RECENT DEVELOPMENTS IN COMMUNICATIONS AFFECTING PROPERTY RIGHTS

Transcription

1 ACREL/Prog(3/31/01) v. 2 12/26/01 1:32:36 PM RECENT DEVELOPMENTS IN COMMUNICATIONS AFFECTING PROPERTY RIGHTS By: Kenneth L. Samuelson, Esq Pennsylvania Avenue, N.W. #165 Washington, D.C fax # ksamuelson@bigfoot.com For March 31, 2001 Program I. Types of Services Demanded by Tenants [local telephone, long distance telephone, transmission of data, high speed internet, and video (including TV or broadcast)] Some tenants want savings via shared access. Some have master agreements with certain providers. II. Background Ways for Communication Providers to Access Buildings A. Landline telephone [standard copper dial-up, integrated services digital network ("ISDN"), digital subscriber line ("DSL"), T-1, or fiber optic] and cable B. Wireless, a/k/a fixed wireless, such as Winstar and Teligent C. Electricity, natural gas, water and other utility connections D. Pre-wired, a/k/a plug and play, buildings (for example, Allied Riser, BroadBand Office, and elink wire up office buildings for high-speed internet and telephone connections available to all tenants) E. Free-space optical technology that can send data through the windows of office buildings using optical beam III. Telecommunications Mandatory Access to Buildings Context: A telecom company wants an exclusive in exchange for incurring the costs to wire a building and share profits with the building owner. The building owner wants to share

2 in the profits, but also wants to be able to offer tenants multiple choices. (FCC Order October 12, 2000) "Part 64 of Title 47 of the Code of Federal Regulations is amended as follows: 1. A new Subpart X is added to Part 64 of Title 47 entitled: Prohibition on Exclusive Telecommunications Contracts 2. New Section of Subpart X, Part 64 of Title 47 provides: Prohibited Agreements. No common carrier shall enter into any contract, written or oral, that would in any way restrict the right of any commercial multiunit premises owner, or any agent or representative thereof, to permit any other common carrier to access and serve commercial tenants on that premises. 3. New Section of Subpart X, Part 64 of Title 47 provides: Scope of Limitation. For the purposes of this subpart, a multiunit premises is any contiguous area under common ownership or control that contains two or more distinct units. A commercial multiunit premises is any multiunit premises that is predominantly used for non-residential purposes, including for-profit, non-profit, and governmental uses. Nothing in this subpart shall be construed to forbid a common carrier from entering into an exclusive contract to serve only residential customers on any premises. 4. New Section of Subpart X, Part 64 of Title 47 provides: Effect of State Law or Regulation. This subpart shall not preempt any state law or state regulation that requires a governmental entity to enter into a contract or understanding with a common carrier which would restrict such governmental entity s right to obtain - 2 -

3 telecommunications service from another common carrier." (emphasis added) A. Attempts to Circumvent These Restrictions. "We emphasize that the prohibition on future exclusive contracts that we adopt today applies to all common carrier contracts in commercial settings that effectively restrict a building owner or its agent from providing access to any other telecommunications service provider. Thus, by exclusive contract we do not mean only a contract that gives the contracting provider the sole right to serve a building. Rather, we also proscribe, for instance, a contract with a competitive LEC that could permit access to that party and the incumbent, but deny access to any other competitor. 90 Similarly, we forbid any contract that would limit access to providers using a particular technology. In addition, we emphasize that contracts between building owners and local carriers that do not explicitly deny access to competing carriers, but nonetheless establish such onerous prerequisites to the approval of access that they effectively deny access, are also prohibited..." Is this meant to allow access by every one of the dozens of companies that are authorized to provide telecommunications services? If so, is that, technologically, a problem? B. Matters Not Covered by These Restrictions. FCC reserved, to further rule making, whether (1) to prohibit carriers from entering into exclusive access contracts for the provision of telecommunications services in residential multiunit premises; (2) to prohibit carriers from enforcing exclusive access provisions in existing contracts; (3) to prohibit arrangements that give a preference to a particular carrier but do not effectively restrict the premises owner from permitting other providers access, such as a carrier's providing landlords with benefits in exchange for the landlords' providing exclusive marketing or advertising services or benefits to tenants who use a particular carrier; (4) to require building owners generally, or just those building owners who allow access to their premises to any provider of telecommunications services, to make comparable access available to all such providers under nondiscriminatory rates, terms and conditions, or, alternatively, to prohibit carriers from serving multiunit premises whose owners unreasonably discriminate against competing carriers, in each case perhaps allowing the building owners just compensation; or (5) to impose any special rules with respect to building owners who provide their own telecommunications systems for their buildings. Would there be a taking in the case of governmental regulations that simply required building owners themselves to provide multiple telecommunications to effectuate a policy goal of encouraging competition? Physical taking vs. regulatory control? - 3 -

