I hate to call out companies like this, but I feel the need to let everyone know about a change Verizon is instituting in their Premises Access License (aka “PALS”).
Since the PALS are a (i) separate agreement (ii) they auto-renew so they have no expiration date and (iii) are not tied to (if applicable) any Verizon marketing agreement… the PAL lives on even after any marketing agreement has expired. So this “modification” they are implementing can have a huge impact on a community’s telecom future. Here’s the issue:
Verizon is adding Anti-Bulk language to all new PAL documents (Renewal, Greenfield, or Brownfield)! This means, if you execute their standard PAL, the property will never be able to sign a Bulk telecom services agreement with another provider as long as the PAL is active. New Update to original post – see below!
If you sign a Non-Exclusive Marketing Agreement (“NEMA”) with Verizon… once the marketing agreement expires, the PAL is still in place…so the property is not allowed to sign a Bulk agreement with another provider (you can sign one with Verizon, but that is all).
Now, If you have an Exclusive Marketing Agreement (“EMA”) in place with another provider and are just allowing Verizon to service your community with FiOS so your residents have a choice OR you are getting notices (like some of my clients are) related to upgrading the copper facilities to fiber-based facilities (or they will disconnect you and your residents Verizon services)…signing a Verizon PAL will prevent the property from considering a Bulk TV and/or internet program with anyone but Verizon for as long as the PAL remains in place.
I predict that other providers will begin instituting something similar on any new development deals…and once this happens, owners will be forced to choose a Bulk or non-Bulk from the outset (and will never be able to pivot to the other option in the future).
Anti- Bulk language has always been a part of an EMA or NEMA, but now requiring it to just service a property is next level. I sort of understand why they are doing this (they want to protect their investment…as it can cost upward of $1,000 or more per unit to install and deliver FiOS to a community), but to me, this is like telling a single family neighborhood or an office building that they will only install FiOS if they can guarantee enough subscribers so that Verizon does not lose money on the install.
Suggestions/Recommendations:
1) If you are a long-term holder of a community and can’t ever see moving to Bulk telecom services, then this change is not an issue and you can ignore this whole post.
2) Begin to keep track of when you can terminate a PAL so you can take the necessary steps to do so, thus enabling you to look at Bulk with another provider (however, terminating a PAL normally terminates Verizon’s rights to service the community/residents – so this can become a tricky/sticky mess).
3) Don’t sign any new PALS with Verizon until they remove the language… In the cases where Verizon is shutting off service, it may be better to switch the property phone, elevator, fire alarm, etc. lines to a competitor…and if you still have residents using Verizon phone and DSL service, you may want to help them move into the current century.
4) Work with your local Verizon account representative to see if you can put a limit on the length of time the Anti-Bulk language will remain in effect.
5) Reach out to an owner-focused Telecom lawyer or a company like ASM (yes – shameless plug) to assist you in navigating thru this issue.
In the immortal words of Kuiil the Ugnaught…”I have spoken”.
UPDATE!
I’ve received numerous calls and emails in response to the previous blog/post on this topic. Upon reflection, I realize that my tone may have been more assertive than originally intended. It’s important to clarify that Verizon has not engaged in any questionable or unethical practices when introducing anti-bulk language into their PALs. My primary goal was to ensure that property owners are well-informed about this change and its potential impact on their communities when accepted “as is.” Additionally, I aimed to provide owners with various options for addressing the inclusion of anti-bulk language in their PALs, based on their telecom strategy.
Just like any provider investing in infrastructure at their own expense, Verizon rightfully expects a reasonable return on their investment within a certain timeframe. Therefore, it’s entirely reasonable for Verizon (or any provider) to request that owners refrain from entering into bulk agreements with other providers for a specified period. Typically, this is achieved through language in a marketing agreement. In the case of Verizon, they are even willing, under certain conditions, to install Fios facilities and service communities without requiring owners to actively market their services. This is why they insist on including anti-bulk language in the PAL. If an owner cannot commit to this for a defined period, it is well within a provider’s rights to refrain from investing in infrastructure and delivering services to that community.
Before considering proposals from providers, owners should have already developed a comprehensive telecom strategy for each community or their portfolio as a whole. This strategy should serve as the foundation for any RFP. I strongly recommend that owners engage in candid discussions with potential providers when considering them for their property, sharing their telecom strategy openly. This will allow both parties to determine the necessary steps, if any, that need to be taken. Furthermore, before signing any agreements, it’s essential for someone knowledgeable in telecom agreements to review the documents to ensure they align with the strategy. In the case of the previous blog/post, modifications to the PAL may be necessary to safeguard the telecom strategy.
If you find yourself unsure about where to begin or how to develop and implement a telecom strategy, don’t hesitate to seek assistance. There are numerous companies, including ASM (a shameless plug, but they’re experts in the field), that can help you craft a strategy. Additionally, there are many proficient lawyers who can assist you in drafting appropriate language for your agreements. Don’t be afraid to ask for help when needed; it’s a prudent move to ensure you make informed decisions.