WHY IS THE CABLE COMPANY BOTHERING ME, AND WHAT IS AN ROE/ACCESS AGREEMENT?
ROE stands for “Right of Entry”, which is the same agreement as the “Access Agreement”. This agreement breaks out the specific terms under which a cable company may cross the owner’s (private owner or HOA) private property to provide service to an individual resident. In pure real estate law terms, it is illegal for a non-utility entity to cross the owner’s private property in order to offer service to a resident. Many of the ruling jurisdictions require that the cable companies have written, formal “Access Agreements” that will permit the cable provider to offer service to the resident. This requirement is why the cable companies may be reaching out to you to request you complete one of these agreements. When building owners fail to complete these agreements, the cable companies must decide if they will continue to offer service in violation of the law, and/or if they must terminate service to residents to whom the companies have a legal obligation to offer service. See the City of Seattle’s Franchise Agreement, section 10.2, Subparagraph D, for explicit obligations about the cable companies requirement to have written permission to connect to a building. This also provides a much deeper understanding about why the cable companies push for these agreements. Approximately 90% of the ROE and/or Access Agreement is the formalization of the Federal and Local obligations and requirements on the cable companies.
In the past, cable companies would offer an “Exclusive Access” agreement, which made it a contractual obligation for the building owner to not allow any other providers into the building. This was prohibited by the FCC in its 2007 rules. An interesting look at that process can be found in this FCC Word Document. Today, no agreements are offered by cable companies that require an “Exclusive Access” agreement, although the phrase “Exclusive” may be found when discussing marketing and/or use of wiring, which has been deemed acceptable by the FCC.
WHO REGULATES THE CABLE INDUSTRY?
The cable industry is regulated by two different governmental jurisdictions:
The Federal Communications Commission is the federal regulatory agency who dictates what cable (and other service) providers must do. The regulations are very detailed and extensive, and are beyond the scope of most non-FCC Attorneys and/or non-FCC students. Most of the items contained within the “ROE” is an attempt to remain in compliance with the FCC’s legal requirements that allow the cable providers to offer services to the public. Some of the issues regulated here include:
Signal leakage
Definitions, use, and maintenance of wires
The local jurisdictions also have a regulatory effect on what the cable companies can and must do. These are done through the “Franchise Agreement”, which is a written agreement that allows the cable company to utilize the utility trenches controlled by the jurisdiction in exchange for public services and/or money paid to the jurisdiction. Some of the issues regulated in the Franchise Agreement include:
Time frames required to respond to customer service complaints
Rate Restrictions
Public Access Channels
Both of these legal regulatory requirements include written agreements where the cable companies MUST sign and comply, or their ability to conduct business will be revoked. This is the foundation of most aspects of the ROE. Building owners and/or Attorneys will often try to get the cable companies to modify these obligations, and are greatly frustrated when the cable companies cannot create these changes. Cable companies will not put themselves into legal jeopardy between governmental agencies and building owners. Understanding how far to push based on where these legal lines are is critical to successful negotiations versus an agreement that sits in the “contract abyss”.
WHAT ARE SOME USEFUL LINKS?
WHAT IS “AMENITY SERVICE”…AKA “BULK SERVICE”?
Whenever a cable company offers a discounted service to 100% of the residents of a building and/or association, defined as “Amenity Service” or “Bulk Service”, the service agreement that defines those services will include the “Access” agreement. As such, these two items are frequently joined into one agreement and are typically confused by the building owner.
“Bulk Service” is a commercial agreement (as opposed to a retail agreement) between the owner of multiple residential units (apartments or HOA) for the cable provider to provide a significantly discounted price for service whose rate is regulated by the regulatory agencies. This is one of the few times when a cable provider can offer long-term discounted rates without violating other commitments made to regulatory agencies. This type of service includes and/or requires:
100% of the available units within a building and/or HOA
Services are paid for by the building owner and/or HOA
Includes an annual increase percentage rate
Is for multiple years
The “Bulk” agreements have many aspects. The CCNG team are experts in obtaining the lowest possible rates for the exact services desired by the building owner and/or HOA. If you would like to learn more, please contact our team for more information.
