Apartment Owners' Rights and Cable Television

By Hanback, Christopher B. | Journal of Property Management, May/June 1993 | Go to article overview

Apartment Owners' Rights and Cable Television


Hanback, Christopher B., Journal of Property Management


Cable television has become a standard part of the homes and daily lives of most Americans. Yet despite its prevalence, many apartment complexes across the country are not yet wired for cable. These potential markets have not gone unnoticed by both the local "franchise" cable companies and the so-called "satellite" cable companies.

Franchise cable companies are businesses which have been granted the right by governments (usually exclusive in a particular geographic area) to provide specified cable service to customers over cable lines laid underground or along utility poles. Satellite cable companies provide service from antenna dishes placed on the grounds of apartments and other properties to receive selected programming directly from space satellites.

Franchise cable operators assert that under state, local, and perhaps federal law, they have the right to force apartment owners and managers to permit the cable companies to wire their buildings to provide service to tenants.

Such cable companies attempt to require owners and managers to sign one-page agreements granting easements in perpetuity in order to obtain cable service. These easements generally would permit the cable operator to come on site, whenever it chooses, and install wiring and equipment at locations and in a manner determined by the cable operator and not the owner.

In New York City, certain creative satellite cable companies are threatening owners and asserting a legal right to wire apartment buildings, even though such companies have not been granted a franchise by the city government.

OWNERS' OPTIONS

Owners and managers of apartments have rights, too. In the competitive apartment market, the ability to provide tenants with reliable cable service, including the locally desirable sports and other premium channels, is a significant marketing tool.

In addition, building aesthetics are an important aspect of attracting and retaining tenants. The owner must be able to control the location and appearance of cable equipment and wiring in hallways, in apartment units, on the exterior and roofs of buildings and on the grounds of the property.

Certain apartment owners in Virginia and the Midwest have reportedly decided to ignore the cable operators altogether and to provide cable service directly to tenants. In such cases the owners are able to collect the cable television revenues themselves.

CONTRACT NEGOTIATIONS

Anyone who has negotiated contracts for owners and managers with cable companies around the country knows that many satellite companies, and more rarely a franchise company, are willing to share cable revenues with an owner, in return for permitting the cable company's entry into a complex.

Attempting to obtain a share of the potential revenues from cable' television service to tenants is not, however, necessarily the goal of owners in selecting and negotiating contracts with cable television companies for an apartment property. Owners may be more concerned with obtaining assurances of proper installation and maintenance of cable television service. Indeed, it is likely that the owner or property manager is going to be the only party in a position to look out for the interests of tenants in receiving good service.

Many cable television companies, both local operations and subsidiaries of the large national companies, are willing to negotiate the terms of contracts. There is always the initial period of saber rattling and delay during which the owner is advised that he or she must sign the "standard contract" In the case of negotiations with franchise companies, this may be followed by the mandatory threat to sue the owner under the local cable franchise statute to force entry.

It is obviously much more cost effective for the cable operator to enter into a balanced and fair agreement with the owner than to commence legal proceedings to force entry. Such actions may take months or years to conclude and, even if successful, leave an angry and uncooperative owner rather than one interested in providing first-quality cable service for residents.

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