Revocable Easement Agreement
As monopolistic providers, franchised cable operators had the market power to negotiate virtually unlimited access to MDU real estate. When the Federal Communications Commission (FCC) announced its rule banning exclusive MDU contracts for video services in late 2007, several video providers, including telephone companies, satellite TV distributors, and FTTH providers, had begun to compete vigorously for the right to serve MDU residents. The FCC announced its rule prohibiting the application of existing and future MDU exclusive access agreements for television services, primarily to unlock MDU markets for these new competitors. In most parts of the country today, thanks to technological innovations and regulatory changes, two or more broadband providers are ready to compete for access to attractive MDU properties. The courts will pay attention to the express intention of the parties to determine whether the authorized use is based on an easement or a licence. Thus, if a written agreement granted a “permit” for the construction of an aisle, but also determined that the benefits and burdens of the agreement went to the “heirs and assignees” of both parties, an easement was found, although no grant word was used. Unlike an easement, a license does not create an interest in the property. Rather, it is a personal contractual right to access and use the property for a limited period of time and purpose. As it is not a property right, a license does not require a transfer or written agreement; it can be terminated by the owner at any time, with several important exceptions: First, a permit that is “associated with an interest” – for example, a limited permit that allows the buyer of a car to enter the seller`s property to retrieve the car – is not cancellable at will. Second, a licence cannot be arbitrarily terminated if the licensee relies on it for significant on-site expenses. For example, if a cable company that relies on an owner`s access licence invests significant amounts of money in installing cabling infrastructure and other equipment on the property, the licence cannot be terminated by the owner at will.
Third, and most importantly, because a license is a contractually created right of access, the parties may agree in the agreement that the license is irrevocable or can only be terminated for cause – for example, the license to enter the property may terminate if the cable company violates the service agreement. Two final points: First, the FCC`s 2007 Ordinance on Exclusive Access Agreements to Video Services means that video providers (with the exception of direct-to-home satellite providers, which are excluded from the ban, at least for now) cannot enter into or enforce contractual provisions that designate a single provider as the sole provider of video services on an MDU property. The order does not mean that an MDU owner must allow a specific provider to access the property. A supplier must negotiate the terms of access with a building owner as before, and nothing in the FCC rule requires an owner to allow access to a provider. In other words, by banning exclusive access and service agreements, the FCC did not create a mandatory federal right of access. Until the late 1990s, there was little or no competition between multi-channel video service providers for residents of MDU properties. It was only when small satellite dishes became widely available that direct-to-home satellite providers were able to provide viable competition to franchised cable companies in MDU markets. Before that time, MDU owners were not very concerned about the type of building access they provided to cable TV providers. When the local franchised cable company was the only option available, many owners uncritically signed form documents granting cable companies long-term exclusive easements in and through MDU properties. This example, loosely based on a real-life case, shows the unintended consequences of signing an easement document that, in combination with the service contract, confers virtually unlimited access rights on the service provider. Together, the two documents prevent the owner from signing an exclusive marketing rights agreement with the cable or satellite company and allow ILEC to market and provide video services on a permanent basis, even after the end of the access and service contract.
An easement is generally defined as a dispossessed interest in a parcel of land that confers on the owner of the easement a limited use of the land that cannot be terminated at will by the settlor […].