Telus Corp. is spending billions to upgrade its fibre network throughout the province, but it’s hoping condo owners will want the high-speed service badly enough to give Telus exclusive access to their buildings for free.
“Is it the most egregiously one-sided contract I have ever seen in my legal career? Probably,” said Dave Liden, associate counsel with Remedios & Co. in Vancouver, who has studied the issue for the Condominium Home Owners’ Association of B.C. (CHOA-BC). “Is it a harmful contract to the consumer? Do birds fly? Do fish swim?”
Part of Telus’ plan to invest $11.5 billion in B.C. by 2018, development of a fibre optic network has gained pace since 2013. Communities in the southern Interior were connected in 2014 and northern Vancouver Island in 2015; last fall, Premier Christy Clark and Mayor Gregor Robertson attended the announcement of Telus’ billion-dollar plans for the Vancouver portion.
Telus, which didn’t respond to an interview request for this story, has delegated the job of seeking building access to its contractor for the project, Ledcor.
The licence agreement, several versions of which exist, typically asks building councils and the owners they represent to grant Telus and its agents access to their premises for the purpose of installing its new fibre network.
While the agreements expressly state that nothing in the licence “will be construed as granting TELUS any exclusive right, licence or privilege … to the exclusion of any third parties,” they also stipulate that owners do nothing that interferes with or affects access to or the use of Telus’ equipment.
Should buildings receive an offer to host a third party’s wireless antenna, the agreements give Telus first dibs on the location.
Condo advocates say these terms unfairly restrict what owners can do, contravening Canadian Radio-television and Telecommunications Commission (CRTC) regulations.
“The types of right-of-ways or access that’s being provided may not, in most cases, be within the scope of the authority of the strata council to agree,” explained Tony Gioventu, executive director of the CHOA-BC. “The essence of exclusivity that’s implied in the contract doesn’t comply with CRTC regulations anyhow. Communications providers are not permitted to bind their clients into exclusivity.”
The problem isn’t one facing single-owner buildings, such as multi-family rental properties, however.
Because there’s just one owner, the interests of other owners within the property aren’t affected. Dave Hutniak, CEO of the rental owners’ association Landlord BC, said most owners see Telus’ service as adding value for tenants.
Telus claims that having the network can boost rental revenue by 8% and property values by 3%.
“Quite a number of our members have taken advantage of it,” Hutniak said. “They view it as a value-add to their building and their operations.”
Given installation costs that can run between $1,200 and $1,400 a door, Hutniak said he’s not surprised that Telus wants exclusive rights to a building as a matter of safeguarding its investment.
“It only makes sense,” he said. “It would be pretty dumb on Telus’s part not to require that – they’re incurring a significant cost.”
The new agreements are the latest front in a long-running battle among telecommunications companies for access to condos. Telus, Shaw Communications Inc. and Novus Entertainment Inc. have regularly made bids for condo owners’ business.
Adam Lord, vice-president of operations with strata manager Associa BC Inc., said companies typically offer owners a discount of about 15% off current rates. If a strata grants access to owners, it often gets free service to the common areas for a year.
“They’re really trying to push to get their foot in the door,” he said.
Associa recently met with Telus regarding the possibility of the telecom marketing its services to the buildings Associa manages, but Lord said the access agreement Telus is asking buildings councils to consider – usually directly, with no notice to strata managers – is quite another matter.
“To basically allow one company to monopolize the building – it would be up to the owners,” he said.
But with strata properties, a building council can’t make decisions that infringe on the rights of individual owners, and current owners can’t grant access to strata lots that overrides the rights of future owners.
This means the long-term access Telus seeks as part of its fibre optic agreements may be unenforceable.
Gioventu said it’s impossible to know how many building councils have signed the agreements, but he knows many have refused.
“You’re either going to have a shrewd group of people on the strata council and a property manager who say, ‘We need to have some review on this before we sign it,’ or a bunch of them are going to have signed it and not think about what the implications are going to be,” he said. “[But] a contract that doesn’t meet the requirements of the legislation [is] pretty much … null and void.”