United States: Federal Communications Commission Strikes Down Lease Restrictions On Wi-Fi Antennas

Last Updated: January 31 2007
Article by Russell H. Fox and Jeffrey A. Moerdler

The Federal Communications Commission ("FCC") recently issued a Memorandum Opinion and Order ("Order") that strikes down an attempt by the Massachusetts Port Authority ("Massport"), which operates Logan Airport in Boston, to limit a tenantís ability to operate a Wi-Fi antenna to provide free wireless Internet access service to the tenantís customers and employees. The case has important implications for landlord-tenant relations with regard to Wi-Fi and other small antennas referred to as over-the-air reception devices ("OTARDs"), which are regulated by the FCC.

Background

In July, 2004, Continental Airlines ("Continental") installed a wireless Wi-Fi system antenna in its Presidentís Club in Logan Airport. The Wi-Fi system is similar to those used by consumers to create wireless networks in their homes. Continentalís system was designed to provide free wireless Internet access to passengers and Continental employees inside its Presidentís Club. In June, 2005, Massport demanded that Continental remove the Wi-Fi system from the Presidentís Club.

Massport argued that the Wi-Fi system violated Continentalís lease. It also pointed out that if airline passengers and Continental employees wanted Internet access, they could access the system provided by Advanced Wireless Group, the exclusive airport Wi-Fi provider engaged by Massport, which was available for $7.95 per day (or by other commercial arrangementsóthrough Continental or directly with Advanced Wireless Group). Massport also argued that the Wi-Fi system was a potential source of interference to public safety operations on airport grounds.

It is possible that Massport also shared in the revenue generated from usage of the Wi-Fi service provided by Advanced Wireless Group and, therefore, Continentalís system would have reduced the revenue not only to Advanced Wireless directly but also to Massport indirectly.

Continental countered by filing a petition under the FCCís OTARD rules, arguing that, under those rules, the Massport lease restrictions on Continentalís Wi-Fi system were invalid. Generally, the OTARD rules prohibit restrictions that impair the use of certain antennas, including antennas one meter or less in diagonal measurement that are used to receive and transmit wireless signals, such as the Wi-Fi antennas used by both Advanced Wireless Group and Continental at Logan Airport.

For the OTARD rules to apply, the antenna must be installed "on property within the exclusive use or control of an antenna user where the user has a direct or indirect ownership or leasehold interest in the property" on which the antenna is located. Restrictions prohibited by the OTARD rules include lease provisions, state or local laws or regulations, private covenants, contract provisions, or homeownerís association rules. The OTARD rules prohibit rules that:

  • unreasonably delay or prevent the installation, maintenance or use of the antenna;
  • unreasonably increase the cost of installation, maintenance or use of the antenna; or
  • preclude the reception of an acceptable quality signal via the antenna.

The OTARD rules make no distinction between commercial or residential settings.

The FCCís Decision

Massport conceded that the Wi-Fi antenna installed in the Continental Presidentís Club met the criteria established in the OTARD rules. In addressing Massportís other arguments, the FCC found that:

  • the antenna was located on property where the user had a direct or indirect ownership or leasehold interest;
  • the antenna was used to receive or transmit fixed wireless signals;
  • the restrictions in the Massport lease unreasonably impaired the use of Continentalís antenna; and
  • Massport did not demonstrate that any exemption from the OTARD rules applied.

The FCC also rejected the various other legal issues that Massport raised.

Exclusive Use and Control

The OTARD rules apply to antennas installed in an area within "the exclusive use and control" of the party installing the antenna. This includes the premises exclusively demised to a tenant under a lease or owned by a condominium unit owner, but not the common areas outside the leased or owned premises such as the exterior of a building, a public hallway or a roof. However, if a tenant or condominium owner has exclusive use of a balcony, terrace, garden or roof area then such area would also be subject to the OTARD rules.

There was no dispute that Continentalís lease gave it the requisite leasehold interest under the OTARD rules. However, Massport noted that the terms of the lease allowed it access to Continentalís leased premises for maintenance, security, construction work, or to place utilities in, over or through the premises. The FCC found that such access did not defeat the leasehold interests under OTARD. Massport also argued that Continental was not the "user" as contemplated by the OTARD rules but that the Presidentís Club members were the users of the antenna and that they did not have a leasehold interest at Logan Airport. The FCC disagreed, deciding that the party that installs and operates the antennaóin this case Continentalómust have the leasehold interest for OTARD to apply and that Continental was the user of the antenna that it installed and operated by sending and receiving signals to its customers and employees.

Reception and Transmission of Fixed Wireless Signals

To be covered by the OTARD rules, communications signals sent over an antenna must be:

  • commercial;
  • nonbroadcast; and
  • transmitted via wireless technology to and/or from a fixed customer location.

Massport did not argue that the signals sent over Continentalís Wi-Fi system are nonbroadcast. However, it asserted that because Continental passengers enjoyed free Wi-Fi service, no commercial service was involved. The FCC disagreed, finding that the "signal" was commercial because it carried commercial Internet services, regardless of whether the "service" was free.

Massport also argued that the Continental antenna was not covered because it did not receive signals from outside the leased premises; the Continental device, like a consumer wireless router, received a signal from a broadband connection within the Continental premises. The FCC found that the OTARD rules do not require that antennas transmit or receive signals from outside the userís premises. The FCC said that Continentalís "internal" antenna was precisely the type OTARD is designed to cover because it provides a wireless alternative to Massportís network, it enhances the quality of the Internet services received by Continental, and it promotes the availability of enhanced telecommunication services.

