introduction

The Real Access Alliance (the “RAA” or the “Alliance”)[1] submits these Comments in response to the the Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications issued by the National Telecommunications and Information Administration (the "NTIA").The Alliance is a coalition of eleven trade associations representing approximately one million members engaged in all aspects of the real estate industry.The Alliance was formed to encourage free market competition among telecommunications companies for services to tenants in commercial and residential buildings, and to safeguard the constitutional property rights of America's real estate owners.With the development of a competitive telecommunications market to replace the traditional single-provider market of the past, building owners have faced new demands from both tenants and telecommunications providers.The real estate industry has responded by doing what it does best:serving the needs of tenants.In the same fashion, as demand for broadband services grows, building owners will respond by ensuring that their tenants have access to the facilities and services they want.

The RAA supports rapid deployment of broadband networks and advanced telecommunications as a means of meeting tenant needs.The experience of the real estate industry since the advent of telecommunications competition indicates that market forces can accomplish that goal.Accordingly, the RAA urges the NTIA to support market-based solutions for the telecommunications and real estate sectors.

In these comments, the Alliance hopes to give NTIA the benefit of the real estate industry's experience in the development of the present telecommunications marketplace.The Alliance will respond to several specific questions asked in the Notice, and also will inform NTIA of the views expressed by the Alliance in various proceedings at the Federal Communications Commission (the "FCC") that have addressed related issues.In particular, the Alliance urges NTIA to avoid any forced access policy, in which the Federal government might attempt to grant telecommunications providers the right to install their facilities on private property over the objections of the property owner.

I. THE REAL ESTATE INDUSTRY SUPPORTS DEPLOYMENT OF BROADBAND SERVICES BY THE FREE MARKET.

The real estate industry is competitive, dynamic, and responsive to tenant demands.In fact, few industries are as competitive or entrepreneurial as real estate.The relative ease of entry into the real estate market means that established players are always looking over their shoulders – or across the street – to see what the competition is doing. The existence of thousands of competitors of all sizes, scattered throughout every community, makes the industry a model of free market economics.[2]As a result of that high level of competition, building owners constantly monitor market trends to identify the services and capabilities desired by tenants.[3]

Broadband networks offer businesses and individuals the potential to increase productivity and improve quality of life in many ways.Access to broadband networks thus is likely to be a high priority for many building tenants, if not now, then in the near future.Therefore, the real estate industry strongly supports the growth of broadband services, just as it has supported the development of competition for telecommunications services.[4]

The RAA believes strongly that market forces will prevail and consumers will continue to get the services they want and need, provided that the government does not intervene in harmful or inappropriate ways.

II. REGULATION SHOULD NOT INTERFERE WITH PRIVATE PROPERTY RIGHTS.

The passage of the Telecommunications Act of 1996 (the “1996 Act”), created a new environment for the telecommunications industry.Long dominated by monopoly providers, and hence highly regulated, the industry was to be deregulated in an effort to promote an industry-wide restructuring that would in turn introduce all the benefits of the competitive marketplace to the industry.Given the complexity of the new legislation and the attendant issues, it was not surprising that the FCC would embark on dozens of rulemaking proceedings in an effort to implement the will of Congress.

What was surprising, however, was that the real estate industry quickly found itself swept into the FCC’s regulatory maelstrom.Within a few months of the passage of the 1996 Act, at least five separate FCC proceedings were underway that threatened the interests of property owners, even though the 1996 Act nowhere directs the FCC to regulate the real estate industry.[5] In one form or another, all of these proceedings raised the possibility that the Commission would force property owners to permit the installation of communications equipment on their property, over their objections.In each case, ignoring the irony of regulating the real estate industry in the course of deregulating the telecommunications industry, various parties sought to obtain the right to install communications equipment of various kinds ?? including cable television wiring, telephone wiring, direct broadcast satellite dishes, and other types of antennas ?? in or on the property of third parties.Recognizing that it was treading on new and dangerous ground, the FCC either rejected these approaches or delayed a decision by seeking additional comment.[6]

In response, the Alliance submitted thorough and detailed analyses of the Constitutional, legal and factual issues surrounding access to private property by telecommunications providers.[7]In these comments, the Alliance conclusively demonstrated that regulation of access to buildings is unnecessary because the market is in fact working.The Alliance also demonstrated that forced access regulations would be unconstitutional.Finally, the Alliance argued that forced access regulations would distort the free market by implicitly subsidizing telecommunications providers.

