Prepared by Brian Cassidy, attorney with Locke Liddell & Sapp
April 2004

Over the past two and half years there has been considerable activity concerning laws and regulations governing access to multi-tenant buildings by telecommunications companies. Sections 54.259-261 of the Texas Utilities Code (the "Forced Access Statutes") grant certain telecommunications service providers a mandatory right of access to multi-tenant properties, and provide property owners with the right to receive "reasonable and non-discriminatory" compensation from these providers. A recent court challenge to the constitutionality of the Forced Access Statutes initiated by Texas BOMA and other trade groups was not successful. However, a test case initiated by Time Warner Telecom of Texas, L.P. ("Time Warner") at the Public Utility Commission ("PUC") against a building owner, manager, and telecommunications consultant was recently concluded with results that provide some measure of guidance for property owners.

That case involved a request under the Forced Access Statutes by Time Warner for access to a Houston office building. One of the critical issues was an allegation by Time Warner that the building owner, manager, and telecommunications consultant (collectively "Tanglewood") had discriminated against Time Warner due to the presence of SBC communications in the building. SBC was not paying any license fees since its occupation of the building pre-dated the Federal Telecommunications Act of 1996 and changes in Texas law intending to provide for competition in the local exchange market. Time Warner, a competitive local exchange carrier ("CLEC"), alleged that it was the victim of discriminatory treatment (in violation of the Forced Access Statutes) because Tanglewood sought to charge compensation for its occupation of the building while SBC, the incumbent local exchange carrier ("ILEC"), was not paying any compensation.

Because the PUC found that Tanglewood had taken certain actions in an effort to secure compensation from SBC, it concluded that no discriminatory treatment had occurred. However, the Commission’s findings were unique to the facts of that particular case, and Time Warner has appealed the PUC’s decision and is seeking to have it overturned in the courts. A reversal of the PUC’s order would have broad implications for property owners in Texas, and therefore owners should continue to monitor the status of that proceeding.

Based on the PUC’s findings in the Tanglewood case, it appears that there are certain actions that property owners can take to minimize the likelihood of a valid discrimination claim being asserted by a CLEC seeking access to a building where an ILEC is present (and is not paying compensation and/or is subject to a license agreement). Note, however, that each case will be factually distinct, and while the following actions are advisable, none will assure property owners of a finding of non-discrimination.

1. Adopt and implement a written policy that requires a license agreement and payment of monthly access fees for all carriers for installation of telecommunications equipment in non-tenant lease space. This policy should be equally applied to ILECs seeking to expand their existing facilities and CLECs seeking to access non-tenant lease space in the building.

2. Clearly document all dealings with CLECs and ILECs concerning access to, and expansion of, facilities in a building. Telephone calls concerning access issues should be confirmed in writing, and emails should be written and retained as possible evidence in an enforcement proceeding.

3. Building owners should request that current ILECs execute a license agreement and begin paying monthly compensations (license fees) in an amount commensurate with what other providers in the building are paying. Clearly document the request and the ILEC’s response (if verbal, confirm that response in a written reply). Even if the ILEC refuses to pay, it is important to document that the request was made.

4. In the event the ILEC seeks to expand or enlarge its facilities in the building, do not permit it to do so without executing a license agreement and paying additional license fees. Document the request of the ILEC, the response of the building owner, and any subsequent communications between the ILEC and the building owner.

In the Tanglewood case, the PUC recognized that any unequal treatment which may have existed was the result of the ILEC’s status as the incumbent, and not the actions of Tanglewood. However, had Tanglewood not acted (and documented its actions) to treat SBC the same as Time Warner with respect to expansion of facilities, the decision may have been different. Because of the unique nature of the Forced Access Statutes, property owners and managers are strongly encouraged to contact legal counsel when faced with a request for access to property under those statutes.