On May 21, 2009, at 12:39 PM, Brad Belton wrote:

> Your argument makes the assumption there are no other options for a  
> tenant
> other than the property in question.
>
No it doesn't make that assumption. Tenants make long term decisions  
related to property leases. In many cases, the tenant makes  
assumptions and expectations about their use of the property without  
getting those assumptions and expectations in a lease document.  
Further, the property owner does a similar thing and as such has  
certain liabilities that aren't protected in their leases. All of this  
is because generally the people negotiating the leases aren't savvy  
with technology.

A perfect case in point is Wi-Fi. I know of no major REITs that have  
clauses in their leases regarding Wi-Fi or indeed inference issues.  
Yet, every company I know plans to have a Wi-Fi network deployed in  
their leased space. Now if you assume that an MTU is going to have  
multiple tenants that all are going to deploy Wi-Fi in close proximity  
you have a natural interference issue. In fact, with today's 802.11N  
you now have less overlapping channels then you did before. Couple  
this with many "enterprise" Wi-Fi vendors including "rogue" AP  
detection and mitigation features that attempt to disable Wi-Fi APs  
over the air. Clearly a war is brewing between tenants' Wi-Fi networks  
that can only result in multiple tenants becoming unhappy with the  
interference. It will fall to the property owner to resolve the issue.  
Yet the property owner doesn't have any legal standing to force  
tenants to deploy their Wi-Fi networks in any particular way.

> This is really no different than restaurants that allow smoking vs.
> restaurants that don't allow smoking.  If you want to smoke you will  
> dine at
> restaurants that allow smoking and the ones that forbid smoking  
> won't get
> your business.  This works for the non-smokers too.  Personally I'm a
> non-smoker and dine at either smoking or non-smoking restaurants,  
> but we all
> know people that are adamant on both sides of the issue.
>
It is quite different actually. Again, telecom issues are almost never  
dealt with until after the lease has been signed. I can't tell you how  
many deals we get because tenants signed a lease and need telecom  
services delivered, but their preferred vendor is unable to deliver in  
time or in budget due to construction issues.

> Regarding your tenant lease renewal example, doubt the property  
> owner will
> make publicly known (regardless as to the reason) why he chooses not  
> to
> renew a tenant's lease.  Is there a law I'm unaware of that forces a
> landlord to give reason for not renewing a lease?  Eviction, sure,  
> but not
> for renewals.  Have you ever read a lease agreement closely?  They are
> always heavily weighted towards the landlord vs. the tenant as they  
> should
> be.  Again, there is nothing forcing a tenant to lease there as they  
> can
> always lease elsewhere.
>
I shutter to think about the shear number of lease agreements I have  
signed, so I have a pretty good idea about the process and standard  
terms. You argue the tenant will never know. Yet, my experience is  
that landlords are all to eager to tell a tenant why.

> There are many limitations that can prevent the number of providers  
> in one
> property.  Riser space or roof space may be limited among many other
> limitations.  Roof or other building warranties may be voided if the  
> new
> provider is negligent or even if they aren't negligent.  Insurance
> requirements will need to meet the property owner's requirements.  The
> property owner can essentially make it cost prohibitive for you to  
> enter the
> property if they choose to do so.
>
Maybe; I have never seen it with any large REIT. Little property  
owners often try and fail.

> Again, in the end the property owner will prevail as they should.   
> It is
> after all their property and they should have final say what happens  
> to
> their property.  If their decisions are poor and result in lost lease
> revenue than they'll be gone soon enough and maybe the new owner  
> will see
> the benefit to allowing the right additional providers into the  
> property.
>
Depending on what you mean by prevail. I have had my share of property  
owners win the battle and lose the war so to speak.

> The market always works these issues out themselves.
>
No it doesn't. Again, see the Sherman Act for generic anti-trust  
issues and the 1996 Telecom Act for specific competitive issues  
relating to our industry. In both cases, the government was forced to  
act because the market couldn't work it out for themselves.

> If you are truly offering a better product that is desirable then  
> all of
> this is a moot point.  The problem is today (due to our current  
> government
> nanny state) any Joe Shmo can call themselves a Telco Provider.  Savvy
> property owners should, can and will keep those out that they don't  
> see as a
> benefit.
>
If that was only the case. There may be plenty of shitty providers.  
There are also a bunch of shitty property owners.

-Matt 


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