A. Forced Access to Buildings Is Unnecessary Because the Real Estate Industry is Meeting Tenant Demands for Telecommunications Services.

The RAA has submitted several analyses to the FCC, all demonstrating that building owners and managers have strong incentives to ensure that their tenants have access to their choice of telecommunications providers, and that tenants in fact have that access.Any delay in deployment of services is based on economic and technological factors peculiar to the telecommunications industry, and not on the behavior of third parties.

The most recent study submitted by the Alliance is a survey of tenants in commercial buildings conducted in early 2001.Knowledge Systems and Research, Inc. (“KS&R”) contacted tenants nationwide on behalf of the Alliance.[8]The survey, which had a margin of error of +/-4.6%, found:

Ø97% of all business tenants were “satisfied” or “somewhat satisfied” with their current telecommunications service. 94% stated that they had no telecommunications needs that were not being met at their current location.

Ø91% of all business tenants were aware that they can choose alternative telecommunications providers, and 23% actually placed a request for service with such a company in the last year.

ØThe vast majority of business tenants who chose an alternative provider were able to receive service from the alternative provider and were satisfied with their alternative service.

ØOnly three respondents – one percent of the total sample -- reported that building management had ever denied a request to obtain service from a telecommunications provider not already servicing the building.

ØA substantial percentage of business tenants – 39% -- would move at the end of their leases if their telecommunications needs could not be met at their current locations.

ØThe median lease term of respondents was three years, and the median time remaining on their leases was one year.

This survey demonstrates that property owners are ensuring that tenants receive the telecommunications services they desire, including broadband services.

B. The FCC Has Recognized that Forced Access to Property Presents Many Legal and Constitutional Issues.

Agreements between property owners and telecommunications providers for access to buildings can take many forms, but they all have one characteristic in common:they are all agreements for the use or occupation of real property.Consequently, whether they be leases, licenses, easements, or some other form of agreement, such transactions are governed by state law property principles.In addition, the rights of property owners are protected by the Fifth Amendment to the United States Constitution, as well as by the parallel provisions of state constitutions.And, as a general rule, federal agencies do not have broad authority to regulate the real estate industry or condemn property. Thus, any attempt to regulate access to property is not only inherently suspect as a potential taking, but analytically difficult and complex.

The RAA has submitted several constitutional analyses to the FCC, which demonstrate that mandatory access regulation would violate the Fifth Amendment.[9]After long and careful study, the FCC itself has recognized the risks inherent in adopting such rules.[10]Finally, a Massachusetts court recently struck down state forced access regulations as violations of the Fifth Amendment.[11]

C. Building Owners Must Be Able To Preserve the Security and Safety of Buildings and their Occupants.

Building owners and managers have a great many responsibilities that can only be met if they can control access to their properties, including compliance with safety codes; ensuring the security of tenants, residents and visitors; coordination among tenants and service providers; and managing limited physical space.Burdensome regulation would not only harm property owners, but tenants, residents, and the public at large.