4 C. Applicability to Mixed-Use Premises. "[W]e address instances where a single premises includes both commercial and residential uses. In these cases, a building owner may choose to offer separate access agreements to the residential and commercial portions of the premises, in which case a carrier may enter into an exclusive contract to serve the residential area but not the commercial area. Where, however, a single access agreement covers the entire premises, we find it most consistent with the purposes of our rule to determine its status as residential or commercial by predominant use. Thus, for example, an apartment building that includes retail or professional establishments on the ground floor would be considered residential, whereas an office building that includes one or a few residential users would be considered commercial." D. Hotels. "We note that hotels, or similar establishments, are not covered by the prohibition against exclusive contracts because hotel guests are not tenants within the meaning of our rules. At the same time, to the extent that a hotel itself is a tenant in a commercial building, our prohibition against exclusive contracts would apply." [Footnote 92] E. States. Some states require disclosure of, or restrict, preferential arrangements with telecommunications carriers. See, for example, Massachusetts Department of Telecommunications and Energy A, Slip Op. and Conn. Gen. Stats. Ann (a)(6). Contrast this with state statutes granting mandatory access, or prohibiting preferential arrangements, with respect to cable in exchange for just compensation, albeit that the cable companies have no such federal right; see Loretto v. Teleprompter Manhattan CATV, 458 U.S. 419, 102 S.Ct (1982) and, for example, Virginia Code Ann :2, as opposed to Cable Invs., Inc. v. Woolley, 867 F. 2d 151 (3 rd Cir. 1989) (holding that the federal cable statute does not provide cable companies with the right to access multi-tenanted buildings). IV. Tenants' Rights to Install Antennae and Dishes for Television and Telecommunications (FCC Order October 12, 2000) "Subpart S of Part 1 of Title 47 of the Code of Federal Regulations is amended as follows: Section of Subpart S, Part 1 of Title 47 is revised to read: (a)(1) Any restriction, including but not limited to any state or local law or - 4 -

5 regulation, including zoning, land-use, or building regulations, or any private covenant, contract provision, lease provision, homeowners association rule or similar restriction, on property within the exclusive use or control of the antenna user where the user has a direct or indirect ownership or leasehold interest in the property that impairs the installation, maintenance, or use of: (i) An antenna that is (1) used to receive direct broadcast satellite service, including direct-to-home satellite service, or to receive or transmit fixed wireless signals via satellite, and (2) one meter or less in diameter or is located in Alaska; (ii) An antenna that is (1) used to receive video programming services via multipoint distribution services, including multichannel multipoint distribution services, instructional television fixed services, and local multipoint distribution services, or to receive or transmit fixed wireless signals other than via satellite, and (2) that is one meter or less in diameter or diagonal measurement; (iii) An antenna that is used to receive television broadcast signals; or (iv) A mast supporting an antenna described in paragraphs (a)(1)(i), (a)(1)(ii), or (a)(1)(iii) of this section; is prohibited to the extent it so impairs, subject to paragraph (b) of this section. (a)(2) For purposes of this section, fixed wireless signals means any commercial non-broadcast communications signals transmitted via wireless technology to and/or from a fixed customer location

6 Fixed wireless signals do not include, among other things... radio... (b) Any restriction otherwise prohibited by paragraph (a) of this section is permitted if: (1) It is necessary to accomplish a clearly defined, legitimate safety objective that is... or (2) It is necessary to preserve a prehistoric or historic district, site, building, structure or object included in, or eligible for inclusion on, the National Register of Historic Places... (d) Local governments or associations may apply to the Commission for a waiver of this section under " (emphasis added) A. Types of Areas Covered. Examples: Balconies and decks of apartments and residential condominium units. B. Types of Transmissions Covered. Covers voice, data and video C Just the User End. "[T]he protection of Section applies only to antennas at the customer end of a wireless transmission, i.e., to antennas placed at a customer location for the purpose of providing fixed wireless service (including satellite service) to one or more customers at that location. We do not intend these rules to cover hub or relay antennas used to transmit signals to and/or receive signals from multiple customer locations." D. Aesthetics. "[M]asts that extend more than 12 feet above the roof of the building or that are taller than the distance between the antenna and the lot line may require a safety permit... [P]ermit requirements for masts exceeding this height may be imposed to achieve legitimate safety objectives, not for aesthetic purposes..." [Footnote 258] V. Ownership or Control of Telecommunications Wiring (FCC Order October 12, 2000) "In this section, we take the following actions regarding the demarcation point that marks the division between telecommunications network - 6 -

