The NAR has presented two versions of its virtual office Website policies to the Multiple Listing Issues and Policies Committee. On May 15 during the Midyear Legislative Meetings & Trade Expo in Washington, D.C., the committee recommended moving forward with version two which will be acted on by the Board of Directors at its meeting on May 17.

For purposes of this article, the difference between the two versions boils down to whether or not brokers may opt out of allowing their listings to be shown on competitors' virtual office Websites who have downloaded the MLS database for consumer consumption. Version one has no provision for a broker opt-out, while version two does.

The controversy began a few years ago when MLSs, through new Internet-based technologies, became able to aggregate their listings virtually and sell or give them to online advertising companies such as Realtor.com and MSN House and Home Channel. Brokers wondered why they couldn't have the listings, too, and use them to generate leads for themselves instead of third-party advertisers.

Many MLSs made the MLS database downloadable to brokers who could keep the data handy on devices such as parallel servers or even PDAs. Some of these brokers decided it would be a great idea to put the listings on their Web sites, and give consumers access through user agreements and passwords. It wasn't long before some of these brokers were using the MLS database as a playing card to enter into third-party advertising arrangements. Third-party advertisers then used the VOW broker as the gateway to the listings - in exchange for a hefty referral fee. While other brokers thought their listings were being advertised for free, the VOW brokers, in fact, used the listings to gain an exclusive market advantage.

When brokers began to catch on that they were giving away the MLS farm to newly minted brokers who hadn't done any plowing, the controversy broke loose. Unfortunately, all sides, now engaged in a war that should never have been allowed to happen, lost sight of the issue, and that is that the brokers should have never been allowed to advertise the MLS database through VOWs. Now that Pandora's Box is open, all that can happen now is regulation.

Here's the bald deal. The MLS is for the sharing of listing data and compensation between brokers. It isn't for consumers. It is a tool to serve consumers, but that doesn't mean it should in any way be used to give one broker a marketing or positioning advantage over another. It's the job of the MLS to make the listings available to brokers to show homes, but it is not the MLS's job to enable any broker to charge their fellow brokers referral fees from leads generated from the MLS database, or to use the database to exclude fellow brokers from certain advertising opportunities. That's pretty simple, isn't it?

Somehow, with the advent of technology, the industry has forgotten those basic tenets of cooperative sharing. The MLS is not about leveling the playing field, it is about giving the brokers a field to play in.

Brokers supply their inventory of listings to a cooperative called the MLS in order to get the listings sold by other brokers, not to get them advertised by other brokers. If the brokers want to advertise the listings through other brokers' Websites, there is already a policy in place for doing so - Internet data exchange.

There is no reason for VOWs to be handled the same as IDX Websites because VOWs should not and never should have been allowed to advertise the listings of other brokers in the first place.

If there is enough demand by brokers to be allowed to virtually publish the listings of other brokers in a VOW environment, then it is only reasonable that the process is regulated by the MLS. The MLS is entrusted by the brokers to make the technology possible to make the listings easier to sell, but those same technologies must also be policed, which gives the MLS new responsibilities to protect the cooperative data. If the MLS cannot control the brokers who use the data to follow the MLS and state rules about advertising other brokers' listings without permission, then it is only reasonable that brokers should have the ability to selectively opt-out.

Anti-trust issues should not be a consideration of the NAR board because the broker owns the data, a fact proven by the broker's submission of the data to the MLS. The brokers also control the MLS, either directly or indirectly. It is through the spirit of cooperation that s/he shares the data with other brokers through the MLS. Anti-trust issues only come into play if brokers conspire to hurt the business of a competitor. With a broker opt-out provision, no one is saying VOWs aren't allowed, but that it is the individual decision of the broker to participate. If a member wants to sue someone because s/he doesn't have access to advertising other brokers' listings, what court would seriously consider that as anti-trust when the listings are already being shared in an MLS cooperative and an IDX solution is available?

Neither should the consumer's wishes to have access to all the data be considered by the board. Of course, consumers want all the data, but wide release of MLS data has not proven to satisfy consumers. In fact, they want the data and lower commissions, too. The MLS isn't a consumer tool, it is for brokers to use to serve the consumer so that cooperation among brokers can be maintained. Making the MLS database accessible to any consumer undermines one of the major services and reasons for being of residential brokerage.

The very brokers who are demanding unregulated VOWs are the same ones whose business models depend the most on advertising other brokers' listings in order to get business. Judging from the sites with whom some of these brokers are engaging in advertising arrangements, they have already found that simply having the listings is not enough. In order to get consumers to try them over their better known and listings-richer competitors, they must also advertise some form of rebate or commission-cutting (disguised as referral fees). It's no wonder that many brokers consider giving these competitors listings which will then be used to abet the lowering of commissions across the entire industry as stupid at best and suicidal at worst. If a broker does not care to have his/her listings on a referral site, or a site that encourages commission-cutting, it should be the broker's choice. Why hand your competition your listings and allow them to beat up your bottom line with them? If brokers want to advertise low commissions, let them - but not in conjunction with the entire MLS database of listings.

Brokers should have a say in where they advertise their listings. A virtual office Website, like it or not, is a publication. It is no different from any other Web site. VOWs are advertising vehicles, proven by how they have been used by the brokers who publish them. Therefore all brokers should be able to choose to advertise or not advertise their listings on other brokers' VOWs.

That's why the board will vote for NAR's second proposal, which not only includes broker opt-out, but individual board governance.