Safety Code Compliance.Building owners are the front line in the enforcement of fire and safety codes, but they cannot ensure compliance with code requirements if they cannot control who does what work in their buildings, or when and where they do it.For example, building and fire codes require that certain elements of a building, including walls, floors, and shafts, provide specified levels of fire resistance based on a variety of factors, including type of construction, occupancy classification, and building height and area.In addition, areas of greater

hazard (such as storage rooms) and critical portions of the egress system (such as exit access corridors and exit stairways) must meet higher fire resistance standards than other portions of a building. Building management must retain control over access to buildings to prevent untrained personnel from compromising the integrity of fire?resistance-rated assemblies.Telecommunications service personnel generally are not trained to recognize the importance of such elements in a building’s construction, much less to accurately assess the types of assemblies they are penetrating or assuming any responsibility as to code compliance.

Occupant Security.Building operators are also concerned about the security of their buildings and their tenants and residents, and in certain circumstances may be found legally liable for failing to protect people in their buildings.Telecommunications service providers, however, have no such obligations.Service technicians may violate security policies by leaving doors open or admitting unauthorized visitors; they may even commit illegal or dangerous acts themselves.Consequently, any maintenance and installation activities must be conducted within the rules established by a building’s manager, and the manager must have the ability to supervise those activities.

Effective Coordination of Occupant Needs.A building owner must have control over the space occupied by telephone lines and facilities, especially in a multi-occupant building, because only the owner or manager can coordinate the conflicting needs of multiple tenants or residents and multiple service providers.

Effective Property Management.A building has a finite amount of physical space in which telecommunications facilities can be installed.Even if that space can be expanded, it cannot be expanded beyond certain limits, nor can it be expanded without significant expense.Installation and maintenance of such facilities involves disruptions in the activities of tenants and residents and damage to the physical fabric of a building. Telecommunications service providers have little incentive to consider such factors or to correct damage caused in the course of their work because they are not be responsible for any ill effects.

D. Efforts To Mandate Entry Will Distort the Free Market and Effectively Subsidize a Handful of Providers.

Granting providers special rights when seeking access to buildings would amount to an implicit subsidy of the telecommunications industry by the real estate industry.Whether forced access regulation deals with the amount of compensation that a building owner may charge, the specific terms of a provider's occupancy of a building, or the timing of negotiations, the result is the same:Government regulation distorts the free market by giving one party an advantage in negotiations.Because that advantage ultimately has a value in dollars, such government regulations amount to hidden subsidies.One of the fundamental principles of market economics is that subsidies -- especially hidden subsidies -- are generally bad policy, and should be avoided.The elimination of implicit subsidies was also one of the purposes of the 1996 Act.Therefore, government regulators should not interfere in the market negotiation process between building owners and telecommunications providers.

III. THE RAA HAS DEVELOPED EXTENSIVE EXPERIENCE WITH SEVERAL OF THE SPECIFIC ISSUES RAISED IN THE NTIA NOTICE.

Most of the questions asked in the Notice fall outside the scope of the RAA's expertise.In several instances, however, the RAA's experience may assist NTIA in formulating policies regarding broadband deployment.

A. Access For All Is an Important Goal (Notice Question D).

One of the continuing concerns of building owners in rural areas and in many smaller urban areas is the ability to attract broadband service and competitive telecommunications services.Even buildings in large urban communities may have trouble attracting such services, if they are outside of the central business district, or if the building is relatively small.A continuing lack of new services would harm both tenants and owners of such buildings, because they would become less competitive and less efficient than companies that are located in areas served by broadband networks.

The KS&R survey, however, actually indicates that broadband facilities in commercial buildings have achieved a relatively high penetration rate, considering the relative youth of the technology.Twenty-seven percent of respondents stated that they were currently subscribing to cable modem service, and 18% stated that they had a DSL connection.Furthermore, the vast majority of businesses stated that they were receiving all the telecommunications services they needed.Of the handful (six percent of respondents) who stated that their needs were not being met, the largest single complaint was lack of a DSL connection.