7 wiring under LEC [incumbent local exchange carrier] control and wiring under building owner/end user control: (1) clarify that the Commission s demarcation point rules, including the revisions adopted in this section, govern the control of inside wiring and related facilities for purposes of competitive access, as well as the control of these facilities for purposes of installation and maintenance; (2) establish procedures to facilitate the relocation of the demarcation point to the MPOE [minimum point of entry] at the building owner s request in MTEs [multiple tenant environments]; (3) require LECs to disclose the location of the demarcation point where it is not located at the MPOE; and (4) resolve pending issues in the Commission s demarcation point proceeding in CC Docket We believe that these actions will facilitate access to telecommunications inside wiring by competitive providers of local telecommunications services. 96 In addition, we decline to require a uniform relocation of the demarcation point to the MPOE for the reasons discussed below We note that the Competitive Networks NPRM also raised the issue of whether the Commission should amend its rules governing cable inside wiring so that telecommunications service providers, as well as multichannel video programming distributors (MVPDs), can take advantage of procedures governing the disposition of home run wiring when an incumbent MVPD no longer has a legally enforceable right to maintain its home run wiring in a building. As discussed in the Further Notice of Proposed Rulemaking, Section V.E, infra, we conclude that we lack sufficient information in the record to determine whether to take this action, and seek further comment on the issue... Thus, we affirm that under Section 68.3 of the Commission s rules, a carrier must move the demarcation point to the MPOE upon the request of a multiunit premises owner... Finally, we note that where the building owner chooses to locate the demarcation point at the MPOE, responsibility for installation and maintenance may be contracted out to the incumbent LEC, a competitive LEC or other third party,135 but control, including determining terms of access, would lie with the building owner. We require that where such duties are contracted to a carrier that is also providing - 7 -

8 service to that building, the carrier must deal with other LECs on nondiscriminatory terms. Similarly, we expect that those building owners who choose to take control of the inside wiring will exercise that control in a nondiscriminatory way, consistent with the goals of the Telecommunications Act and the public interest.136 We anticipate that the measures described above will substantially reduce the potential for incumbent LECs to obstruct competitive access to MTEs. These changes will facilitate building owners exercise of their option to relocate the demarcation point in existing buildings, and prevent incumbent LECs from abusing their control over information regarding the location of the demarcation point. Moreover, we emphasize that to the extent incumbent LECs continue to exercise control over on-premises wiring, they must afford access to that wiring as a UNE at forward-looking prices. 137 In light of all these safeguards, we believe it is not necessary or prudent at this time to mandate a uniform move of the demarcation point to the MPOE." (emphasis added) VI. Access to Utility Companies' Rights of Way Within Multiple Tenanted Buildings By Competing Telephone and Cable Companies (FCC Order October 12, 2000) A utility is required to provide, to cable television systems and competitive local exchange carriers, nondiscriminatory access to any pole, duct, conduit or right or way owned or controlled by such utility. A. This obligation includes ducts, etc. located inside multi-tenanted buildings, such as riser conduits that are owned or controlled by the utility. B. "[A] right-of-way exists within the meaning of Section 224, at a minimum, where (1) a pathway is actually used or has been specifically designated for use by a utility as part of its transmission and distribution network and (2) the boundaries of that pathway are clearly defined, either by written specification or by an unambiguous physical demarcation For example, a broadly worded easement permitting a utility to place facilities - 8 -

