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HOAs and High-Tech Wizardry Getting Wired

It wasn't so long ago that a web was something a spider made and a satellite was something that floated in the air and few of us understood.

Today, people are not only used to technology tools like Internet access and satellite television service, but there's a constant demand for the fastest service or the newest channel. We no longer have the patience for dial-up Internet service (that pinging noise we heard when we logged onto the Net via dial-up modem seems quaint today) and 30 channels, never mind half a dozen, won't quench our thirst for entertainment when hundreds are available.

Condominium and co-op boards have challenges to face that most single-family homeowners do not: What services will best serve our community? What discounts are available? Are exclusive contracts with cable or satellite television companies a good idea? And how do you balance the desire for technology of some residents with dish antennas or wires that other residents find unsightly?

Untangling the Web

Condo and co-op communities are an inviting market for Internet providers and other companies that provide technology through broadband.

"It's a really good market for us," says Mark Lyons, vice president of value added reseller sales for Vonage, a company that provides phone service through broadband. "Given the demographics, we target the apartment and condominium markets because they include lots of families, and because lots of those families might work out of their apartment."

Many of those families are first-time homeowners—they tend to be younger and more comfortable with technology, and always wanting more, which makes the market appealing. Developing a strategy for a development with hundreds of units is also a good way to attract a large number of customers at once.

Attractive as the condo and co-op markets are to these providers, associations often are able to find good service and pricing for their residents. Verizon actually has a subsidiary, Verizon Avenue that serves the multi-family marketplace almost exclusively.

"We [work] exclusively in the multi-family home industry - including some of the nation's largest real estate trusts, builders, developers, condominiums and co-ops," says Kevin Kirkland, the vice president of sales for Verizon Avenue.

Verizon Avenue works at arranging exclusive marketing agreements with associations. These agreements don't prevent residents from getting service from other providers—they essentially mean that Verizon is the preferred provider of the community and the one the association or board will promote.

"We work with the owners or management companies or homeowners associations to sign exclusive marketing rights which provide that Verizon is the telecommunications company that is marketed or endorsed by the administration or homeowners association," Kirkland says. "In return, we provide benefits to the homeowners association for allowing us those rights." Those benefits include discounts in pricing as well as easy access.

The Old and the New

Just about any multi-family building or development being constructed in this day and age is most likely being built with easy Internet access.

"My impression is that more than 90 percent of the property-managed buildings that are going up absolutely have the resources and also staff that are assigned to broadband and high-speed Internet services. It's an integral part of the wiring that goes in," says Lyons. That built-in capability makes it easier for residents to sign up for whatever broadband services they are interested in.

Older buildings may face some hurdles when it comes to retrofitting for high-speed telecommunications systems, but the bottom line is that Internet service companies want as many customers as possible, so it'sin their interest to find ways to accommodate all kinds of buildings.

"We do find in some cases properties may not be broadband-qualified by Verizon," says Kirkland. "It may be because of where it's located—they may not be able to get broadband services at a large percentage of the units. So we'll meet with the condominium board or the homeowners association and arrange to bring the central office to the property. In doing so, we provide the equipment and bring the services to the community and make the community broadband-available for every unit."

In return, Verizon asks for an exclusive-marketing agreement. The result is broadband access to every unit—all residents have to do is plug their computer into the wall. This also allows Verizon to offer a bulk discount; service that normally costs $35 to $40 a month can cost residents $20 to $25.

In a building that isn't wired for broadband, Kirkland says the existing wiring is tested to see if it can carry a DSL signal.

"If [the wiring] passes our test, we can install our broadband service for everyone. If it fails that test and we find the grade of wiring doesn't meet our standard requirements, then we wouldn't be able to install the equipment." The building's recourse then is a rewiring job, he says.

Kirkland adds that buildings that cannot carry the signal are becoming increasingly rare. Not only because new construction is wired as a matter of course, but because the newer technologies developed by carriers can work with older wires.

"Because of the technology, we're able to do more with even lower-grade wiring than we were able to do just five years ago," Kirkland says. That means if you're building wasn't capable of handling broadband a few years back, it may be able to do so now.

"For new buildings, it's a piece of cake," Lyons says. "Everyone is wiring to support broadband. For older buildings, retrofitting is a job. So with newer buildings, it's a much easier prospect. Wiring an older building is a major contracting job but it's worth the payoff because if you're not moving forward in that area of technology, you're going to be less attractive to buyers."

There can also be differences in wiring a high-rise building as opposed to a spread-out, multi-building community.