Access for all remains an important policy for numerous reasons.Reducing constraints on the operation and growth of individual businesses offers employers a broader choice of locations.If more businesses can operate profitably in smaller or more remote communities, the strain on the resources of larger communities -- such as transportation and other factors that affect the quality of life -- can be alleviated.Promoting access for all, however, must be based on sound economic principles.Accordingly, any federal policy must take into account current levels of demand, and must avoid imposing undue burdens on property owners or implicitly subsidizing telecommmunications providers.

B. Distinguishing Between Legacy Non-Broadband Facilities and New Facilities Would Promote Competition and Therefore Benefit Tenants and Property Owners (Notice Question F).

The chief constraint on the development of competition in the telecommunications marketplace is the lingering shadow of the incumbent local exchange carrier ("ILEC") monopoly.The ubiquitous presence of the ILECs in the market gives them great power over building owners, because tenants so often demand service from an ILEC.An ILEC can effectively refuse to serve a building if it does not receive the conditions it demands from the building owner.Such conditions can include free use of space in the building for installation of new facilities, which impose greater costs on building owners than traditional copper networks.For example, an owner may be required to build an expanded equipment room to house fiber optic transmission equipment, including additional air conditioning capacity to cool that equipment, all at its own expense.Distinguishing between traditional copper facilities and new fiber optics would not only help put competitors on a more equal footing, but might also permit building owners to manage their property more efficiently and equitably.

C. Competitive Carriers Have Only Limited Facilities in Secondary Markets (Notice Question G).

The RAA believes, based on anecdotal reports from property owners, that the smaller a city, the less likely there is to be a competitive alternative to the ILEC and the less likely broadband service is to be available.To the extent that businesses report that their current needs are being met, as discussed above, this may not be an immediately pressing issue.On the other hand, if demand for broadband services increases in the near future, it appears that it will be difficult to meet that demand with existing infrastructure.

D. Building Owners Grant Access to Wireless Providers (Notice Question I).

The Notice asks whether regulatory changes are needed to facilitate growth in wireless and satellite services.From the perspective of property owners, the key issues are the same for all providers, regardless of how their services are delivered:owners must be allowed to control the safety and security of building and occupants, and obtain fair market compensation for use of property.Consequently, the RAA does not believe that any regulatory changes are needed that would affect the relationship between wireless and satellite providers on the one hand and property owners on the other.

E. Any Preemption of State or Local Requirements Must Be Narrowly Drawn to Avoid Affecting Private Property Rights (Notice Question L).

Building access agreements are private contracts, and should be respected as such.Although enforceable in state courts, they are not state or local legal requirements.Consequently, any effort to preempt state or local laws must be carefully drafted to ensure that it does not inadvertently affect private property owners.Similarly, access rights within private buildings have not traditionally been considered "rights-of-way," and any attempt to regulate public rights-of-way must clearly differentiate rights to use private property.

F. Access to Federal Property Should be Governed by the Same Market Principles that Govern Access to Private Property (Notice Question M).

The General Services Administration has a very effective program for providing competitive services to federal tenants.No new regulation is needed at this time.

CONCLUSION

The real estate industry supports rapid deployment of broadband services for our tenants.NTIA and Administration policy, however, should respect private property rights and free market principles.

Respectfully submitted,

_________________________________

Matthew C. Ames

MILLER & VAN EATON, P.L.L.C.

Suite 1000

1155 Connecticut Avenue, N.W.

Washington, D.C.20036-4306

Telephone:(202) 785-0600

Fax:(202) 785-1234

Attorneys for the Real Access Alliance

December 19, 2001

7379\86\MCA00879.DOC

Of Counsel:

EXHIBIT A

MEMBERS OF THE REAL ACCESS ALLIANCE

·The Building Owners and Managers Association, International (“BOMA International”) is an international federation of 101 local associations. BOMA International’s 17,000 members own or manage more than 8.5 billion square feet of downtown and suburban commercial properties and facilities in North America and abroad.The mission of BOMA International is to advance the performance of commercial real estate through advocacy, professional competency, standards and research.

