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Common Misconceptions About Technology Law

Real estate developers, beware. AT&T, BellSouth, DirecTV and other telecommunications providers ("telcos") want access to your offices and homes. Telcos want to put their equipment on your property to offer cable television, telephone, and high-speed Internet services.

Many commercial buildings downtown and condominiums recently received proposals from telcos for this, but beware. The "legalese" in these proposals don't protect your rights.

Don't just sign on the dotted line. A real estate developer should provide for consumer choice while protecting consumer safety and community aesthetics. It will make your properties more valuable. It may even provide you with an extra revenue stream. Otherwise, you'll find yourself caught in a complicated mess where several telcos are fighting over limited space in your rights-of-way, conduits and molding, and on rooftops.

To plan for a multi-provider property, you'll need to consider lots of issues including safety, aesthetics, consumer choice, carrier reliability, and general engineering.

You should also look at your current communications revenue streams. Do you charge your telephone or cable television provider a fee for access to your building? Do your occupants receive discounts on services?

Who installed the wiring in your development? Who owns the wiring in your development? Do you even know? Having the answers to these questions is important if you want to get the most bang for your buck.

Traditionally, local telecommunications services have been provided almost exclusively by a single carrier. There was one telephone company and one cable television company. Now the Federal Communications Commission ("FCC") is trying to promote competition in the industry.

Recently, the FCC prohibited telcos from entering into exclusive access contracts for commercial property. An exclusive access contract would prevent a building from having more than one telco offering service to tenants. In other words, if you don't like the service from Telco A, you could go to Telco B. But if Telco A has an exclusive deal with a building, and if you don't like the service, you're outta luck.

Now, the FCC has sought comments as to whether prohibitions on exclusive access contracts in commercial settings should be extended to residential settings and whether this prohibition should be in addition to or in lieu of a nondiscriminatory access requirement.

The FCC has also sought comments on whether it should prohibit carriers from enforcing exclusive access provisions in existing contracts. In other words, the FCC is considering the possibility of "reopening" contracts that have previously been negotiated and entered into in order to allow a developer to reconsider its previous decision to grant a provider an exclusive deal.

Take a look at what companies are providing which services in your developments. Take a "telco inventory" and assess whether your tenants have choices for high speed Internet access and state of the art communications services.

Once you determine what companies are providing telco services to your property, find their contracts. Often, when you look back in your paperwork, you'll see that at one time or another, you probably signed a two or three page agreement with them.

Next, assess the condition of the facilities they installed. On some properties, you'll see that the wiring is rotted and abandoned. Other providers carefully maintain their wiring. Has a provider installed a dish on your rooftop? Have tenants installed dishes in their units? On their terraces?

If you see that the demand is there, issue a request for proposals to see what providers are willing to offer your property. If you own a building in downtown, chances are that your tenants need high speed Internet access and are willing to pay for reliability and 24x7 access. If you've developed a residential community to be inhabited by snow birds, chances are a bulk bill cable television arrangement may be right for your community.

Talk to your anchor tenants. What are the issues that they'd like your help in avoiding? Have they experienced service outages? Have their networks been hacked? For example, if you have a bank as an anchor tenant, you may need to address issues of network security in your telecom agreements. If you have a law firm as a tenant, you may need to ensure that service outages are addressed in minutes or hours, rather than days.

Have you been approached by a company that wants to put a satellite dish on your rooftop? Did you know just how valuable your rooftop space can be to a telco? Telcos are paying thousands upon thousands of dollars to ensure that they can place their reception and transmission antennas at just the right location to give them optimal service and if that location is your rooftop, make sure that you enter into a properly drafted rooftop lease for the space. (I bet you never thought of your roof as an additional revenue stream!)

Don't let yourself get locked into a dead-end telecom deal. None of us have a crystal ball that will reveal the state of the art service of the future so make sure you leave your options open.



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