SHOULDN’T WE USE AN ATTORNEY?
The question is what are you trying to accomplish? Attorneys are ideal when language needs to be carefully crafted to ensure a limit to legal liability. For that purpose, attorneys are paid regardless of the negotiated points. Unless an attorney has strong expertise in FCC rules, Franchise agreements, and current cable company operating procedures, an attorney may not be the best negotiator to ensure the building owner and/or HOA is getting the best deal. For instance, most attorneys can’t immediately tell you the FCC definitions of:
Cable Home Wiring
Cable Home Run Wiring
Distribution Wiring
The modern interpretations of where these parts of the wiring systems start and stop (I.E., the “Sheet Rock” Rule)
Attorneys are critical in certain cases where there is a unique situation where very specific language must be used. In these events, CCNG has attorneys to whom we can refer building owners and HOAs to accomplish the exact need without trying to negotiate deal points that create conflict between the cable companies and the federal/local governments.
One example of language that needed to be modified was a situation where the building owner had legal obligations to a local city due to the ownership’s control of a historic tree. Attorneys were required to modify the language that allowed the cable company to trim this tree. The modified agreement allowed for a clean process where the cable company would protect its needs for access and maintenance while still protecting the owner’s legal requirements to the city to protect the historic tree.
CCNG are not attorneys, and cannot legally change language on an agreement. CCNG can, however, inform the cable company of what is acceptable and what isn’t acceptable based on the standard agreement forms that the cable companies provide. Any language changes would result in a referral for the building owners and/or HOAs to an attorney for that specific purpose.
WHY SHOULDN’T MY APARTMENT MANAGER AND/OR HOME OWNERS ASSOCIATION MANAGER NEGOTIATE THIS AGREEMENT?
In a word – expertise. Most managers will not look at a building’s roof, and then give a firm price quote and repair that roof. Instead, the manager will schedule a contractor to handle that service. Likewise, ROE agreements are beyond the scope of expertise for most managers. It is unfair to the manager to ask them to negotiate something for which they have no training. Likewise, if the manager makes a mistake with the negotiating points, that error can fall back on the building owner and/or HOA as a hard cost to handle later – creating unknown liability for all parties. Managers generally don’t know how to use these agreements to increase the owner’s financial return. CCNG’s reports provide a solid logic for decisions that need to be made with defense for decisions to future stakeholders.
How can a mistake in negotiating these agreements result in financial damage for the building owner and/or HOA?
One example: Many buildings today have internal wiring that is 20 years old or older and is or is becoming damaged. When this is the case without competitive providers, it is often worth giving the cable company the rights for “Exclusive Use” of certain sections of wiring in order to ensure that cable provider will also “maintain” the wiring. In this scenario the financial rehab costs for the critical wiring system will become a contractual obligation of the owner….or the cable company..depending on the negotiated terms. Only a clear and knowledgeable understanding of the details will result in profitable decisions.
DO YOU WORK WITH APARTMENT MANAGERS AND/OR HOME OWNER ASSOCIATION MANAGERS?
Absolutely. In fact ROEs are generally not contemplated within the employment agreement between the building owners and the manager, and hence payment for the additional services of managing the process of negotiating these agreements is unclear in the employment contract. CCNG is staffed by multiple Washington State Managing Brokers, and CCNG does offer, with the approval of the building owner and/or HOA, a referral to licensed managers in recognition of the additional work these agreements require. These referrals are subject to the manager’s and the client’s disclosure and agreement, as per real estate disclosure laws. All of this is done to ensure the owner’s interests are the highest priority in the negotiations process.
CAN OUR PROPERTY MANAGER AND/OR ASSOCIATION MANAGER SIGN ON BEHALF OF THE OWNER, OR WOULD CCNG SIGN ON THE OWNER’S BEHALF?
CCNG will not sign any agreement on an owner’s behalf. CCNG’s role is to negotiate the agreement on the owner’s behalf and coordinate to get everything done with full disclosure to the owner. A property manager and/or association manager may sign if that manager is listed on the Washington State Secretary of State’s website as a Registered Agent and/or as an officer of the owning corporation.