9 throughout a building or in hallways would not in itself create a right-of-way under this definition. A utility s placement of facilities in a defined pathway pursuant to such an easement would, however, create a right-of-way along that pathway, thus giving telecommunications carriers and cable service providers a right of access if the right-of-way is owned or controlled by the utility. 207 We note, however, that a utility must take all reasonable steps to expand capacity to accommodate requests for attachments just as it would expand capacity to meet its own needs." (emphasis added) C. "[T] the right of access granted under Section 224 lies only against utilities, and that Section 224 is not intended to override whatever authority or control MTE [multiple tenant environments] owners may otherwise retain under state law. 228 We therefore conclude that, consistent with the purposes of Section 224, utility ownership or control of rights-of-way and other covered facilities exists only if the utility could voluntarily provide access to a third party and would be entitled to compensation for doing so. As the Real Access Alliance points out, the forms of access arrangements between utilities and building owners, and the resulting rights and responsibilities of each party, can vary greatly depending on the means by which access was originally achieved and on state law. 229 Thus, state law determines whether, and the extent to which, utility ownership or control of a right-of-way exists in any factual situation within the meaning of Section 224." (emphasis added) VII. Terms of Leases and Licenses Between Owners and Telecommunications Providers For forms, see (Roger Platt's); Wired for Profit, published by the Building Owners and Managers Association International (1998) at National Association of Industrial and Office Parks at Rooftop Communications and Antenna & Leases, published by - 9 -

10 the ABA Section of Real Property, Probate and Trust Law (2000 Annual Meeting); A. License vs. Lease. Personal to the parties; terminable at will, dissolution, or death; contract right, instead of a property right; no exclusive right to possession during the term; not inherently assignable or binding upon successors, including mortgagees by foreclosures; may not even be recordable; contract remedies and defenses, including clearer duty to mitigate damages, no Rule Against Perpetuities, and issue of self-help remedies; need to address covenant of quiet enjoyment and implied rights of access; executory contract in bankruptcy. B. Permitted Uses. The height, capacity and foot print of a tower to be constructed, to define the leased/licensed space, to control appearance, and for safety; number and type of transmitters and receivers permitted thereon; any communications use vs restrictions upon the types of permitted frequencies and signals, such as cellular, microwave or other; who controls any excess tower or roof capacity for additional antennae; locate antennae at least 100 feet above the ground and from human contact; accessory rights of the Tenant/Licensee to access the leased/licensed premises and/or to install conduit and cable in the shafts, ducts and utility closets of the building; duty of Tenant/Licensee to maintain visual barriers or stealth features. C. Permits and Structural Analyses Contingencies. Types of zoning approvals, FAA approvals and FCC licenses required, and standards and the lengths of time associated with each; Rule Against Perpetuities; capacity of any existing tower that Tenant/Licensee will use. D. Signal Interference. By or with existing uses (first in time rule); by or with new uses, including potential new tenants of the building; termination and relocation rights; who is responsible for enforcing against the other users, including paying the legal fees, etc. of filing and processing a complaint of interference with the FCC; what liability does the Landlord/Licensor have for nonenforcement against other users? E. Access. Restrictions upon Landlord/Licensee s access to the leased/licensed premises, including fences, encasing wires, locked transmission rooms, and, from 10 feet, hazard warning signs. Protections for the public and/or building tenants. F. Preventative Maintenance and Repairs. Assuring the continued structural integrity of the tower and its compliance with FAA lighting and painting requirements

11 G. Indemnities. Claims for electronic harm or interference occurring outside of the leased/licensed premises. H. Early Termination Rights for Tenant/Licensee. Loss of a necessary permit; signal interference, whether or not beyond Landlord/Licensor s control; change impairing the technological suitability of the leased/licensed premises for the uses intended or making it unfeasible to continue to operate the leased/licensed premises; short down time due to casualty or condemnation. Reimbursement of Landlord/Licensor s expenses? I. Authority of the Roof-Top Management Company as the Landlord/Licensor s Agent. J. Status as Personalty; Removal at the End of the Term. Telecom company s ability to remove and replace equipment during the term of the lease/license. Time and expense of removal of the tower or antenna at the end of the term; estimated useful life of the tower or antenna and safety concerns. K. Remedies - Self-Help. Prohibiting the Landlord/Licensor from cutting the wires and other self-help remedies. L. Remedies - Consequential Damages. Limitations upon the Landlord/Licensor s and the Tenant/Licensee s respective liabilities for consequential damages. M. (If located on or within a building and designed to serve the tenants of the building) 1. Services Tenant/Licensee is to Provide. Types of services; upgrades and updates; competitive prices. 2. Keeping Roof Space Available for the Buildings' Tenants. 3. Other Methods of Compensation. Percentage of gross revenues, stock options, marketing and advertising fees, and sign-up fees. VIII. Inside Wiring Terms of Leases Between Landlords and User (i.e. Space) Tenants A. Availability of fiber optic cable to the connection point on the floor of the Leased Premises B. Adequacy of, and right to use, additional riser space in the building

12 C. Ease of connecting to multiple communications providers D. Right to place satellite dishes or antennae on the roof E. Sufficient redundancy, electrical power, and HVAC