MDU Odd Couples

Remember the opening to the Odd Couple TV show, which asked whether two divorced men could share an apartment without driving each other crazy?

Here at the Broadband Properties Summit in Dallas today, I heard a building owner basically paraphrase that line, talking about telecom providers competing for customers in the same multidwelling unit.

This year, just as Verizon in particular is driving harder into big MDUs (expecting to have 650,000 units FiOS-ready by the end of the year) a new FCC order bans building owners from granting exclusive access to a single provider. (See Carol Wilson’s in-depth report on changes occurring in the MDU market here.)

For landlords, it’s a mixed bag. Building owners here say the biggest complaint they hear from their residents is about the lack of choice they have in a cable provider. And with competition in the building, when residents complain to landlords about shoddy service, landlords can simply say, “Go with the other guy, then.”

But having competitors duke it out under one roof can also make landlords nervous about a host of things, not least of which is the fear of one provider messing with another provider’s equipment in a wiring closet or basement. One consultant here even suggested equipment closets be fitted with surveillance cameras to deter vandalism of one competitor’s gear by another.

The FCC’s new rules also leave room for interpretation (as new rules often do), so landlords worry that they and their residents will get caught in the middle of legal battles between telcos, cable operators and satellite guys. They also have to worry about the perception among their residents about the FCC rules, which were widely hailed as having delivered choice to MDU residents. It’s not quite that simple. The rules banned exclusivity clauses in contracts, but service providers still have to negotiate with building owners for the right to access the building. So if residents mistakenly thought they could call up Verizon and order FiOS as soon as the FCC order took effect (or worse, thought they could combine Verizon’s video service with a cable telephony service), they may be directing their resentment at building owners.

Competing service providers will have to share some pretty tight quarters in the increasingly competitive MDU market. Market incentives aside, they need to work amicably together to make sure their customers don’t end up the ones being driven crazy.

E-mail me at ed.gubbins@penton.com.