ISP Competition in MDU Market Achieving Equal Affordable

ISP Competition in MDU Market Achieving Equal, Affordable Access to High Speed Broadband Services for All CTAB March 13, 2018.

Franchised Cable Operators in Seattle Add text. All able to provide customers Broadband speeds in excess of 100 Mbps CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 2

MDU ISP Choices Increasing CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 3

Why did City undertake this project? • About 50% of Seattle residents live in MDUs • City wanted to determine if MDU residents have same level of access to competitive 100 Mbps broadband services as do residents of single family homes. • If the answer is “No”, then quantify extent of the problem and work with stakeholders to develop solutions. CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 4

Research Conducted • Statistically valid written and telephone survey • Interviews with ISPs • Interviews with Property owners and managers CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 5

What we learned ? Significant Lack of Competitive Choice in MDUs Compared to Single Family Homes in terms of access to 100 Mbps+ broadband providers Add text. City of Seattle research indicates about 20% of Seattle MDU residents have a choice among ISPs that can provide 100 Mbps or more CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 6

What we learned (cont. ) • 88% of MDU residents say its important to have a choice among providers. • 91% of MDU residents have some level of internet service. • 68% have some choice in internet providers but only about 20% have choice among providers with 100 Mbps service • Internet-only most common subscription (35%) followed by pay TV and internet bundle (24%). • 20% of residents subscriber to voice, internet and pay TV • 97% of HH with >$40 k income get internet; only 73% of HH < $40 k • Average cost for Internet-only is $62/mo • A variety of barriers limit competition in The MDU market CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 7

MDU High-Speed Internet Access for Owners and Managers of Multi-family Housing ISSUES IN THE SEATTLE MDU MARKET Rita Bellitto, Seattle Cable Office

ONLY ONE PROVIDER SERVES AN AREA • In some parts of the City, only one hard-wired ISP is present • The hard-wired ISPs are starting to overlap boundaries • Fixed wireless options are becoming available • With the start of 5 G technology, more options may become available

INTERNAL WIRING IN OLDER BUILDINGS • CAT 3 wiring is insufficient to carry highspeed broadband • Building owners are unwilling to upgrade internal wiring • Providers are unwilling to re-wire, it is not cost effective

SHARING ACCESS TO COMMON TELECOMMUNICATION ROOM • Each ISP needs access to and space in the CTR • Limited room can cause problems in some instances

EXCLUSIVE BUSINESS AGREEMENTS • We have heard anecdotally about exclusive agreements between a property owner and one ISP • Marketing agreement or access agreement

NEED FOR TRAINING Property owners and managers could benefit from a better understanding of : • Building improvements that can improve access by ISPs • Negotiating beneficial terms in an access agreement with ISPs

INTERNET ACCESS FOR LOW-INCOME HOUSEHOLDS • Low-income households are much less likely to have internet service • Seattle IT’s Digital Engagement Group is working on a number of fronts to increase use of the internet in low-income households.

Potential Next Steps and Policy Directions Barrier Solution – City Recommendation Ensuring service from street to the telecom closet Only one provider serves the area - Solution – City Mandate Building code requirement for sufficient conduit to property line Identify incentives for providers to expand Explore fixed wireless ISP options Antiquated interior wiring Develop a program to promote incentives for owners to Building code requirement for substantial upgrade the interior wiring of their buildings remodels to upgrade interior infrastructure (wiring, telecom closets, risers) to accommodate multiple service providers to serve each individual unit in the building at 1 Gbps speed Building manager/owner lacks knowledge on access agreement terms and negotiations Different wiring schemes from each provider yields confusion and conflicts Bulk agreements Exclusive marketing arrangements Limited sharing of access to the telecom closet inside the building Conditions in new buildings training Facilitate development of a common set of infrastructure requirements that would be acceptable to most providers Establish City Preferred Best Practices that exclude bulk agreements Establish City Preferred Best Practices that exclude exclusive marketing arrangements Mayor’s Broadband-Ready Certification - a voluntary certification program like Boston’s Building code requirement for new construction to include infrastructure from the street to the building and inside the building that would accommodate multiple service providers to serve each individual unit in the building at 1 Gbps speed CITY OF SEATTLE | INFORMATION TECHNOLOGY Establish ban on bulk agreements Establish ban on exclusive marketing arrangements Presentation title 3/13/2018 15

QUESTIONS? Contact information Tony Perez, tony. perez@seattle. gov Jim Loter, jim. loter@seattle. gov Office of Cable Communications www. seattle. gov/cable CITY OF SEATTLE | INFORMATION TECHNOLOGY Presentation title 3/13/2018 16