We represent companies with respect to the drafting, reviewing and negotiating of in-building wireless agreements. In-building wireless agreements include contracts for the provision of wireless services in public buildings or venues, such as airports, subway systems and train stations, as well as agreements for the provision of wireless services at privately-owned commercial properties, such as commercial office buildings and shopping malls. The wireless services may include, for example, cellular, PCS, SMR or unlicensed services such as wireless LAN (i.e. WLAN or IEEE 802.11).

In some cases, the terms and conditions for an in-building wireless transaction will be set forth in a single agreement between a wireless service provider and the owner of the property. In other instances, a neutral host builds and maintains the wireless network and enters into separate agreements with the owner of the property on the one hand and the wireless providers on the other hand. Regardless of whether the transaction is a two-party transaction or whether a neutral host is also involved, there are numerous legal and other issues to consider when drafting and negotiating an in-building wireless agreement.

For example, it is important to make clear the extent of the services that a wireless provider may offer at the property. Surprisingly, some agreements are not clear on this point, and that type of ambiguity does not benefit anyone. It leaves the wireless provider unsure as to whether it can offer new applications for the same licensed services, offer services for which it receives a license to provide after the agreement is executed, or offer unlicensed services that it subsequently wishes to provide. As for the property owner and the neutral host, they need to have a full understanding of the range of services that the wireless provider has the right to provide to ensure that they do not give inconsistent rights to different providers or unknowingly permit interference that they have agreed to use commercially reasonable efforts to prevent. Not surprisingly, interference issues are also extremely important in in-building wireless agreements and must be addressed carefully regardless of whether it is a WLAN agreement or an agreement relating to the provision of licensed services.

Access provisions are also important in in-building wireless agreements, regardless of whether the agreements relate to wireless services at airports, subways, train stations, commercial office buildings, shopping malls or other venues. Wireless providers and neutral hosts must ensure that the agreement gives them sufficient access both in terms of scope and timing. The agreement also needs to clearly spell out who will be provided access so that there are no unwanted surprises. For example, will there be an access list? Will photo IDs suffice? The parties must make sure that these and many other access issues are addressed in in-building wireless agreements.

Some of the access terms are often included in a broader set of terms and conditions commonly referred to either as the owner’s policies or the owner’s rules and regulations. Whatever they are called, these policies of the owner are not part of the base of the agreement, and are sometimes, but not always, attached as an exhibit to the agreement. Nevertheless, wireless providers and neutral hosts, like telecommunications providers in other contexts, generally agree in their contracts to comply with an owner’s polices, even though on many occasions they do not even see, let alone carefully review, the policies first. Agreeing to documents that one does not review is never a good idea. It is particularly risky here given that many owners have policies that are extremely one-sided and can add significant costs and risks to the providers or the neutral hosts. Providers and neutral hosts can often get some of these policies clarified or deleted as to them, particularly where they have some leverage in the negotiations. On several occasions, our comments with regard to owners’ policies have resulted in the owners changing their policies not only as to our client, but as to all licensees.

Wireless providers and neutral hosts should be concerned not only with the owner’s policies as they exist on the date the agreement between the parties is executed, but also with any subsequent changes to the policies. This is because the agreements often state that the wireless providers and the neutral host will agree to comply with all changes in the policies made by the owner subsequent to the execution of the agreement. This provision, if agreed to with no limitations, may turn a good deal into a potentially bad deal for the providers or the neutral host. If at all possible, appropriate limitations must be imposed on any such changes to the policies, which limitations will vary depending upon the circumstances involved.

Payment provisions are, of course, always critical to each side. There are numerous issues with regard to payments, including, for example, whether payments for access will be calculated on a flat rate or based on provider revenues; whether flat rate payments will be based on the amount of space used, the number of licenses the provider is operating under, the amount of spectrum being used, or certain other factors; who will pay for the initial build-out; and how will maintenance and operation charges be determined. Providers and neutral hosts need to be very careful that they fully understand the nature of all the charges to ensure that there are no hidden fees, and that there is a reasonable cap on any increases in fees. States and municipalities need to ensure that their fees and payment structure do not violate 47 U.S.C. §253, if applicable, which provides, in part, that no state or local law or legal requirement may prohibit, or have the effect of prohibiting, the ability of any entity to provide telecommunications service, except that a state or local government may manage the public rights-of way and require fair and reasonable compensation from telecommunications providers, on a competitively neutral and non-discriminatory basis, for use of the public rights-of way.

A set of provisions that are often heavily negotiated involve performance standards and the provider’s remedies if such standards are not met (these standards are commonly referred to as service level agreements or SLAs). Providers must ensure, among other things, that the performance standards have significant “teeth” and that in addition to the provider’s right to receive substantial credits where the performance standards provided by the neutral host or owner are not met, the provider should have clearly defined termination rights where the problems are significant and continue to recur. Owners and neutral hosts, on the other hand, must be particularly careful to appropriately limit when the performance standards are applicable and should also ensure that a provider cannot terminate the agreement unless the standards are repeatedly violated for significant specified periods of time.

Termination provisions in in-building wireless agreements are also very important for several reasons, including the cross-default issue. That is, if one party breaches, will the other party have the right to terminate other in-building agreements the parties may have with each other, or will the other party have the right to terminate the entire in-building agreement where it covers multiple properties even though the breach occurred with respect to only one property?

The parties must not only be concerned with termination rights but also with liability issues. There are numerous ways in which to limit the liability of the parties and we often use a combination of provisions to best protect our clients from significant liability. In addition, relocation and removal provisions are also extremely important, often involve significant negotiations, and if drafted incorrectly, can eliminate all of the profit of providers or neutral hosts.

Assignment provisions and similar concepts are also often heavily negotiated in in-building wireless agreements. A provider must make sure that if it plans to sublicense some of its space, assign or transfer its FCC licenses, partition its authorized service area or disaggregate its spectrum, the agreement has the proper flexibility to suit the provider’s needs. Conversely, if the owner or neutral host agrees to allow any of the foregoing it must include language that protects it from several unwanted results that may otherwise arise.

All parties also need to be cognizant of the impact that other agreements may have on their individual in-building wireless agreements. For example, in agreements with owners, neutral hosts will want to ensure that they have the power to give the providers all the rights they are offering them under the provider agreement. Neutral hosts can easily make mistakes in this area. Providers, on the other hand, need to make sure that no other agreements, easements, etc. undermine the rights they have received in their agreement with the neutral host or the owner. Each of the parties also needs to take all appropriate cautions to protect itself in the event of a bankruptcy by another party. For example, providers need to ensure that if the neutral host files for bankruptcy, they can continue providing service on the property and that a replacement host can be found.