The vexing problem of access by multiple carriers to multi-tenant office buildings is the telecom regulatory issue that won’t die. Now the plot is thickening: The U.S. federal government itself turns out to have a vested interest in the issue – as a user.
Last month, the General Services Administration (GSA), which manages all the federal government’s real estate dealings, wrote to the Federal Communications Commission (FCC) detailing problems in a project to split the government’s local telecom business among incumbent and competitive local exchange carriers (ILECs and CLECs).
The key challenge: Getting the ILECs to let the CLECs place their equipment in federal buildings nationwide without costly fees or prohibitive administrative burdens.
Let’s reset the overall issue. Last October, the FCC decided to prohibit all carriers from entering into exclusive contracts with multi-tenant building owners. While on the surface that sounds like a victory for CLECs struggling to break into new markets, the decision was really a compromise.
That’s because the FCC declined to go further and actually order a complete “non-discrimination” scheme under which all carriers must have access to all buildings on equal terms. Instead, it put out a notice for further comment asking what new rules should apply beyond a simple ban on exclusivity. The Building Owners and Managers Association (BOMA) shortly followed up with a “model contract” between landlords and carriers, obviously a self-regulatory move designed to stave off any new government-imposed mandates. I promised to keep you informed on developments on both the FCC and BOMA fronts.
The first FCC comment deadline passed late last month, and the GSA weighed in with its observations. The GSA has a project called the Metropolitan Area Acquisition (MAA) program under which it lets out competitive contracts for local voice and data service in cities where federal agencies maintain regional offices. MAA contracts for 19 metro areas have been awarded so far, generally with multiple winners in each city who split the business.
But contracting is one thing, implementation another. In a number of cases the MAA contracts are proving “difficult and costly” to put in place, the GSA told the FCC, especially where federal offices take up part but not all of an office building. The CLECs who have won contracts need access to conduit and cable generally installed by the incumbent, GSA explains. “However, in one MAA city, the incumbent LEC asserted that it maintained full control over the facilities up to the premises of each tenant on every floor of the building,” GSA says.
After complaints, the incumbent then offered to move the demarcation point between it and the CLECs to the “minimum point of entry,” such as a common wiring closet. But the ILEC sought compensation for turning over the remaining cable to the CLEC. Though GSA doesn’t state the amounts demanded, it says it considers the sums unreasonable. GSA’s logic? The cable in these cases had been there a long time, and by now should have been largely or entirely depreciated.
GSA also notes that one of the MAA participants uses wireless technology. (While unnamed, this is undoubtedly a reference to Winstar, which has won several MAA contracts.) The GSA then comments: “To implement this technology, a wireless LEC requires the same functionalities in the interior of the [building] as the wireline carrier, as well as an additional capability – rooftop access. As a general matter, rooftop access can be costly to the carrier.”
GSA stops short of recommending specific new rules to the FCC, but broadly hints that something should be done about “potential fees.” New FCC Chairman Michael Powell has stated that he’s not big on passing rules that further grease the skids for what he termed “Bell look-alikes,” a clear allusion to CLECs that rely on rented telephone loops to provide user competition. But the FCC will have to respond directly to its own sister agency, the GSA, which after all is often said to be the nation’s largest single real-estate manager. Look for lots more maneuverings before the FCC re-addresses this issue sometime during the spring or summer.