A look at the payola deals landlords, Real Estate Investment Trusts (REITs), and developers make with ISPs
When building owners get kickbacks from big providers it's the tenants who lose — I live in an apartment. Chances are good that you do, too: Tens of millions of Americans live … Tweets: @stevenlevy Tweets: Steven Levy / @stevenlevy : Tenants screwed on internet access when landlords take kickbacks from big providers. @scrawford nails it. http://medium.com/...
Context & Ripple Effects
This Backchannel piece lands mid-arc in a pattern of building owners monetizing their control over tenants: months earlier, three of the nation's largest apartment landlords were reportedly in talks with Airbnb on a revenue-sharing partnership, showing the same playbook of charging for access to renters. The payola story extends that logic to connectivity — ISPs paying landlords, REITs, and developers for exclusive wiring rights.
It also fits telecom's documented behavior toward captive customers: The Markup later found AT&T, Verizon, and peers selling slower service at full price in lower-income, least-white neighborhoods across 38 cities, while Big Telecom lobbied to squeeze out municipal networks so federal broadband dollars flow to incumbents. Exclusive building deals are the same extraction model applied one lease at a time.
First-order effects
- Tenants in buildings with payola deals face a single or dominant ISP regardless of price or quality — the landlord's kickback, not the renter's choice, decides who wires the unit.
Second-order effects
- Competing providers are pushed into paying their own revenue-share deals to reach multi-family buildings, adding a customer-acquisition tax that gets priced into everyone's broadband bill.
Third-order effects
- Building owners harden into broadband gatekeepers, compounding the geographic discrimination already documented in incumbent pricing and leaving regulators to police exclusivity contract-by-contract rather than through competition.
The trend: Intermediaries who control access to captive audiences — landlords over renters, incumbents over underserved markets — are systematically converting that gatekeeping position into paid placement, from ISP kickbacks to algorithmic rent-setting.