Do’s and Don’ts for Working with ISPs

CRE Market | on March 22, 2017

In commercial real estate, internet connectivity has long been thought of as a tenant issue. When tenants moved into a new office, ownership typically informed tenants about which Internet Service Providers (ISPs) were present in the building. It was the tenant’s responsibility to assess current options or engage with a preferred carrier to enter the building and deliver service. But when the time came to negotiate with a new ISP at the tenant’s request, building ownership could potentially reject the provider from entering the building due to disagreements over monthly access fees or because of infrastructure upgrades necessary for installation.

This dynamic is now changing, with IT due diligence becomes increasingly ingrained in the pre-leasing process and even the smallest tenants asking sophisticated questions about building technology and infrastructure before signing a lease. There are several fundamental Do’s and Don’ts that can be easily implemented by a landlord or developer to make it easier for tenants to get the connectivity they need:

Do - Plan for Internet Connectivity Before Construction Starts

If a building doesn’t have readily available conduits installed to the property line or a backbone cable pathway to tenant floors, it can cost hundreds of thousands of dollars to retrofit the building. Carriers will need to install new conduits through the foundation of the building to the manhole, and drill pathways from floor to floor. This can be easily prevented by hiring a telecom designer and constructing the building with ample conduit capacity during a development or redevelopment process. This will allow carriers to run cabling from the street all the way to tenant floors without needing to augment the infrastructure in the building.

Connectivity Guidelines for Developers, Engineers, and Architects - Learn More

Don't - Ask a Carrier for Rent

Many owners have a mindset that they should be making money from the carriers in their building. This pretense isn’t wrong, during the late 1990’s and early 2000’s, ISP’s were flush with cash and willing to jump through hoops to bring service into buildings. However, as margins have shrunk and the telecom industry has consolidated, it almost a financial impossibility for a provider to pay an owner rent. Every cost that an ISP incurs to bring service into a building is an added cost for tenants; carriers recoup the cost of their construction through the monthly contracts that tenants sign up for. The more expensive it is for construction, the more expensive it is for service. The same holds true for monthly access charges, every dollar passed from the internet provider to the owner is coming from the tenant’s pocket eventually.

Do - Create a Standard Boilerplate Access Agreement

What is a boilerplate?

A boilerplate agreement is the template document used to create access agreements with telecom carriers interested in providing service to the building. This boilerplate lays out the rules and regulations a building requires for providers in the building. Without a predetermined set of rules and regulations, the negotiation process can take upwards of 9 months as legal documents are redlined back and forth between the owner’s and the ISP’s legal teams.  

How do we create a boilerplate?

Creating a boilerplate agreement is typically a simple process with minimal costs. Building ownership’s legal department should draft the agreement for each building or portfolio using pre-existing carrier agreements that have been signed and approved. Once the agreement is drafted by the building’s lawyers and the boilerplate is complete, it is ready for use in any future negotiation with carriers bringing service in the building.

Want to learn more about future-proofing commercial office buildings? Check out Wired Certification Guidelines for Developments and Redevelopments.

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