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Thousands of acronyms permeate the world of telecommunications services. A favorite acronym in the field is RTFM � read the fantastic manual � because invariably the answers to most technology questions are available in the manual. Unfortunately, no manual addresses the wide range of potential telecommunications pitfalls awaiting the modern real estate lawyer. This article, while not a manual, alerts lawyers to key issues to watch for when confronting a real estate project that involves telephone, video, Internet or wireless services � in other words, the vast majority of real estate transactions. Not long ago, traditional telephone service and cable television service were the primary telecommunications services real estate attorneys encountered. A real estate attorney could ignore such banalities with relative impunity. The past several years have seen the development of numerous new technologies that can significantly impact a real estate project. A majority of the newest alphabet soup of technologies are already being deployed in Texas: FTTP, aka fiber to the premises (Verizon and AT&T); FTTN, aka fiber to the node (AT&T); IPTV, aka Internet protocol television (AT&T); BPL, aka broadband over power line (Current Communications/TXU); WiFi, aka wireless fidelity (numerous providers); WiMAX, aka worldwide interoperability for microwave access (numerous providers); HSDPA, aka high-speed downlink packet access (Cingular); and EVDO, aka evolution-data optimized (Verizon Wireless). These increasingly complex technologies, and the often-baffling legal and regulatory framework that governs them, make it easy for an attorney to inadequately protect a client’s best interests, or worse, to expose the client to liability or negatively impact the value of the client’s project. Real estate attorneys typically encounter telecommunications issues during the acquisition and development phases of a project. During the acquisition phase, lawyers must scrutinize the terms of every existing easement, license, right of entry and service agreement with a telecommunications provider or utility. These documents often contain terms that can have a major impact on the development or redevelopment of a project. Failure to spot every issue can have significant consequences. Buyers whose lawyers don’t identify outstanding service agreements or easements on a parcel of land can end up captives of prior arrangements covering telecommunications access rights. If a buyer’s project is encumbered by, for example, a cellular rooftop antenna agreement, redevelopment efforts can be hindered, and architects may have to redraw plans to accommodate an unsightly antenna. During the development stage, lawyers must tailor properly any new easements and licenses with utilities and telecommunications providers.
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There is a growing trend of utilities requesting easements that grant the right to transport, provide and, in some cases, market a wide range of services. For example, some utility easements permit the transmission of “electricity and intelligence,” rather than just the transmission of electric energy. This permits the utility to provide and transport a virtually unlimited number of telecommunications services at, and across, a client’s project, with no safeguards to protect the client’s interests or prevent conflicts with rights granted to other communications providers. Sign Here Sometimes telecommunications providers show up at a project and inform the construction manager that certain documents must be executed to deliver service to the project. The documents often include an access easement that grants the provider overly broad rights, at no cost, for an extended period of time. The documents work their way up the chain of command, where attorneys regularly approve them and clients regularly execute them. However, these standard form documents can create defaults with other agreements, potentially gut a client’s ability to negotiate reasonable business terms in future access or service agreements, and may even prevent a client from acquiring desired services from an alternate provider. Therefore, the general rule is all real property grants to utilities or telecommunications providers benefit from tailoring. Limit the grant solely to the provision of the desired services, cover only a specified area (e.g., 6 feet centered over the provider’s conduit, rather than “in gross”), ensure that permanent structures are not disturbed except in a manner approved in advance by the client, and terminate all rights after a specified period of time or upon redevelopment of the project. The grant should not afford the provider any marketing rights, permit partial assignment or allow installation of any above-ground equipment without the client’s prior reasonable approval. If a provider demands seemingly unreasonable rights, request that the utility or provider identify the law or regulation that purportedly obligates the client to grant the requested rights. On a related note, the growing number of mixed-use projects in Texas raises a final easement issue. Mixed-use projects typically involve a multitude of different parcels and ownership entities. In many cases the telecommunications “head end” resides at a central location, and services are distributed throughout the project using shared telecommunications facilities. Consequently, in representing a mixed-use developer, an attorney needs to understand the anticipated telecommunications strategy and establish any easements necessary to ensure each parcel will be able to receive necessary services once different parcels are transferred. In representing a buyer of a parcel in a mixed-use project, an attorney should ensure the parcel will always have the ability to receive telecommunications services from the central facilities. A failure to secure the necessary easement rights can prove costly. Buyers who acquire a parcel without securing the necessary rights may be forced to build their own stand-alone communications infrastructure and negotiate with service providers to install facilities. One final area of concern involves telecommunications service agreements. Real estate attorneys adventurous enough to take on a telecommunications service agreement face a number of potential stumbling blocks, ranging from how services are defined, to what specific industry standards apply based on the technology deployed and the type of project, to what service level standards are appropriate and how those standards should be measured and enforced. To extract the most out of a telecommunications service agreement, lawyers must understand applicable telecommunications laws and regulations, and how communications systems (particularly the latest FTTP systems) are deployed and operate. Ian Davis is an associate with the telecommunications and real estate practice groups at Munsch Hardt Kopf & Harr

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