Telecom Building Access Agreements: Useful Info for Building Owners and Managers
Designed to ensure that owners maintain control of their properties, a building access agreement describes the terms under which telecommunications and technology service providers have access to a building in order to meet their individual customers’ needs. The agreement can cover a single building or an entire portfolio of an owner’s properties. Some commonly asked questions about access agreements are addressed below.
Who can make a building access agreement?
The agreement is made between a commercial building owner, operator, or manager and the telecommunications and other information services providers.
- The owner. The owner may be represented by a professional telecommunications and information services manager with experience in successfully managing the telecom and IT infrastructure for other buildings. An access agreement could give the telecom manager “discretionary” authority to enter into access agreements on behalf of the owner, or it could give the authority to negotiate the access agreements while restricting the authority to legally bind the owner. In some cases, the telecom manager may sign the agreement on behalf of the owner.
- The provider. Most owners evaluate prospective service providers as they might a prospective tenant, because their creditworthiness, commercial viability, and quality of service will be important to the building, its tenants, and its owner.
What does an access agreement entail?
Typically it allows providers to use building risers and raceways to serve customers. It may also allow providers to use or occupy a building’s telecom closets, data centers, “meet-me” rooms, and other public utility spaces so that they can locate equipment on site.
What might a provider ask for in an access agreement?
Beyond the access and distribution rights and the ability to locate equipment in the building, providers may ask for a multitude of other items in the access agreement. For example, they may ask that:
- The owner designate the provider as the building’s sole “preferred provider” of telecommunications and information services, or one of the building’s several “preferred providers.”
- The owner distribute the provider’s sales materials in building leasing offices or other locations, or that the owner distribute these materials to incoming tenants.
- They have the right to put sales or information kiosks in the building, or to periodically host events in the building to raise awareness of their services.
Why is an access agreement necessary for owners?
From an owner’s standpoint, there are several reasons why an access agreement is necessary. It:
- Ensures that owners maintain control over their buildings — including the risers and raceways — and the utilities that service them. Since space in these areas can fill quickly, it is important for owners to make sure that any available space is given to those who can provide the most value to the building and its tenants.
- Enables owners to require cable abatement (as opposed to cable abandonment) when a provider discontinues use of a cable in a building’s risers and raceways.
- Ensures that any work on the premises is done in an appropriate manner, in keeping with insurance and indemnification requirements.
- May require providers to maintain certain quality standards in providing service to tenants, and to offer all tenants equal access to services.
- Can address any revenue opportunities in allowing providers to locate equipment on the premises.
- Provides proper indemnification in the event that something should go wrong.
Can access agreements generate additional revenue for owners?
Absolutely. Depending on applicable laws, an owner may be able to charge the provider a one-time fee for access and/or a monthly recurring fee for the connection into the building, as well as for access to and use of the building’s distribution systems. Payment arrangements can be structured as fixed-fee payments over time, or as a percentage of the provider’s profit from services provided to building tenants.
Do access agreements offer any other benefits to owners?
Yes. By having an agreement with a provider who has pre-wired a building, the owner can ensure that new tenants could have service turned on virtually immediately — an attractive marketing amenity. A provider might be willing to refer potential tenants to the owner, in exchange for customer referrals from the owner. Also, being publicly allied with a well-regarded provider can enhance an owner’s reputation.
How long do access agreements run?
Typically most access agreements run for at least five years, with the potential for automatic renewal. This is because tenants usually want to be assured that their provider will have the ability to continue providing undisrupted service for an extended period. To avoid costly interruptions in service, many providers will insist on a provision in the access agreement that allows them to continue to serve their existing customers upon expiration or termination of the agreement, under specific terms.
Does an access agreement limit the owner’s right to sell the building?
No. Some providers, however, may ask that their access agreement bind future owners of the property for the stated term. Although this is not necessarily an unreasonable request (providers would not want to lose their access rights and ability to serve current customers just because the building is sold), an owner might not wish to accede to this request.
What impact might there be on a provider if the owner acquires another property during the term of the access agreement?
Some providers may ask that the terms of the access agreement automatically cover any additional properties that the owner acquires during the term. This might be useful if the provider has an excellent track record and the owner would economically benefit from such an arrangement.
Are there standard forms of access agreements?
There is no “standard form” for an access agreement, although some providers and telecom managers have their own forms that they prefer to use. Some owners prefer to use their own form of lease or license agreement, with appropriate modifications. Others will negotiate a form tailor-made for each provider. Forms may be available (for a price) from online services or law libraries. Other resources for forms include communications consultants and lawyers who are familiar with leases and access agreements.
Who can help structure and negotiate an access agreement?
A telecom manager should have many of the resources you need. Your leasing specialists also may have had experience in negotiating access agreements. In addition, you might wish to consult with your attorney.
Where can I get more information?
Contact your RGTS account representative, who will be glad to assist you.