"If we find a garden-style community, we have to consider a different strategy, assuming the phone lines for all those units don?t come through a central demarcation point," Kirkland says. "There are garden-style communities where all the phone lines lead to the clubhouse or the leasing office and then it's pretty easy for us to service. We do have some cases where each building has its own demarcation point for telephone services and if that's the case we need to get creative in the way we provide broadband to those communities."

How to Serve a Dish

Satellite dishes are becoming more and more popular among homeowners because of the variety of channels they offer. Installing a dish is often as simple as going to Radio Shack, buying the receiver, and signing on the dotted line. The problem that associations face is that the dishes themselves can be unsightly.

"Co-op or condo associations believe one of their inherent functions is to make sure they protect their property values," says Daniel Murphy, an attorney with Greenbaum Rowe Smith & Davis in Woodbridge.

"In the case of the proliferation of satellite antenna dishes on balconies, many boards believe it adversely affects the aesthetic of the building or development. Therefore they want to see if they can prohibit these installations or at least place restrictions on installation so that the aesthetic look of the building isn't tarnished."

In 1996, the FCC adopted the Over-the-Air Reception Devices (OTARD) rule, which according to Murphy, "prohibits restrictions that unreasonably prevent, delay or increase the cost of antenna installation or otherwise interfere with the reception of television programming signals." Essentially, that means that buildings cannot prevent homeowners from receiving the channels they want at the best price, but they can require owners to keep satellite dishes hidden so long as it doesn't affect the signal.

Buildings or developments can opt to install one master antenna or dish on a building, avoiding a litter of dishes throughout the community. However this doesn't solve the problem completely. Every provider offers at least one channel another provider doesn't, and if a resident wants a channel that is available by some provider in the area, he or she has the right to sign up with carrier that offers it.

"The perfect situation would be for the developer, when the building or community is being built, to have one dish on each building," says property manager Susie Tannenbaum of Wentworth Group, who manages several developments in New Jersey, including Boulder Ridge in Randolph. "Unfortunately, not all the services provide all the channels, so if someone wants the Indian station or the Chinese station [and the primary carrier doesn't offer it] they have to put up [an individual] satellite dish anyway."

According to Tannenbaum, if a resident wants to put up their own dish, their board or managing agent will have the resident fill out an application form stating what is being installed, who is installing it, where it's being put in. Most associations attempt to keep wires in inconspicuous places, rather than having a bunch of wires running down the side of a building.

"It makes it very difficult," says Murphy. "So maybe the association has to put up two or three different [master] dishes on their roof, just to make sure you're getting the Indian channel from one provider and the Australian Rules Football channel from another."

An Exclusive Contract

Another issue in this area is exclusive contracts with cable companies. Some associations have contracts with a cable provider that makes that provider the only option in the development. Existing ones are grandfathered in, (OTARD was passed in 1996) and new associations can have these agreements on the basis that since the cable company is wiring the buildings, the company is entitled to an opportunity to recoup their investment. Murphy says the FCC is considering a law that would limit these contracts—including existing ones—to seven years.

"Once the association says they'd like to investigate having a satellite television company put in a central antenna, then they have to make sure they don't have an existing exclusive contract with a local franchise television cable service provider," says Murphy. "If they do, they're not permitted to bring in any other third party."

According to Murphy, it isn't uncommon for cable companies to take serious steps to protect their exclusivity.

"If an association brings in a satellite television company, and that company ends up trying to utilize the wiring that runs through the building, many times the local cable company will come in and cut the wiring that the satellite television company put in," he says. "The people who are hurt are the individual residents, because they're left without television services."

Murphy says that cable companies sometimes do this even if they don't have an exclusive contract. The building's recourse at that point is a lawsuit, which they usually deem to costly to take on.

"Many of these companies don't have the exclusive service agreements, but they still send their people out to cut wires that have been spliced into by the satellite provider and they will send a letter saying, 'You don't have a right to use our wiring,' says Murphy. "Well, the wiring doesn't belong to them; it belongs to the association. One of these days an association is going to challenge the right of one of these cable companies and the cable company is going to lose if they don't have the exclusive service agreement. But these associations don't have the money to fund a lawsuit like that."

For now, the main debates among HOA members, managers, and boards is what kind of access the association is willing to negotiate for its residents, the cost of that access, and how it will be provided without compromising the visual appeal (or contractual obligations) of the community.

Anthony Stoeckert is a freelance writer and a frequent contributor to The New Jersey Cooperator.

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Comments

  • i live in an up scale condo community in louisville ky. the board is adamant we cannot have antennas on our roofs. i am adamant that we must find a way to provide this service offered to residents. is it possible to have one large apparatus that would be located on the grounds that would provide all residents with dish??h