Washington, D.C. – With legal action pending in the Texas Court of Appeals, and forced access proponents still actively pushing their agenda in several states and at the federal level, the real estate industry’s recent victory in Massachusetts should help quell the debate.
On Nov. 27, 2002, the Massachusetts Supreme Judicial Court ruled in favor of property owners and building managers in a case involving state regulations granting telecom service providers mandatory access to private office buildings. The ruling determined that privately owned and managed buildings were outside the regulatory authority of the Massachusetts Department of Telecommunications and Energy (DTE).
The forced telecom access issue emerged in Massachusetts as a result of rules promulgated by the Massachusetts DTE, requiring owners of privately held commercial and multiple dwelling unit buildings to grant mandatory access to telecom service providers for the installation of their wiring and equipment. Plaintiffs representing the real estate industry argued that the DTE exceeded its authority because private buildings were outside the legislatively granted scope of the department’s authority. In agreeing with the plaintiff’s position, the court ruled the regulations were not statutorily authorized, effectively nullifying the application of the regulations to privately held office buildings.
The plaintiffs also argued that the DTE regulations were an unconstitutional taking of property without just compensation in violation of both the Massachusetts and United States Constitutions. In its long history of defending and protecting the private property rights of its members, BOMA has argued that forced building access violates the Fifth and Fourteenth Amendments to the U.S. Constitution. However, because the ruling declared the regulation did not affect private properties, the Supreme Judicial Court did not rule on the constitutionality of the regulation.
It is this constitutional question that is at the center of the case before the Texas Court of Appeals. At this time, there are two related cases in play in Texas. The first lawsuit, initiated by Texas BOMA, BOMA International, The Real Access Alliance, and others, questions the constitutionality of the Texas forced access legislation. In the first round, the Texas Public Utility Commission (PUC) won as expected when the district court upheld the constitutionality of the statute.
On Nov. 18, 2002, BOMA’s attorneys filed a brief in the Court of Appeals, a forum that will hopefully provide forced access opponents a good chance of securing a favorable ruling on the constitutional challenge. The court is expected to hear oral arguments early in 2003, with an appellate opinion rendered soon after. Regardless of the outcome, the ruling is expected to be challenged by the losing party.
The second case is the pending litigation before the Texas PUC and is between Time Warner and Tanglewood Properties. The case was filed after Time Warner filed a complaint with the Texas PUC, seeking forced access to a Houston office building. The building already had license agreements with 10 other carriers, the most recent ones having been executed for a monthly license fee of $1,000 or more. Time Warner had offered the building owner $87.50 per month and had demanded core-drilling rights before filing its PUC complaint against the building owner for refusing to accede to its demands.
This case has been vigorously fought on both sides since it was first initiated in September 2001. Even though an interim agreement had been reached whereby Time Warner could provide service to the tenant in the building at issue, Time Warner refused to delay the continuation of the proceeding while the constitutional challenge was pending. Most recently, the building owner, faced with mounting legal bills and a PUC order requiring forced access, has elected to execute a license agreement with Time Warner under the terms and conditions that Time Warner initially requested rather than litigate at the PUC over compensation issues. After tendering a license agreement to Time Warner, the building owner requested that the PUC proceeding be dismissed. Time Warner objected to the dismissal of the case even though it had been given everything that it had requested of the PUC. To-date, Time Warner has refused to sign the license agreement, speaking volumes about Time Warner’s interest in using this as a test case and as an example of what they intend to do or can do to property owners who refuse access on Time Warner’s terms.
These cases have national implications that are a potential threat to every building owner. BOMA International and its partners in this fight will continue to work to ensure that property owners cannot be forced to give up private property rights without due process and without sufficient compensation. The industry cannot allow Time Warner and potentially hundreds of other telecommunications companies to have a forced right of access into private buildings in the future under Texas law and under statutes of other states that are likely to be passed if the Texas statute is eventually declared constitutional by the United States Supreme Court.
Needless to say, the cost of waging this kind of legal battle is enormous when the stakes on both sides are this high. If you or your company would like to contribute to the legal fund, visit (www.texasboma.org/contrib_form.htm).
For more information on the issues discussed in this column, visit BOMA International’s website (www.boma.org) or call (202) 408-2662.