Legislation that would require apartment owners to allow any and all telecommunications providers to have unrestricted access to their properties, commonly referred to as "forced access" legislation, would decrease, not increase, competition and create serious safety and fire code concerns, according to testimony given today by Jodi Case, Manager of Ancillary Services for AvalonBay Communities, Inc. (NYSE/PCX: "AVB").

Testifying before the House Commerce Committee's Telecommunications Subcommittee on behalf of the National Multi Housing Council (NMHC), American Seniors Housing Association (ASHA) and National Apartment Association (NAA), Ms. Case said that the service providers backing forced access legislation are simply trying to break into the fast-growing private marketplace for telecommunications services by changing the law rather than by competing for new business.

She explained that contrary to conventional wisdom, forced access legislation will actually stifle competition. While geographic monopolies do reduce competition, Ms. Case said that allowing apartment owners to grant exclusive contracts to a specific telecom provider on a given property actually stimulates competition and benefits apartment residents. Property-exclusive contracts enable start-up telecommunications firms to recoup the initial investment required to wire a property. This, in turn, facilitates the entry of new service providers into the marketplace who compete with the large, incumbent providers. Consumers further benefit from these contracts because they allow owners to negotiate the best possible price and level of service on behalf of their residents.

Ms. Case also noted that the constant wiring and rewiring of a property that occurs when apartment owners are forced to allow a multitude of telecom providers to service a property not only damages the property, it also compromises the ability of the property manager to adequately address building safety and fire hazards.

Published: May 19, 1999

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