THE ABCS OF CABLE, PHONE AND INTERNET CONTRACTS

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THE ABCS OF CABLE, PHONE AND INTERNET CONTRACTS

• National Apartment Association
• June 10, 1999
• Matthew C. Ames
• Miller Van Eaton, P.L.L.C.
• mames_at_millervaneaton.com

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INTRODUCTION

• What to Look Out for in a Contract.
• The FCCs Inside Wiring Rules.
• State Mandatory Access Laws.
• Local Franchising.

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WHAT TO LOOK OUT FOR

• Theres a reason the operator gave you that form.
• There are at least nine reasons you shouldnt
  sign it.

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WHAT TO LOOK OUT FOR

• Nature of grant easement vs. license.
• Term.
• Renewals.
• Rights of First Refusal.

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WHAT TO LOOK OUT FOR

• Cable vs. Broadband.
• Definition of services.
• Ownership of wiring.
• Indemnification.
• Assignment.

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REGULATION OF INSIDE WIRING

• Video FCC inside wiring rules State
  mandatory access laws.
• Telephone State-to-state.
• Internet Depends on who the provider is.

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FCCs CABLE INSIDE WIRING RULES

• Three kinds of wiring
• Riser cable (from outside system to point where
  network serves only one unit).
• Home-run wiring (from entry point/
  riser/telephone closet to unit).
• Home wiring (inside unit).

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INSIDE WIRE RULES

• Home run wiring.
• Two models building-by-building and
  unit-by-unit.
• Cable home wiring.
• Also two models.

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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.
• 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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OTHER ISSUES

• No federal mandatory access.
• FCC still considering exclusive and perpetual
  contract issue.
• All contracts must now address disposition of
  home run wiring.

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STATE MANDATORY ACCESS LAWS

• State law may allow operator on premises even
  without owners consent.
• But dont assume owner has no negotiating
  leverage.
• Federal inside wiring rules still may apply.
• Must read statutes carefully.

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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 building access agreements often tied to
  term of franchise, including renewals.
• Federal Cable Act makes it hard for local
  government to deny renewal.

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CONCLUSION

• Eternal vigilance is
• the price of liberty.