by David E. Bronston and Jeffrey A. Moerdler1
On November 20, 1998, the Federal Communications
Commission amended a rule that gives renters in residential multi-dwelling
units, under certain circumstances, the right to install a small
satellite dish antenna to obtain access to direct to home satellite
television services. The FCC's objectives are to promote competition
among multi-channel video providers and to provide viewers with access
to multiple choices for video programming. At the same time, the
FCC recognizes that there are competing perspectives on this issue
and indicates that it is attempting to strike a balance between the
interests of tenants, on the one hand, who desire maximum access
to video programming services and providers, and landlords, on the
other hand, who desire to retain control over access to and use of
their property. This change extends a rule adopted in 1996 with respect
to owned real estate so that it now applies to leased real estate
and, in particular, leased residential multi- dwelling units.
The theory behind this rule is that the
Telecommunications Act of 1996 was intended to increase access to
telecommunications services for all viewers and that there should
be no discrimination among viewers based upon their choice of residence
status as tenants, condominium unit owners or cooperative apartment
owners rather than as homeowners. Such distinctions would deprive
almost a quarter of the viewing public of access to these services.
The amended rule prohibits property owners
from unreasonably restricting tenants from having a satellite dish
on premises that is within the leasehold and under the exclusive
use or control of the tenant. These premises include balconies, balcony
railings, terraces, patios, yards or gardens but do not include outside
walls, roofs (other than those under a tenant's exclusive control),
window sills or other common areas. The amended rule gives the non-cable,
direct broadcast satellite television businesses a new competitive
beachhead as they land on a small part of the rental multiple dwelling
unit market.
The rule preempts local governmental regulations
and language in leases that restricts tenants from installing dishes
or other satellite TV reception antennas that are less than one meter
either in diameter or measured diagonally. The FCC tried to balance
the desire to increase competition in the delivery of multi-channel
video programming and the legitimate concerns of property owners.
As a result, the rule is far from a carte blanche for tenants to
start drilling and erecting antennas. It must be noted that the rule
does not require property owners or any other parties to take affirmative
action to enable a tenant or other viewer to receive these type of
video programming, the rule merely overrides certain types of governmental
and lease restrictions.
There are many practical and legal limitations
and implications of which property owners, property managers and
tenants must be aware.
Location and
Installation
Most of the direct broadcast satellite
services require a clear view of the southwest sky to receive transmissions
from their satellites. Accordingly, to take advantage of this rule,
the tenant must have a balcony, terrace, patio or yard that has a
clear view of the southwest sky. Tenants and property owners must
also review the lease to determine if the balcony, terrace, patio
or yard is specifically included within the description of leasehold
premises under the tenant's exclusive control and is not a common
area. The rules do provide that installations of these "pizza
pan sized" reception devices inside the leasehold, such as antennas
inside a window, are permitted and this equipment is under development
but is not yet commercially available. Property owners should take
a proactive position and notify and inform tenants that they have
a right to install this equipment only in the delineated areas and
not on windows, window sills, walls, poles or other structures.
Liability
The FCC clearly stated that because the
areas where installation is permitted are under the exclusive control
of the tenant, the tenant should be responsible for any liability
arising from such an installation. Property owners again should be
proactive by obtaining evidence of liability insurance as well as
indemnification protection.
Property Damage
It is very likely that landlords can require
that all installations must be non-invasive. Property owners should
be able to prohibit drilling holes in walls, using nails or screws
or piercing roofs. According to a major provider of satellite television
services, cable devices exist for sliding glass doors and windows
that permit cable wiring from the dish to the television to be brought
inside without damaging the walls, doors or windows. In addition,
property owners should be able to prohibit the mounting of any dish
in a manner that will cause any damage more than ordinary wear and
tear. The FCC indicated that clamps or straps are the type of installation
that will be permitted. Again, the leases should be reviewed to be
sure that there is agreement by the tenant not to make physical modifications
to the premises in connection with any dish installations. A property
owner should also consider having its staff inspect any installation
and reinspect periodically to be sure that there is no damage to
the building and that the equipment is secure.
Safety
The FCC rule pre-empts both local governmental
and landlord restrictions on these types of dishes but the rule also
contains an exemption allowing reasonable regulations that are designed
to accomplish legitimate safety protections or historic preservation
in a fashion that is not discriminatory and no more burdensome than
necessary to achieve the objective. For example, a prohibition by
a landlord on attaching an antenna to a fire escape, even if the
fire escape is under the tenant's exclusive control, should be upheld
as a reasonable safety regulation.
Economic Impact on
Property Owners
To a limited degree, this rule may reduce
the income that the property owner may derive from the property.
To the extent that a property contains a central antenna system or
a video programming service for which a fee is either paid to the
property owner or paid to a service provider who in turn pays a fee
or rental to the property owner, allowing a tenant to install its
own antenna may reduce that income. The impact is likely to be minimal
since inertia, the cost involved in installing an antenna where service
is already available and the need to have an appropriate balcony
or other location to install the antenna should minimize the impact
if any.
Exclusive Contracts with Cable
Companies
Exclusive contracts with franchised cable
companies are not permitted in New York under Public Service Commission
rulings. The FCC rules will certainly negate any exclusive arrangement
between landlords and franchised or private cable companies. Tenants
will have the right to choose whether they want traditional cable,
satellite or over the air transmission or some combination. In New
York and eleven other jurisdictions, franchised cable companies have
a mandatory right of access to serve residential tenants even if
satellite service is practical in these buildings. While programming
from digital satellite services is generally greater, cable modem
service may be more desirable for broadband internet access. Satellite
programming now includes local programming due to recent changes
in the law, making it more competitive with traditional cable offerings.
Effective Date
The rules became effective on January
22, 1999. The Building Owners and Managers Association has filed
an appeal to the Federal Appeals Court in Washington to block the
rules. BOMA and other real estate industry representatives have been
steadfast in their opposition to any rules that give telecommunications
service provider's access to private property. They claim that such
rules are not in the FCC's jurisdiction but more importantly that
these rules constitute a "taking" in violation of their
private property rights under the Fifth Amend-ment. They see this
satellite dish ruling, notwithstanding all the qualifications put
on it by the FCC, as another step on the slippery slope to mandatory
open access to all private property and commercial and residential
multi-tenant units.
The brave new world of telecommunications
has taken another, albeit small, step forward. Stay tuned for further
developments.
1 David
E. Bronston is counsel to the New York Office of the Philadelphia
based law firm Wolf, Block, Schorr and Solis-Cohen LLP and is part
of its interdisciplinary telecommunications group. He is also former
General Counsel of the New York City Department of Information Technology
and Telecommunications and can be reached at dbronston@wolfblock.com.
Jeffrey A. Moerdler is the partner in
charge of the New York real estate group of Wolf, Block and is also
a member of its telecommunications group. He can be reached at jmoerdler@wolfblock.com.
