PRINT THIS STORY:

CHANGE TEXT SIZE:

Telecom Access

By William H. Hoffman

Major developments are unfolding on the telecommunications policy front that potentially pose significant risks for the shopping center industry with respect to forced, uncompensated telecom provider access to commercial buildings.

On July 7, 1999, the Federal Communications Commission released a notice of proposed rulemaking entitled “Promotion of Competitive Networks in Local Telecommunication Markets.” This proposed rulemaking concerns the establishment of new federal regulations that would force building owners to provide access to all telecom providers under identical terms and conditions, regardless of the extent or nature of their proposed use of the property in question. This access would apply not only to the granting of rooftop access, but also to providing service to tenants. Essentially this would allow alternative telecom providers access to buildings at the same rate as the current provider.

This proposed rulemaking has been driven largely by the new group of telecommunications providers that have sprung up since the deregulation of the industry and the breakup of the Baby Bells. These Competitive Local Exchange Carriers, or CLECs, argue that they should receive “nondiscriminatory access’’ to buildings under the same terms and conditions as current local exchange carriers. This access would presumably include terms and conditions other than strictly compensation, as well as no obligation to pay.

Therefore, if a telecom start-up with a questionable track record came into a property, the owner would have to let them in on the same terms as the Bell Co., even though the start-up may have a reputation for tearing up buildings and not fixing them. Additionally, most of the incumbent providers wired buildings when they were regulated monopolies and rarely paid an access fee.

Congressional activity

Sen. Ted Stevens, R-Alaska, has introduced so-called nondiscriminatory access legislation (S. 1301) in the first session of the 106th Congress. This legislation would dictate the terms by which property owners must grant access to their multi-unit commercial property to CLECs in exchange for the privilege of leasing any part of the building to a federal tenant. The legislation would require that rents for any new providers be “reasonable,’’ a term the federal government would define, and based on commercial rental value of the space actually used.

No legislation has been introduced in the House of Representatives as of press time. However, it is very likely the House will introduce a companion nondiscriminatory access bill. In addition, it is anticipated the House bill will be more far-reaching than the Senate legislation. More than likely the House bill will mirror the FCC notice and include access to all commercial buildings, not merely those with federal tenants.

Industry (ICSC) Activity

ICSC and the commercial real estate community filed comments in response to the FCC proposal. In addition, by forming a coalition called Real Access, the real estate community is actively working to illustrate how the current market-based system is working and is extremely competitive, requiring no federal intrusion. The financial success of a wide array of CLECs illustrates that the current system is competitive and more than functional.

The Real Access coalition argues that commercial property owners have a right to negotiate contracts, and determine which providers can have access to their properties and tenants. This ensures the most reasonable rates for tenants and allows the property owner to maintain control of his property. In addition, any federal mandate for access to these properties would run contrary to the takings clause of the Fifth Amendment to the Constitution.

The FCC will consider the filed comments before taking the next step toward establishing new regulations — or dropping the process altogether.

William H. Hoffman is manager of environmental issues in ICSC’s Washington, D.C., office.