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Battling over buildings

Disputes over satellite dishes at rental properties will come to a head this week. That's when the federal appeals court in Washington hears an appeal by building owners of FCC rules issued in 1998 giving tenants right to install DBS dishes and antennas on balconies and other portions of the property they control.

The FCC also is mired in a fight over broader rules outlawing exclusive contracts between owners and a single communications provider. Building owners, along with local phone companies, including BellSouth and Verizon, are hoping to relax those rules.

The battle to hook up rental properties, such as office buildings and apartments, is one of the hottest fights over access.

In the last three years, regulators have taken several steps giving commercial and residential tenants more power to choose TV, telephone and other communications providers other than the ones already serving their buildings.

But landlords and incumbent providers are fighting the new requirements, most of which have come in the form of FCC regulations they say violate basic property rights.

It's easy to see why: Controlling the entrée to customers in the rental market could dictate who gets to turn those renters into subs.

Sales for multi-tenant broadband services and equipment is expected to more than double from $3.4 billion last year to $8 billion in 2005, according to Cahners In-Stat Group (which is owned by BROADCASTING & CABLE's parent company).

FCC Cable Services Bureau Chief Deborah Lathen and the Wireless Bureau are entangled in a number of similar battles, all of which are fallouts from the 1996 Telecommunications Act's order to end communications monopolies and bring new technologies to consumers. The most high-profile fights concern Internet providers' drive to gain access to the cable companies' broadband networks and utility companies' battle to eliminate caps on prices charged to cable companies that string their wires on utility power poles to deliver Internet service.

"The immediate issues we're facing all center around the question of access. But it comes in many flavors and colors," Lathen told the five FCC commissioners last week. "All of these things have a very familiar refrain."

Federal judges today (March 5) get to add a few bars of their own when they take up the building-owners' challenge to the FCC's antenna rules.

"We don't think the commission has authority to regulate property owners or to tell them they must let tenants put up antennas," said Matthew Ames, attorney for the Real Access Alliance, a coalition of building owners. Furthermore, he said, the FCC doesn't differentiate between commercial and residential properties, but the economics of each business differ.

Businesses renting office space will pay large sums for telecommunications links and often demand that landlords give them the choice of providers. Some feel that renders the FCC's rules a useless intrusion.

A Real Access Alliance survey found that 94% of commercial tenants said their telcom needs are being met, and only 1% reported that management had denied a request to obtain services from others.

Profit margins from serving households, on the other hand, are so low that providers may refuse to serve apartments altogether without the right to sign exclusive contracts. "It's hard to get people to build duplicate wiring," Ames said. "There are economic barriers that have nothing to do with property owners."

But the FCC counters that before the rules, landlords routinely barred new providers. As for the agency's authority, the FCC told the appeals court that the same power to dictate the terms utility companies must follow when leasing pole space to cable operators justifies the antenna rules.

The building owners, joined by local phone companies, are waging a similar fight against the FCC's general rule requiring landlords to grant competitors access to a building's communications services.

This uneasy coalition is split over what the phone companies say is too much power for building owners to dictate the connection point to a building's wiring network.

The Smart Buildings Policy Project, which represents competitors to the incumbent phone monopolies, wants to make rules tighter by nullifying exclusive contracts in place before the rule that was passed last summer.

Although the landlords have offered to negotiate a settlement, Philip Verveer, the project's Washington attorney, says the sides are too far apart for him to be optimistic about a deal: "We're skeptical that we can get a satisfactory agreement outside the FCC."