NAHB MULTIFAMILY COUNCIL REGULATORY ISSUES IN WIRING APARTMENTS

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NAHB MULTIFAMILY COUNCILREGULATORY ISSUES IN
WIRING APARTMENTS

• Matthew C. Ames
• Miller Van Eaton, P.L.L.C.
• NAHB Convention and Exposition
• Dallas, Texas
• January 17, 1999

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INTRODUCTION

• Five things a building owner needs to know
• FCC inside wiring rules
• Franchise agreements
• Mandatory access laws
• FCC satellite dish rules
• State public utility commission actions.

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INSIDE WIRE RULES

• Wiring in common areas (home run wiring).
• Two models building-by-building and
  unit-by-unit.
• Wiring inside units (cable home wiring).
• Also two models.
• All contracts must now address disposition of
  home run wiring.

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HOME RUN WIRING

• Building-by-building
• Operator must not have legally enforceable right
  to remain on the premises, e.g., contract,
  access law, fixtures law.
• Owner may acquire all wiring in building.
• Must give 90 days notice.

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HOME RUN WIRING (Cont.)

• Operator may elect to
• remove.
• abandon.
• sell.
• If elects to sell, price determined by
  negotiation. If no agreement in 30 days, can
  arbitrate.
• Owner may let new provider exercise rights.

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HOME RUN WIRING (Cont.)

• Unit-by-Unit
• Assumes multiple providers can serve building by
  switching control of home run wiring.
• Owner must give 60 days notice.
• Provider has same 3 options remove, abandon, or
  sell - but election applies to all individual
  changes by subscribers.

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HOME RUN WIRING (Cont.)

• Owner or alternative provider and operator have
  30 days to set price.
• Can pay up-front lump sum, or agree to per-unit
  price.

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CABLE HOME WIRING

• Residents can buy wiring from operator when
  service terminated.
• Building owners now have right to buy wiring
  inside units on unit-by-unit basis, if subscriber
  terminates service and does not buy wiring.
• Owner may also buy all wiring in the building if
  all service in building is terminated.

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KEY POINT

• If dont acquire title to wire up front, must
  negotiate transition.
• Whoever owns wiring has upper hand in renewal
  negotiation.

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FRANCHISE AGREEMENTS

• Granted by local government for 10-15 years.
• Sometimes require building owner to give operator
  free access.
• Sometimes require operator to serve all residents
  in City -- may or may not be subject to owners
  consent.

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FRANCHISE AGREEMENTS (Cont.)

• Incumbent has market power hard to compete
  head-to-head.
• Existing access agreements often tied to term of
  franchise, including renewals.
• Federal law makes it hard for local government to
  deny renewal.

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MANDATORY ACCESS LAWS

• About 18 states require building owner to allow
  access, usually with only nominal compensation.
• Can still negotiate non-revenue terms of access.
• Must review law closely -- terms differ from
  state to state.

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SATELLITE DISH RULES

• Residents have right to put up satellite
  antennas, inside units and on patios and
  balconies, if within leasehold.
• May affect building design, terms of leases,
  economics of competition.
• Most buildings probably not affected.

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STATE PUC ACTIVITY

• Competitive providers demanding access to
  buildings.
• Proceedings in California, Florida, Nebraska,
  Texas and others.
• States are where the action is.

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WHATS AT RISK

• Exclusive contracts.
• Marketing arrangements.
• Access fees.
• Prior notification.
• Ability to treat providers differently.

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CALIFORNIA PUC

• Questioned PUCs authority over building owners.
• Argued that forced access is a taking.
• PUC acknowledged arguments -- but imposed
  non-discrimination requirement on incumbent
  providers.
• Effects still unclear.

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FINAL THOUGHTS

• High speed Internet access is the issue.
• Will cable and voice migrate to Internet?