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WASHINGTON, DC-In 1996, many thought the Telecommunications Act would spawn unprecedented competition and choice for telecommunications providers and services. Well, a great many little phone companies sprung up, called competitive local exchange carriers, or CLECs. States such as Virginia, where technology was booming at the time, was a great beneficiary. Now, as fortunes head south and these companies fail, state officials and real estate leaders are trying to figure out how to help tenants who might not be able to get a dial tone.

The Building Owners and Managers Association recently offered comments to the State Corporation Commission of Virginia about the issue of failing CLECs. SCC started its process in July with some proposed rules about how consumers should be informed if they are going to lose their service, and what measures should be put in place to provide services for those who lose them.

At first glance, the issue’s relevance to the real estate industry seems tenuous at best, but BOMA says not so.

In a statement, BOMA president Sherwood Johnston III said, “We filed in Virginia to outline the significant impact CLECs’ business failures are having on tenants and the private right-of-way in buildings where CLECs have located their infrastructure for services.” In essence, most CLECs are or were providing local phone services, but almost all CLECs were targeting the lucrative small-business sector. Even today, five years after the fact, most individual consumers are dealing with the Baby Bells, which aren’t such babies anymore after mergers changed their numbers from seven to four. Or individual consumers are dealing with the national long-distance services, such as AT&T and MCI Worldcom, which have gotten into the local phone business in certain major cities.

The CLECs, like many providers of high-speed data services now, went to owners of commercial properties and large property-management firms, struck deals to provide phone or data services in various buildings and had to wire those buildings to provide those services. In Virginia alone, the SCC said it authorized more than 200 competitive local telephone service providers to do business in Virginia since the deregulation bill of 1996.

SCC got involved in this issue after a situation last fall when a company filed for bankruptcy, leaving 6,000 customers to find another service provider. At this time, SCC is considering rules that prohibit CLECs from discontinuing service without 30 days prior notice to customers. CLECs would also have to provide an 800-phone number for customers to call with questions. The phone providers would also have to notify the SCC if it or its parent company is subject to bankruptcy filings.

The SCC is also considering whether the established providers, or default providers as they described them, in a given market would have to step in to provide services, which are critical to business customers.

BOMA said it likes these measures, but calls them only a first step. “In addition to establishing transition rules for failed CLECs,” BOMA recommended the agency, “also examine the threshold of qualifications it has required to receive a certificate.”

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