Articles

Independent ISPs Take Aim at SF Internet Access Ordinance

The Multifamily Broadband Council contends that the ordinance, which says landlords must give Internet providers access to existing wiring in their buildings in most circumstances, is unfair.

by Dominic Fracassa, San Francisco Chronicle / March 3, 2017
Photo Courtesy of Shutterstock

(TNS) -- A national trade group has asked the Federal Communications Commission to overturn a San Francisco ordinance intended to keep landlords from interfering with their tenants’ ability to choose their Internet service provider.

The Multifamily Broadband Council contends that the ordinance, which says landlords must give Internet providers access to existing wiring in their buildings in most circumstances, is unfair because it would force smaller companies to relinquish control of their cables and other infrastructure. The council represents independent Internet providers.

Smaller providers in particular rely on their ability to assure investors and creditors they’re able to maintain exclusive and undisturbed access to their wiring. Not being able to provide those assurances puts their finances at risk and cedes a competitive advantage to larger competitors that don’t depend on third-party funding, the trade group says.

“This ordinance creates a free-for-all amongst various competing service providers,” said Bob Grosz, a council member and executive vice president of Elauwit Networks, a telecommunications provider that caters to multiunit buildings in 40 states.

“The unintended consequence is service disruption and vandalization of cable infrastructure, whether intended or unintended,” he said.

The San Francisco Board of Supervisors unanimously passed the ordinance in December. The broadband council sent a letter to supervisors in November saying that “effective competition will cease to exist” among Internet providers if the ordinance became law.

The council has one member in the Bay Area — Internet provider Satel in San Francisco — though a spokeswoman for the group said other regional providers are considering joining. The organization’s website lists more than 40 Internet providers and telecommunications companies as members, including Dish Network and DirecTV, which was bought by AT&T in 2015 for $67 billion.

Supervisor Mark Farrell, who introduced the ordinance to provide apartment dwellers with more Internet options, fired back against the broadband council Wednesday, accusing the group of using tortured logic to make a case for greater competition.

“It’s a joke. This is a shell organization for large cable companies,” Farrell said. “This unequivocally demonstrates that the large cable industry organizations are scared stiff about competing in San Francisco. They should be embarrassed.”

He added that he was “wholly confident in the legal basis for our ordinance.”

Multifamily Broadband Council President Dan Terheggen denied that his organization was advocating for major corporations.

“In terms of operators, we are all relatively small businesses,” said Terheggen, who also works as the CEO of broadband provider Consolidated Smart Systems. “We’re not a joke. The FCC doesn’t see us as a joke.”

Dish and DirecTV, Terheggen said, were “vendor” members that worked alongside the group’s core of Internet providers.

Dane Jasper, the CEO of Sonic, a Santa Rosa high-speed broadband provider that is not a Multifamily Broadband Council member, was puzzled by the group’s arguments that the ordinance will hobble regional companies like his from competing. The effect so far has been just the opposite, he said.

The ordinance, he said, is “essential for competitive access. The economic harm we suffer is if we’re not allowed to enter and service the customers who have signed up for our service.” Sonic, he said, has already benefited from the ordinance, having gained entry to apartment buildings where landlords had previously denied access.

The broadband council’s petition to the FCC, Jasper said, “just seems backward.”

The FCC, which has some authority over the cables that telecom companies use to connect customers to the Internet, is expected to review the broadband council’s petition, but it’s unclear if the agency will ultimately move to change or overturn the city’s ordinance.

©2017 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.