Copyright 1999 The Denver Post Corporation
The
Denver Post
June 7, 1999 Monday 2D EDITION
SECTION: BUSINESS; Pg. E-01
LENGTH: 1016 words
HEADLINE:
Is U S West more equal in access race? Phone firms press building owners
BYLINE: By Emily Narvaes, Denver Post Business Writer
BODY:
Getting a few square feet for some
fiber-optic cable in an office tower has become a significant bone of contention
between building owners and telecommunications providers nationwide.
Telephone companies say they should be able to just walk into an office
building, set up their equipment and start competing for customers without
seeking approval or even paying rent. After all, they argue, the Baby Bells,
such as US West in Denver, had that arrangement for years because building
owners wanted telephone service in their developments.
And until
recently, there was no choice: In Colorado, US West has been the only game in
town. But office building owners and managers say that giving companies an
automatic right to use the building - even if it's to string fiber-optic cable
from the roof to the garage - would violate their private property rights. Plus,
there are limits on the amount of space and possibly the amount of electricity
available, they said. Leveling the playing field
It's the equivalent of
taking the property without just compensation, which is unconstitutional, said
Gary Lederer, vice president for government and industry affairs for the
Building Owners and Managers Association in Washington.
Some
telecommunications companies, however, say equal access is necessary to compete.
Until the past few years, US West has been the dominant provider of local phone
service in Colorado and in 13 other states.
"We support the notion of
equal access," said Tom Flavin, senior director for government affairs at ICG
Communications Inc., an upstart phone company based in Arapahoe County. "If US
West is paying to be in a building, then we're willing to pay what they pay. If
US West is not required to pay, then we don't think we should be required to pay
in that building, either."
Several states - California, Connecticut and
Texas - have adopted some form of legislation forcing building owners to allow
phone companies access to their buildings. In Colorado, so far, the issue has
been rejected.
Nationally, however, the debate is still very much alive.
Congress recently held a hearing on the issue and plans another this week, but
no legislation has been introduced, Lederer said.
Some real estate
experts argue against the notion of creating laws on the subject, saying the
marketplace should be driven by supply and demand.
The
telecommunications industry is so new and changing all the time that it's a
tough time to be adding new rules, said Lyla Gambow, property manager with
Transwestern Commercial Services. Among her responsibilities is the Mellon
Financial Center, a 32-story building in Downtown Denver.
"We don't
really need legislation," Gambow said. "Legislation only adds governmental
intervention where it's not really necessary."
Still, building owners
want to accommodate as many telecommunications providers as possible because
they know it could mean yet another amenity for their office tenants. Real
estate folks just want to do it on their own terms, Lederer said. "We want our
office buildings with access to the biggest information superhighway possible,"
Lederer said.
But it's not as easy for US West as it used to be: The
rules are changing with the added competition, a company spokeswoman said. How
times have changed
"At one time when we were the only telecommunications
provider, building owners welcomed us in because they wanted to have that
service for their tenants," said Anna Osborn, a US West spokeswoman. "But today
it's a different environment. We have to negotiate for access just like every
other telecommunications company."
She added that US West paid to
install telephone cables in buildings years and years ago.
"We're not
still incurring a cost," Osborn said. "If we can go out and provide a building
owner with so much value through our products and services that they provide us
access and space without cost, that's their decision. We're certainly out there
to negotiate the best deal we can, as is every other telecommunications company
out there."
Competition is still in its infancy in the
telecommunications business, though, particularly for residential service.
The Telecommunications Act of 1996 essentially created
a marketplace for phone companies to compete against the Baby Bells to benefit
consumers. Prior to deregulation, in Colorado, US West was it, said Michael
Bovee, whose company, New Millenium Enterprise Inc., negotiates license
agreements between the phone companies and real estate owners.
Because
they were the only phone company, landlords typically have handed US West free
access to their buildings and their customers, said Steve Bassett, who heads up
leasing at Jones Lang LaSalle, one of Denver's largest property managers.
US West is still in a dominant position but faces serious competition
from such companies as ICG, AT&T and MCI Worldcom. About 30 companies have
filed with the Public Utilities Commission, which regulates telecommunications
companies, to compete in the state. Not all are active yet.
One
landlord, Richard Czoski, vice president and general manager of Brookfield
Commercial Properties Inc., said he has talked briefly with US West about
charging them to use space in the building.
"We believe that US West
should pay like everyone else," Czoski said.
In general, the other phone
companies are treated more like other tenants - they pay for the space they use
in the building through a licensing agreement that is similar to a lease,
Bassett said. The issue doesn't really affect the rooftop space needed for
satellite dishes used for cable TV and cellular and wireless service, he said.
License agreements with phone companies can generate revenue for
buildings - anywhere from several hundred dollars a square foot a month to as
much as $ 3,000 a month in Denver, depending on the location of space in the
building and the negotiations, said Jonathan Talbott, at Daniel Mann Johnson
& Mendenhall Inc., an architectural engineering firm.
In cities such
as Chicago, the revenue can reach $ 1 million a year per building, Bassett said.
GRAPHIC: PHOTOS: Denver Post Photos/Shaun Stanley Lyla
Gambow, property manager with Transwestern Commercial Services, poses at the
Mellon Financial Center in Denver, which has leased rooftop space to telecom
companies. Access to building interiors by US West rivals is causing
controversy. Microwave dishes and other devices top the Amoco Building in
Denver. Building owners contest telecom firms' demands for unfettered access to
their properties.
LOAD-DATE: June 09, 1999
