Cable Company and Telecom Access Agreements: What a Manager Needs to Know!


Mark Weaver


The arcane world of “Access” Agreements, or “Right of Entry” Agreements, is a deep abyss of Federal and Local government requirements mixed among big companies’ attempts to create an unfair advantage over their competition.


Unfortunately, knowing


which terms and issues can be modified and which are non-negotiable can be a nightmare for the manager. This becomes overwhelming when the financial implication of these agreements become evident.


There are three main points that a community association manager must understand to truly maximize the benefit to the community they manage. These points are:


1. Who regulates the Cable and Telecom Companies – and why does it matter?


2. Who controls and/or maintains the wires? 3. Why do marketing rights matter?


Who regulates the cable and telecom companies?


The Federal Communications Commission (FCC) regulates many things – and key among those are the cable and telecom companies (referred to as “providers”). The FCC can revoke any provider’s license and shut down the provider’s entire business. The FCC has delegated some issues to the local franchise jurisdictions, allowing providers to employ the utility trenches to deliver service. Hence, agreements from providers will incorporate FCC and local franchise obligations to prevent conflict between the provider, the regulating agencies and buildings. Simply, if the provider must pick a fight between your HOA and the FCC, your HOA will lose. Eighty percent of the agreements providers write contemplate these conflicts.


• These obligations are the reason providers ask for the agreements. As a reference, look at the City of Seattle Franchise Agreement with Comcast, located at https:// www.seattle.gov/Documents/Departments/SeattleIT/cable/ ComcastFranchiseAgreement_Jan2016-Jan2026.pdf.


This


document exposes multiple customer service requirements, technical requirements, and most importantly for our purposes, the provider’s obligation to obtain written permission to provide service to residents. See Chapter 10, Subparagraph D.


Who controls and maintains our building’s internal cable wiring?


The FCC breaks down the wiring into three distinct sections, but only one applies to most communities. This section is called the “Cable Home Run Wire” (CHRW), which runs roughly from the “Demarcation” point to roughly 12” outside each individual unit. The providers want to have “Exclusive Use” of this section of wire, for two reasons. The first is to ensure the technical quality that is required by those in authority. If something as simple as a connector isn’t installed correctly, it can result in the FCC forcing the provider to turn off all services to the building. The second reason is to minimize competition. Simply, if Provider A has a contractual right to that section of wire, then Provider B can’t use it.


• This allows for some very interesting strategies. The providers will often pay good money for the rights to have “Exclusive Use” of the CHRW. They will also agree to maintain or replace the CHRW if needed.


So…if no other local providers exist


(common in many markets), and Provider A will pay money and maintain the CHRW in exchange for Exclusive Use, does it harm the community or benefit the community? Likewise, if wiring is 30+ years old, replacement needs to be planned. Does the community want to pay for that, or pass that expense onto the provider?


26 Community Associations Journal | June 2017 Why do marketing rights matter?


To obtain and/or maintain a competitive advantage, the providers will often pay money and/or offer quarterly revenue shares to exclude other providers from advertising on-site. The providers may also offer benefits like free WiFi or host community events. The manager must understand what other providers are available to balance the residents’ choice needs versus income.


• This is critical when negotiating “bulk” pricing. A clear


understanding of the residents’ usage of services (TV and/or Internet) will help to identify if “bulk” is good or bad in relation to the marketing issue. One size does not fit all, but “bulk” can be a great benefit for certain communities.


These agreements are a unique opportunity to either increase or lower the budget reserves, along with increasing the quality of service and life within the community. Ignore these agreements at your community’s peril.


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