The FCC also rejected Massportís argument that the Continental antenna acts as a "hub"ówhich is not protected by the OTARD rulesóbecause the antenna distributes services to other receiving antennas housed within, for example, laptop computers. The FCC said that when a leaseholder or property owner uses an antenna to send and receive signals strictly within its premises and not to multiple customer locations, the antenna user is using the antenna for its own purposes, even if invitees such as houseguests or business customers receive the signals.

The Restrictions Unreasonably Impaired Installation, Maintenance or Use

The FCC noted that not all restrictions on OTARD antennas are impermissibleóonly those that unreasonably delay, prevent or increase the cost of the installation, maintenance or use of an antenna, or preclude reception or transmission of an acceptable quality signal. The FCC found that Massport restrictions were prohibited under this test for several reasons. The Massport lease includes provisions:

  • limiting the use of the facilities to those specified; and
  • prohibiting interference with the effectiveness of any communications system.

The FCC found that these lease provisions:

  • could require Continental to discontinue use of or remove its Wi-Fi antenna;
  • would prevent the installation and use of an OTARD covered antenna; and
  • should be preempted by the OTARD rules absent some exception.

Continentalís lease also prohibited making alterations to the leased premises without submitting an application to, and receiving the permission of, Massport as landlord. Massport argued that Continental did not submit the required request for permission to make an alteration in connection with installation of the Wi-Fi antenna. The FCC found that such prior approval provisions with respect to OTARD antennasówhich unreasonably delay antenna installation and discourage people from attempting to use such antennas due to the added inconvenience and uncertainty they createóare prohibited.

The FCC did not address whether the scope of work required to install Continentalís Wi-Fi system was an invasive or structural alteration to the premises, which under the lease required Massportís approval, although it seems unlikely that such an alteration was involved. More likely, the lease alteration provisions did not even apply to the installation of Continentalís Wi-Fi antenna system which was likely not invasive and merely involved connecting wires to a preexisting communications line (fiber optic, telephone or cable) and plugging the antenna into an electrical outlet.

Exceptions

Massport argued that one of several exceptions to the OTARD rules allow enforcement of the Continental lease. First, it argued that a "central antenna" exception (in which a landlord makes available a master antenna to all tenants) should apply. However, the FCC found that if Continental were required to use Massportís "central antenna" facilities, it would be denied the opportunity to use its own service provider and would be limited to whatever type of services, level of network security, quality of service, and signal strength Massportís contractor provided and to the cost and timeframe at which the contractor was able to offer the service. Therefore, the FCC found that Continental would be impermissibly impaired in its attempts to secure the terms and quality of service it desired.

Massport also argued that the restrictions in its lease qualify under the safety exception to the OTARD rules because:

  • the Massachusetts State Police plan on using the Wi-Fi system, and the Transportation Safety Administration ("TSA") conducted a trial using the Wi-Fi system; and
  • the Continental system could cause interference to those public safety users of the Massport Wi-Fi system or users of other public safety systems.

The FCC rejected this argument. It said that the spectrum that the Wi-Fi system would use is unlicensed and not subject to protection from harmful interference. It also found that the safety exception relates to the physical antenna installation and not to the nature of the communications being received or transmitted over frequency bands used by the antenna.

Finally, Massport argued that the FCC has never enforced the OTARD rules in a government building and questioned the applicability of competitive telecommunications access requirements, such as the OTARD rules, to airports. In response, the FCC said that the OTARD rules have no express exemption for government entities and that there is no reason to withhold application of the OTARD rules, as a general matter, to state and local governments that act as landlords. The FCC distinguished college dormitories (to which the OTARD rules do not apply) because a college dormitory is a not a leasehold interest and the relationship between a college and a student is not the same as between a landlord and a tenant.

Conclusion

The Massport decision is likely to have a major impact on the real estate industry and on the nascent industry of for-profit providers of Wi-Fi services. Property owners will have little control, if any, over Wi-Fi use by tenants within their properties and may be caught in the middle as issues of interference or ability to access services arise. At the same time, Wi-Fi providers will no longer be assured of a captive audience when they enter into agreements with property owners allowing them to install service at a property.

Landlords and tenants need to be aware of the FCCís OTARD rules and the Massport case. Any restrictions on the installation or use of Wi-Fi or other small antennas within a tenantís leased premises may be unenforceable unless they comply with the OTARD rules and the Massport decision. For example, reasonable safety rules regarding the manner of installation of an antenna affixed to a terrace or building setback, or a requirement to paint an exterior antenna the color of the building, may be enforceable, but a requirement to obtain a landlordís prior approval or to pay a fee to the Landlord are likely not enforceable.

Some of the questions that may arise are:

  • Can property owners restrict tenants from installing multiple satellite dish or other small antennas on terraces, balconies and other external building areas under the control of the tenant, or will tenants have the unfettered ability to install antennas?
  • May property owners require proof of insurance from tenants or their contractors before antennas are installed?
  • Can property owners impose what otherwise would be customary alteration approval and construction-method restrictions on antenna installations?
  • Will property owners be liable if antennas are improperly installed and fall causing injury to persons or property?

These questions, and others raised by the intersection of communications regulation and real estate, will be answered over time as technology and law evolves. At least for now, technology users have the upper hand and real estate interests must be aware of the boundaries of their rights.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaqís use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributorís own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaqís Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaqís Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaqís right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions