FCC Targets Exclusive Building Deals


Washington-Concerned about competition in the business market, the Federal Communications Commission has taken steps to restrict exclusive contracts between telecommunications carriers and commercial landlords.

The FCC, under pressure from building owners, stopped short of applying its rules directly to landlords. It decided instead to target some service contracts signed by telecommunications providers.

In a 4-1 vote on Oct. 12, the FCC ruled that telecommunications carriers are barred from signing new contracts that give them exclusive rights to serve commercial properties.

"It's limited to commercial buildings and it has prospective effects," said Tom Sugrue, chief of the FCC's Wireless Telecommunications Bureau.

FCC Commissioner Harold Furchtgott-Roth indicated that he thought the agency exceeded its authority.

"I view this as policy in search of law, and it never found it," he said. "There is just a great disconnect between what the statute says and what this order does."

But the FCC put off to another day questions about its authority to void existing exclusive contracts and whether an exclusivity ban should extend to residential buildings.

The agency also will weigh later whether it can prevent telecommunications carriers from providing service to commercial properties, effectively barring competing carriers.

The FCC adopted the rules after an extensive lobbying battle between phone companies that are trying to take on the incumbents, only to find that landlords refuse to bargain or make excessive demands.

Landlords, by contrast, insist the market is functioning properly and claim new telecom carriers want an automatic right of access to their property without negotiation.

The FCC's action prompted both sides to declare victory.

John Windhausen, president of the Association for Local Telecommunications Services, said he expects the FCC's ruling will force landlords to come to the bargaining table.

"The problem is that landlords give us the runaround," he said. The FCC's ruling "doesn't guarantee results. It does guarantee that the building owner has to negotiate with us."

ALTS, based here, represents fixed-wireless telecommunications providers Winstar Communications Inc. and Teligent Inc.

Gerry Lederer, vice president of government and industry affairs for the Building Owners and Managers Association International, applauded the fact that the FCC rules did not apply to building owners.

"It seems very clear that the commission did not mandate access to our buildings," Lederer said. "They exercised no jurisdiction over building owners as far as we can tell."

The FCC also decided that rules designed to allow apartment dwellers to install direct-broadcast satellite dishes on balconies and other extensions should be expanded to include antennas that receive and transmit wireless communications signals.

BOMA has launched a court fight against the FCC's first rules on the rights of satellite dish owners in rental units.