*tele.com. Tar Beach Battle Gets Even Messier. Providers, landlords, FCC square off over rooftop rights
by Meg McGinity. Meg McGinity is senior
editor/wireless for tele.com. She can be reachedat
mmcginit@cmp.com.
Renting rooftop access should be a win-win situation for
wireless competitive local exchange carriers (CLECs) and
landlords. Wireless CLECs say they need the access, and
most landlords claim they're only too happy to lease it. In fact,
many have been doing just that for years, renting these sites to
cellular and paging companies to set up their own antennas. "I
buy a building for one reason--to make money," says Steve
Grossoehme of Rein & Grossoehme Commercial Real Estate
LLC (Phoenix). "If I can rent out the roof and make more
money by leasing it, it's a win-win."
Unfortunately, a few nasty little catches have surfaced in recent
months that could undermine this profitable payoff. There are
growing reports, for example, that the time required to
negotiate access rights is crippling these carriers' competitive
position. Beyond this, there are concerns that some landlords
are leveraging their control to demand excessive fees. These
concerns have led in part to increasing calls from fixed wireless
providers demanding that they be guaranteed fair access to
potential business and residential subscribers in office and
apartment buildings.
The rising turmoil surrounding these rights has now also
inspired the Federal Communications Commission (FCC) to
consider stepping in and setting uniform public access rights
for providers. At first glance, that might seem like a boon to
fixed wireless carriers, but it could backfire if building owners
decide to fight the move legally, which could potentially block
access indefinitely. "Right now you have parties sitting at the
table negotiating. If one of those parties wants to have that
access mandated, do you trust the other side?" asks Jerard
Lavery Lederer, vice president for government and industry
affairs/research at Building Owners and Managers Association
(BOMA) International (Washington, D.C.).
Access is a huge issue for these providers if they're to remain
competitive with wireline providers, says David Turetsky, vice
president of law and regulatory affairs at Teligent Inc. (Vienna,
Va.). "It's about balancing the important right of consumers to
choose their service provider and private property," he says.
The shame, says Turetsky, is that real progress in developing
adequate access was under way. In Florida, BOMA
International got together with AT&T and several competitive
providers and reached an agreement to provide fair access.
The measure was stopped on the floor of the Florida state
legislature in April. Proponents of the measure say a conflict of
interest--a voting party was involved in building
ventures--killed it. But they add that getting the measure that
far shows hope. "This was a situation that was supported by
BOMA, ALTS [Association for Local Telecommunications
Services] and CLECs, so it shows that an agreement is
possible," Turetsky says.
For some of these fixed wireless carriers, getting into a
building to offer access is akin to Courtney Love passing a
co-op board. It's not going to happen easily, quickly or
probably cheaply. Russell Merbeth, vice president of legal
regulatory affairs at WinStar Communications Inc. (New
York), knows about the challenges firsthand. Access can
usually be gained, he says, but landlords sometimes undermine
negotiations. In one example a landlord asked for an upfront
fee of $50,000. This type of pressure has the FCC worried.
"The commission says there have been a lot of anecdotal
stories that carriers are having problems getting access to
multiple units," says Jeff Steinberg, deputy chief of the FCC's
wireless division. "As this could be a potentially serious
problem, the commission wants to explore everything it might
be able to do about it." The FCC has issued a proposal for
rulemaking on rooftop access and is seeking comments. It
hopes to reach a decision by the first quarter of 2000.
Building trade organizations are seeking a hands-off approach.
Even with the occasional problems, these groups think the
current process is working fine. "Let's negotiate at the
bargaining table, not at Congress or the FCC," says Lederer.
"The marketplace is working." Many CLECs, including
Advanced Radio Telecom Corp. (ART, Bellevue, Wash.), a
wireless CLEC, are working with real estate companies that
own many properties in order to gain access to many buildings
at once.
Companies like WinStar and Teligent aren't sure they can
wait. Their fixed wireless systems--local multipoint distribution
service (LMDS) in these cases--offer high-speed bandwidth
services at prices low enough to possibly attract substantial
subscribers. But without strategic rooftop placement for their
various antennas, widespread services is impossible. "I think
this is a tremendous issue for anyone trying to compete in
telephony," says Larry Swasey, senior analyst at Allied
Business Intelligence Inc. (ABI, Oyster Bay, N.Y.). "One of
the major problems the new providers will have in reaching the
small to midsize businesses, as well as the consumers that they
will trickle down to, is rooftop access."
Until the FCC makes a decision, rooftops will continue to fall
under the heading of private property, meaning each provider
must negotiate leases separately with each landlord. In most
cases, leasing costs aren't significant, in some cases running
$350 per month. What really hurts providers are the time and
manpower it takes to negotiate these deals. WinStar CEO
William Rouhana says he has 200 full-time employees devoted
to the matter. Right now, WinStar has enough rooftop
access--5,500 buildings to date--to keep up with its projected
subscriber growth.
Yet if WinStar moves to increase these projections, it will have
to spend significantly more time and money on gaining access.
That makes the idea of FCC help particularly attractive, so
long as it doesn't create too many legal battles with building
owners. "The frustrating part is the time it takes, not the
results," say Rouhana, who estimates that negotiations can
take nine months in some cases.
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