WASHINGTON-Fixed broadband wireless carriers, seeking to underscore the need for nondiscriminatory building access, say they have identified a `smoking gun’ in the form of a legal memo on a license agreement between BroadBand Office and a national real estate company that imposes a 12-month blackout period restricting access to competitive local telecom carriers.
The Federal Communications Commission this week is expected to vote on nondiscriminatory building access to telecom carriers.
“Wireless companies, such as Winstar (Communications Inc.), Teligent (Inc.), MCI (now WorldCom Inc.), Nextlink (Communic-ations Inc.) and AT&T (Corp.), may bring their services into the building, however, we are recommending that Hines properties enter into negotiations only if they are strongly driven by owners or tenants,” states the legal memo.
Hines is a top U.S. real estate firm based in Houston.
The license agreement memo was filed with the FCC on Sept. 1 by Edge Connections Inc.
“The license provisions and negotiation procedures described in the document are consistent with Edge’s experience in the Atlanta market, where several different partners of BBO have told Edge that they could not enter into a building access agreement with Edge due to a `moratorium’ imposed by BBO,” Edge attorney Todd Daubert wrote the FCC.
BBO, a San Mateo, Calif.-based firm funded by Silicon Valley venture-capital giant Kleiner Perkins Caufield & Byers, provides packaged telecom Internet services to small and medium-sized businesses. The firm is headed by Dan Chu, who wrote the business plan for BBO at Kleiner Perkins, incubated the company, and hired the management team.
A mainstay of the management team is Rachelle Chong, who serves as general counsel and vice president for government affairs. Chong is a former FCC commissioner who had a big hand in implementing the 1996 telecom act, a landmark piece of legislation designed to inject local competition into a market heretofore dominated by Bell telephone companies and GTE Corp.
Chong said the excerpt from the Hines legal memo on the Hines-BBO license agreement “is inaccurate because it is incomplete.” The former FCC commissioner said other portions of the Hines-BBO license agreement make it clear that any telecom provider can provide service to any tenant in a Hines building.
Chong said the 12-month `blackout’ provision in the Hines-BBO license agreement is a short-term restriction on Hines with respect to other building-centric telecom service providers, like BBO.
“It’s not like we were the first ones in and locked everybody out,” said Chong, referring to the fact that WinStar, Teligent and others have been in business longer than BBO and that BBO has had relative success in marketing its service.
The FCC, for its part, is faced with balancing legal and constitutional issues with pro-competition policies of the 1996 telecom act.
The real estate industry argues that forcing building owners to accommodate competitive telecom providers seeking access amounts to an unconstitutional taking of property.
Others counter that it is not unconstitutional if the building owner is compensated.
Chong said there are practical limits that give rise to the constitutional takings issue. If there is insufficient room in a building’s telephone closet to accommodate all interested telecom service providers, a building owner then becomes obliged to add space-which she said is a takings issue.
The FCC has been deluged in recent weeks by real estate, fixed wireless carrier and BBO lobbyists. Many of the same lobbyists also have met with staffers on Capitol Hill and at the White House, both of which are divided on the issue of government mandated nondiscriminatory telecom building access.
The House and Senate have bills pending that would require government and non-government buildings to provide access to telecom services providers. The White House has considered issuing an executive order to force government buildings to provide fair access to competitive telecom service providers.
However, neither Congress nor the White House is expected make any final decisions this year.
The BBO controversy actually is not the main obstacle facing fixed broadband carriers and others. The big challenge is prying open building access in a market characterized by long-term contracts between real estate firms and dominant landline telephone companies. At the same time, a revolution is occurring in the real estate business as tenants demand more and more advanced high-tech connectivity.
“The idea of the ’96 act was not to transfer monopoly power from the RBOCs (regional Bell operating companies) to building owners and building-owner telecommunications service providers,” said Joseph Sandri, vice president and regulatory counsel for WinStar.
