Service Agreements for Residential Buildings

Dramatic changes in the cable and telecommunications industry have created opportunities for private residential multi-dwelling unit (“MDU”) owners and managers. Traditional telephone companies are now offering cable services and incumbent cable operators are offering telephone services. Both sets of companies offer advanced high-speed broadband services. Add in the aggressive market expansion of satellite dish companies and the result is that many geographical areas have moved from a monopolistic to a competitive market in communications services. This competition extends to the “triple play” of services—TV, internet, and phone.

This competition in the communications industry has resulted in improved services and lower rates for all consumers.  In the context of MDU owners, however, the potential benefits are even greater. Rather than being forced to accept a bulk services package from a single provider, MDU owners can now obtain proposals from multiple providers and negotiate the best deal. Some of the benefits available to MDU owners include, but are not limited to, the following:

  • Discounted Services: Communications providers will agree to significant “volume discounts” in communications services to MDU buildings. Most MDU residents are not benefiting from these discounts to the extent available. These include significant discounts on all types of cable, internet and telephone packages.
  • Revenue Sharing: In addition to discounted services, MDU owners are typically eligible to receive a portion of the revenue received by cable, internet and telephone providers for current and future services. The key is to negotiate the best formula for revenue sharing and make sure it applies to a comprehensive list of revenue sources across all service lines.
  • Building Safeguards: It is essential to protect your building from the physical work that is performed by communications providers. This includes everything from structural changes to the equipment closet to the rewiring of common areas and individual residential units.
  • Legal Protections: Service agreements offered by communications providers are typically one-sided and minimize the legal rights of the property owner. From insurance requirements to limitations on liability to protection of building easements, it is critical for MDU owners to be legally protected.

The key is to obtaining these benefits is to know the policies and negotiating tactics of the communications providers and to know the laws and regulations that apply to MDU agreements.  For example, MDU owners are prohibited by the Federal Communications Commission (“FCC”) from entering into exclusive bulk services agreements, but they are legally permitted to enter into exclusive marketing agreements. It is also important to be familiar with the FCC’s Inside Wiring Rules to be able to protect the private property of the MDU owners.

The Cohen Law Group knows that laws and regulations that apply to MDU agreements and has extensive experience negotiating with all communications providers. We negotiate all forms of agreements—including access agreements, bulk services agreements and marketing agreements—in the best interests of our clients to maximize their financial benefits and to fully protect their private property.