• Telecommunications Access Issues
  • August 27, 2003
  • Law Firm: Perkins Coie LLP - Seattle Office
  • In today's era of telecommunications competition and the present trend toward mandatory access, owners of commercial or residential multitenant buildings are faced with a multitude of telecommunications options and issues. This Update will summarize some of those issues and enumerate a few suggestions to help you protect yourself.

    Issues

    1. Exclusive Deals. In 2000, the FCC issued an order barring telecommunications service providers ("TSPs") from entering into exclusive contracts for services with owners of multitenant commercial buildings. While neither the FCC nor any governmental body or court in Oregon has ruled on this matter for residential multitenant environments, the current trend is toward more, not less, competition. Prior to entering into an exclusive contract with a TSP, therefore, you should consult with an attorney to ensure that such an agreement will not put you at undue legal risk.

    2. Hot Spot Technology. One important emerging telecommunications issue is access to the Internet via "wi-fi" or "hot spot" technology. This technology uses wireless frequencies that enable your tenants to hook into their networks from up to 2,000 feet away. The downside of this technology is that these wireless frequencies (which serve remote controls, walkie-talkies, garage door openers, cordless phones, and baby monitors, to name a few) are unlicensed and are open to use by the public, with no recourse for interference by another user. If your building is located in a so-called "hot spot," you should consider updating your leases to address potential interference among your tenants.

    3. Wires. The FCC provides building owners with greater rights over telephone wires than with respect to cable wires. For example, a building owner has the right to move the demarcation point of telephone wires to the minimum point of entry within its building, but a building owner may take similar action regarding cable wires only if it reserved such right in its access agreement with the cable operator. It is important, therefore, to retain as many rights as possible regarding the wiring located in your building at the time of entering into the applicable access agreement. In addition, as mentioned below, you should make sure that your leases give you broad rights to require your tenants to remove residual wires from their premises at the end of their lease terms.

    4. Bankruptcy Implications. The boom days for TSPs are over, and the past several years have seen many of them file for bankruptcy protection. In the event of the bankruptcy of a TSP providing service to your building, it is important that you be protected from revenue losses and also that your tenants be protected from the loss of telecommunications services. We can suggest several plans of attack to help you in these goals.

    Suggestions

    • Conduct a tenant needs survey. It is always best to know in advance what your tenants expect your building to provide in terms of telecommunications technology. Conducting a survey of your tenants' needs now may prevent surprise later and will allow you to meet your tenants' needs and expectations without them having to look elsewhere.

    • Conduct a physical and legal audit of your telecom space. We recommend that you (i) have an attorney conduct an audit of all your existing leases, licenses and similar agreements to determine who has the right to use the telecommunications space in your building; and (ii) have your engineers conduct a physical audit of the space in your building available for telecommunications wires and other equipment. This will give you a broad picture of the state of telecommunications access and service in your building.

    • Don't grant an easement to a TSP. There are several ways to grant a TSP access to space in your building, including a lease, a license and an easement. While a license conveys to a TSP only a limited business right, an easement conveys a property right that gives the TSP far greater rights. It is always preferable to allow an attorney to review any documents received from a TSP prior to executing.

    • Update your leases. Make sure that you have the right to require your tenants to remove, at their cost, all wires and other network equipment from their premises at the end of their lease term. In addition, make sure that you will not become embroiled in any dispute among your tenants regarding telecommunications interference.

    Conclusion

    As we have seen in recent years, the trend toward mandatory access and greater competition among TSPs is continuing. As a building owner, you face a myriad of issues with respect to telecommunications access for your tenants. It is important to be aware of these issues and to know how to address them before they arise.