There's a rumble on the rooftop

By David Rohde
Network World, 06/28/99

Recently, many readers have written in about the controversial "rooftop rule" the government is considering.

The rooftop rule is a new local- competition proposal from the Federal Communications Commission. The FCC is considering requiring multitenant office buildings to provide space on their rooftops to new fixed-wireless local loop carriers. Those are companies such as Winstar, Teligent and Nextlink that use chunks of microwave spectrum to create connections from office building antennas to long-distance points of presence, bypassing the dominant local telcos.

So far, reader comments are running about 75% to 25% against the rooftop rule. Maybe that seems strange because the rule would purportedly help users glean carrier options more quickly. But there are some logical reasons for this reaction.

Winstar and Teligent, which have lobbied heavily for the proposal, claim many office buildings have sweetheart deals with the telcos and that building owners have demanded impossible terms to allow them access. Yet at the same time, Winstar and Teligent have been announcing deals with other building owners that they proudly tout to investors as signs of their success.

For years, landline competitive local exchange carriers (CLEC) have acknowledged that local market entry is a building-by-building slog and have not insisted that the FCC step in. Last year, leading CLEC Intermedia bought a company that specializes in shared-tenant telecom services to boost its presence in that market.

Then there's a telling statement in a building-access white paper that the Personal Communications Industry Association (PCIA), a wireless trade group, presented to the FCC. PCIA noted that telecom options are merely one among many factors that influence the signing of a long-term lease, so users might not move to a new building just to get wireless local loop. True enough.

But then PCIA added: "Small and medium-size tenants for the most part have never experienced these services, so the idea that they would, in significant numbers, break a lease [to get wireless local loop] is unreasonable." In other words, it's unfair that users can't get a service they don't even know they want yet, so the government had better act.

If the FCC buys this argument, it's coming dangerously close to something this column has noted before: confusing a real competitive barrier with somebody's marketing problem.

A couple of readers pointed out another potential problem: The FCC will have to define exactly what it means by a multitenant building. Some such buildings are owned by their primary occupant - say a regional office of a multinational manufacturer - which may rent out the remaining space to local businesses.

If the FCC multitenant rooftop rule applies to these buildings, then the FCC would be in the position of telling users which carriers they must deal with. Isn't that the opposite intent of telecom reform?