.

Rosenworcel has also advocated for giving tenants and renters the ability to opt out of bulk deals and find their own Internet Service Provider without having to pay twice. In his advocacy – which has included two visits with FCC Democrat Anna Gomez, the second on June 26 ­- Adelstein explained that an opt-out requirement was as good as a ban “because bulk discounts are only possible if providers can commit to 100% [multitenant environment] penetration.” 

A bulk billing ban, he added, would mean giving up “rates that are less than a third of the retail rate charged by other providers” and would affect many residents who are “low-income, elderly individuals, or students.” 

Adelstein served on the FCC from 2002 to 2009 under Republican Chairmen Michael Powell and Kevin Martin. Before joining the FCC, Adelstein was a senior legislative aide to then-Senate Majority Leader Tom Daschle, D-S.D, where he advised Sen. Daschle on telecommunications, financial services, housing, transportation and other key issues.

Rosenworcel unveiled her plan in March, saying residents in apartments, condos, public housing, and other multi-tenant buildings would experience greater choice and competition if they were no longer saddled with unwanted costs

The push back has been stiff. Hotwire Communications CEO Kristin Johnson met personally with Rosenworcel to convey her concerns. In letters and comments, other groups, such as the National Multifamily Housing Council and National Apartment Association have called on Rosenworcel to reconsider. So has the Education Superhighway, a non-profit with the mission to close the digital divide for millions of households that have access to the Internet but can’t afford to connect.

Rosenworcel’s supporters have indicated that landlords have been been marking up bulk deals and banking the money and that residents had trouble applying their $30 monthly Affordable Connectivity Program discount to their bulk billing charge. One ISP, Colorado-based Intrepid Fiber Networks, told the FCC that bulk billing deals have locked them out from competing in apartment buildings. 

Headquartered in South Florida, OpticalTel provides video, broadband, and telecommunications to gated communities, condominiums, and apartments.

In his recent meeting with Gomez, Adelstein proposed alternatives to Rosenworcel’s plan, including:

  • Allowing a simple majority or a supermajority of tenants or residents to vote to approve a bulk deal with no opt-out, thereby “preventing a small minority or even a single dissenter from forcing the entire community to pay higher prices”;
  • Permitting bulk deals if the result of a competitive bidding process where multiple bids are solicited and the winner’s product and pricing results in material benefits to residents compared to that available from retail service providers; and
  • Banning opt-out if a service offering met minimum quality of service criteria, such as above-average download and upload speeds.

Adelstein also said the FCC could explore whether to prohibit “landlords, homeowners associations or condominium associations from marking up the bulk billed price charged by the service provider.