Posted on 17-3-2003

Telcos NoGoes

By HEATHER WRIGHT, Stuff, 17 March 2003

Businesses in some central city buildings are facing a future without the latest telecommunications services as greedy landlords demand payment from telcos to access buildings.

In one case a building owner told a telco which declines to be named, that it could only have access to the building if it was prepared to pay $5000 a year for each customer in the building. The telco says paying the $5000 would have seen it out of pocket for providing the service high-speed internet access and internet telephony, so it walked away, leaving tenants there without the new services. Another telco had heard about the demands and was steering clear of the building concerned.

A working party has been established by the Telecommunications Carriers Forum to look at developing a code of practice for building access. Telecommunications Carriers Forum independent chair Malcolm Alexander says the building access working party is expected to report back next month. TelstraClear, CityLink and Tuanz make up the working party, and Telecom may soon join, he says.

Ernie Newman, chief executive of the Telecommunications Users Association of New Zealand, says in the past, because there was only one telco providing services within a building, owners simply put aside a couple of square metres to become "the telecom room". "Now you've got a whole lot of issues arising from multiple carriers wanting to access that room and you've also got some greedy building owners with an eye on it as a source of revenue." Mr Newman says some telcos have been asked to pay rent to house equipment in a building. "There have even been suggestions that the rent should be a percentage of the telephone traffic, which is a bizarre concept and I'm not aware of anyone being silly enough to agree to those sorts of conditions."

All telcos contacted, including major players Telecom and TelstraClear, have encountered the demands and refuse to pay. Tangent commercial manager Gary Steele says his company walked away from some buildings because of owner demands. Tangent has a fibre network throughout the Auckland central business district stretching north to Albany and south to Manukau. "Our view is that there are rights under the Telecommunications Act that allow us to install our fibre optic network into buildings. We think it adds value to most buildings and the economy," Mr Steele says. But he says the wording of the act has created some opportunity for building owners to leverage it to their own benefit. He calls the demands a "significant" barrier to Tangent entering buildings. It reinforces Telecom's position, he says, because, in most cases, it has not paid to be there, "and once they're in under the Telecommunications Act it's a hard job to get them out".

However, Telecom too has encountered the issue. It says in a statement: "We have never made these payments. There is no need for Telecom to make them as we are providing service to the very same building owners and their tenants." Says Mr Newman: "At the end of the day where does it end? Are they going to charge the milkman a fee for walking up to the second storey and dropping a bottle of milk in? Are they going to put a turnstile on the door and charge $10 for every visitor that comes in? "If you rent a building then there is certainly an expectation that the availability of the necessary services is part of the deal."

CityLink was unavailable for comment.