It’s a Partnership, Not a Recommendation
That “preferred” status is rarely the result of your landlord testing every available service and picking the best one for you. Instead, it’s typically the outcome of a business agreement. Property management companies and building owners often partner
with a single Internet Service Provider (ISP) in exchange for financial incentives. The flyer you receive is part of an exclusive marketing arrangement. While federal rules have cracked down on some anti-competitive practices, these marketing deals are a powerful tool that steers tenants toward the building’s chosen partner, creating the illusion that there’s only one real option.
The Landlord’s Cut: Kickbacks and Revenue Sharing
Why would a landlord favor one ISP over another? The answer often comes down to money. Many agreements involve the ISP paying the building owner. In the past, this often took the form of revenue sharing, where the landlord would get a percentage of the monthly fees from every tenant who signed up. The Federal Communications Commission (FCC) took steps in 2022 to ban exclusive revenue-sharing agreements that lock out competitors. However, the legacy of these deals lingers, and ISPs still find ways to create financial incentives for property owners, ensuring they remain the most visible and easily accessible option for new tenants.
Locking Out Competition with Wiring
Sometimes, the lack of choice is physical. The first ISP to wire a building gains a massive, long-term advantage. While the FCC has banned exclusive access agreements—meaning a landlord can't legally sign a contract that says only one ISP is allowed to serve the building—the practical reality is different. If a competitor wants to offer service, it would need to install its own wiring, which is expensive and disruptive. A landlord who already has a comfortable relationship with the incumbent ISP has little incentive to approve the construction and hassle of letting a competitor in, effectively creating a monopoly by default.
The 'Amenity' That Costs You: Bulk Billing
A growing trend is the bulk billing agreement. This is where the landlord signs a building-wide contract with an ISP and includes internet service in the rent or as a mandatory monthly fee. On the surface, it seems convenient—internet that’s active the day you move in. But this practice eliminates consumer choice entirely. You can't shop for a better price, faster speeds, or a provider with better customer service. While the industry argues that buying in bulk leads to lower prices for residents, critics point out that it removes any competitive pressure for the ISP to offer better service or lower costs over time.
What the Rules Say (and Don't Say)
The FCC has made efforts to promote competition in apartment buildings, or what it calls multi-dwelling units (MDUs). Rules prohibit agreements that give one provider the exclusive right to serve a building and have clamped down on certain types of revenue sharing. ISPs with exclusive marketing rights are also required to disclose that arrangement to tenants, clarifying that other providers may be available. However, loopholes remain. Landlords aren't directly regulated by the FCC in this area and can still refuse to let other providers install wiring. And as of now, bulk billing arrangements are generally permitted, leaving millions of renters with no choice at all.
