Real estate groups propose model carrier/building contract

The touchy issue of contracts between competitive carriers and commercial building owners is back on the table, thanks to a new "Model License Agreement" proposed by the real estate industry.

Building contracts have been a hotly contested issue the last couple of years because of two key developments. The first was the rise of fixed-wireless carriers, who needed access to building risers and rooftops and felt some commercial landlords were shutting them out. The second was the rise of building-owned service providers - the building local exchange carriers, or BLECs - who were accused of getting sweetheart deals from real estate owners to install equipment and market their services to tenants.

The Federal Communications Commission tentatively resolved the matter in October with something of a compromise. On the one hand, the FCC barred all carriers, including BLECs, from signing entirely exclusive deals with building owners. On the other hand, the FCC declined to establish rules under which building owners would have to take in all carriers who wanted to serve each building under equivalent terms and conditions. To oversimplify, the FCC told building owners: Show us that tenants have the choice of two or three carriers on your terms, and we won't force you to open your building to five or 10 carriers on our terms.

But the FCC also warned the real estate industry that it would continue to monitor the development of competitive in-building telecom services and reconsider those stiffer rules if warranted. The real estate industry last week responded to this challenge with a Model License Agreement that it claims guarantees competition but preserves landlords' rights to hold carriers to quality standards - and keeps the government's nose out of the real estate business.

Through a coalition of real estate groups that calls itself the "Real Access Alliance," the industry has posted a copy of the Model License Agreement in Adobe Acrobat format at:

www.realaccess.org. The alliance also says it wants comments from service providers on the proposal and is willing to consider modifications.

A quick glance through the document reveals some clauses that might be worthy of debate:

Paragraph 2(b) says the building can limit the "size, type and location" of a carrier's equipment. It also says the carrier must get written approval for access to "Communications Spaces and Pathways," though that approval "shall not be unreasonably withheld, delayed or conditioned."

Paragraph 4(a) requires the carrier's customer contracts to automatically expire at the same time that the carrier's agreement with the building expires. There's a certain common sense there, except that it's hard to imagine that the Bell company or other incumbent would be summarily thrown out on the street and the tenants told they couldn't get service from the dominant carrier because its contract with the building had expired.

Paragraph 37 prohibits the carrier from advertising - or even mentioning in a press release - the fact that it serves a particular building unless the building owner grants its written consent. Again, the consent is not supposed to be unreasonably withheld, but competitive carriers can't hope to get clients' business unless users know which buildings they serve.

Notably, the FCC warned the real estate industry that one of the follow-up proposals it's holding in reserve deals with marketing. The FCC proposal would ban building owners from taking in multiple carriers but then preferring one in its sales process via automatic inserts in tenant welcome packages or larger commissions to salespeople for selling that particular carrier.

The Real Access Alliance says it wants any comments on its draft model contract to be submitted by Jan. 15, 2001 to the Real Access Alliance, c/o Nelson F. Migdal, Holland & Knight LLP, 2009 Pennsylvania Ave. NW, Washington, D.C., 20006, or by e-mail to nmigdal@hklaw.com. If you send a comment, please forward me a copy as well at drohde@nww.com. We'll follow up after Jan. 15 with the results.

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IDG News Service, 10/12/00

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