· The Institute of Real Estate Management (“IREM”) educates real estate managers, certifies the competence and professionalism of individuals and organizations engaged in real estate management, serves as an advocate on issues affecting the industry, and enhances and supports its members' professional competence so they can better identify and meet the needs of those who use their services.IREM was established in 1933 and has 10,000 members across the country.

·The International Council of Shopping Centers (“ICSC”) is the trade association of the shopping center industry.Its 38,000 members in the United States, Canada, and more than 70 other countries represent owners, developers, retailers, lenders, and all others having a professional interest in the shopping center industry.ICSC’s 34,000 United States members represent almost all of the 43,661 shopping centers in the United States.

·The Manufactured Housing Institute is the leading national trade association for manufactured housing.It represents all segments of the industry, including manufacturers, component suppliers, retailers, community owners and operators, state associations, and those financial institutions involved in the lending and insuring of manufactured homes.

·The National Apartment Association (“NAA”) has been serving the apartment industry for 60 years.It is the largest industry-wide, nonprofit trade association devoted solely to the needs of the apartment industry.NAA represents approximately 27,600 rental housing professionals holding responsibility for more than 4.38 million apartment households nationwide.

·The National Association of Home Builders (“NAHB”) is a federation of more than 800 state and local home builder associations nationwide, working to enhance the political climate for housing and for the building industry, and promoting policies that keep housing a national priority.NAHB’s members are engaged in all aspects of real estate development, ownership, and management, and include owners and managers of apartment buildings, condominiums, cooperatives, and community associations.NAHB is comprised of over 203,000 members, who collectively employ over eight million Americans.

·The National Association of Industrial and Office Properties (“NAIOP”) is the trade association for developers, owners, and investors in industrial, office, and related commercial real estate.NAIOP is comprised of over 9,500 members in 46 North American chapters and offers its members business and networking opportunities, education programs, research on trends and innovations, and strong legislative representation.

·The National Association of Real Estate Investment Trusts is the national trade association for real estate investment trusts (REITs) and publicly-traded real estate companies.Its members are REITs and other businesses that own, operate, and finance income-producing real estate, as well as those firms and individuals that advise, study and service those businesses.

·The National Association of Realtors (“NAR”) is the nation’s largest professional association, representing more than 720,000 members.Founded in 1908, the NAR is composed of residential and commercial realtors who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.The association works to preserve the free enterprise system and the right to own, buy, and sell real property.

·The National Multi-Housing Council (“NMHC”) represents the interests of the larger and most prominent firms in the multi-family rental housing industry.NMHC’s members are engaged in all aspects of the development and operation of rental housing, including the ownership, construction, finance, and management of such properties.

·The Real Estate Roundtable (“RER”) provides Washington representation on national policy issues vital to commercial and income-producing real estate. RER addresses capital and credit, tax, environmental, technology and other investment-related issues.RER members are senior executives from more than 200 U.S. public and privately owned companies across all segments of the commercial real estate industry.

[1] The members of the Real Access Alliance are: the Building Owners and Managers Association International, the Institute of Real Estate Management, the International Council of Shopping Centers, the Manufactured Housing Institute, the National Apartment Association, the National Association of Home Builders, the National Association of Industrial and Office Properties, the National Association of Realtors, the National Association of Real Estate Investment Trusts, the National Multi-Housing Council, and The Real Estate Roundtable. The real estate industry contributes over eleven percent of the nation’s Gross Domestic Product. Industry Accounts Data, Gross Domestic Product by Industry United States Department of Commerce, Bureau of Economic Analysis, (1995) (http:// www.bea.doc.gov//bea/du2/gposhr.htm).The description of each of the Alliance’s members in Exhibit A illustrates the magnitude of the interests that might be affected by this proceeding.

[2] The federal government has already recognized the high level of competition in the real estate industry.In 1996, the Federal Trade Commission modified its premerger notification rules to exempt the real estate industry.Premerger Notification, Reporting and Waiting Period Requirements, 61 Fed. Reg. 13666, 13674 (March 28, 1996).The FTC concluded that the real estate industry was sufficiently competitive that no single entity is likely to have enough market concentration to trigger antitrust concerns. The residential marketplace is even less concentrated.Furthermore, owners of rental property compete not only with each other, but also with all the businesses and public sector entities that own their own buildings and have the option of expanding existing buildings or constructing new ones.

[3] The FCC has recognized that building owners have strong incentives to meet their tenants’ demands for telecommunications services.See Inquiry Concerning the Deployment of Advanced Telecommunications Capability, Report, CC Docket No. 98-146, 14 FCC Rcd. 2398 (1999), at ¶ 103; Telecommunications Services – Inside Wiring, CS Docket No. 95-184 and MM Docket No 92-260, Report and Order and Second Further Notice of Proposed Rulemaking, 13 FCC Rcd 2659, 10 Comm. Reg. (P&F) 193 (1997), at ¶ 178.

[4] See, e.g. Statement of Brent Bitz before the House Subcommittee on Telecommunications, Trade and Consumer Protection (May 13, 1999), attached as Exhibit B; Statement of Jodi Case before the House Subcommittee on Telecommunications, Trade and Consumer Protection (May 13, 1999), attached as Exhibit C.

[5] See Preemption of Local Zoning Regulation of Satellite Earth Stations, IB Docket No. 95?59, Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 5809 (1996); Implementation of Section 207 of the Telecommunications Act of 1996, CS Docket No. 96?83, Notice of Proposed Rulemaking, 11 FCC Rcd 6357 (1996) (later combined with Docket No. 95?59); Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96?98, Notice of Proposed Rulemaking, 11 FCC Rcd 14171 (1996); Telecommunications Services Inside Wiring, Customer Premises Equipment, CS Docket No. 95?184, Notice of Proposed Rulemaking, 11 FCC Rcd 2747 (1996); Implementation of the Cable Television Consumer Protection and Competition Act of 1992: Cable Home Wiring, MM Docket No. 92?260, Order on Reconsideration and Further Notice of Proposed Rulemaking, 11 FCC Rcd 4561 (1996) (later combined with Docket No. 95?184).

[6] See, e.g., Telecommunications Services Inside Wiring Customer Premises Equipment, CS Docket No. 95?184, Report and Order and Second Further Notice of Proposed Rulemaking, 13 FCC Rcd 3659 at ¶¶ 59-61, 178 (1997).The only instance in which the FCC has adopted such a policy in its implementation of Section 207 of the 1996 Act, which prohibits restrictions on the installation of video receiving antennas.

[7] See, e.g., Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99?217, Joint Comments of the Real Access Alliance (filed Aug. 27, 1999); Joint Reply Comments of the Real Access Alliance (filed Sep. 27, 1999); Further Comments of the Real Access Alliance (filed Jan. 22, 2001); Further Reply Comments of the Real Access Alliance (filed Feb. 21, 2001).

[8] A summary of the survey results is attached as Exhibit D.

[9] See, e.g., Exhibit E, [Part 2, Part 3]Constitutional Analysis of the FCC's Notice of Proposed Rulemaking, FCC 99-141, originally submitted as Exhibit E to Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99?217, Joint Comments of the Real Access Alliance (filed Aug. 27, 1999); and Exhibit F, Memorandum to FCC Chairman Kennard from Harvard Law Professor Lawrence Tribe (August 8, 2000).

[10] See, e.g., Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99?217, Notice of Proposed Rulemaking, 14 FCC Rcd 12673, 12704-12705 (1999); Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99?217, First Report and Order, 22 CR 1 (P&F), 28-30 (2000).

[11] Greater Boston Real Estate Bd., et al. v. Massachusetts Department of Telecommunications and Energy, et al. (Mass. Sup. Ct., No. 00-4909, July 27, 2001).