Local Loop Install.

I’ve got an interesting question / situation…

I’ve got a local loop provider that we’re looking at using for some fiber connectivity. The long story is that there’s no real great place for them to place their gear in the entire building, sort of paying rent to the landlord, placing gear in our suite, or placing gear in an uncontrolled room , i.e. no cooling, no controlled access. This “local-loop” provider is asking to place this gear into our space… while this gear is to provide us with fiber connectivity back to a carrier hotel; they’re also looking to service other tenants in our building. It is unrealistic to ask this provider for some sort of a kickback, or monthly discount on service? They’re hitting us up for an install fee, maybe they could waive that? Anyone have some thoughts on this? Am I being unrealistic in thinking that, if they are going to profit by having gear in our space, we should expect to see a small return or favor? The only other option for them is to spend money and lease a small room, or modify an existing smaller room in the building to fit their needs.


I personally don't see how it would be unreasonable to ask for something if they want to use your space that you're paying for. Myself I would ask for the discount on service and also try to get the install waived or at least reduced.


Robert Sherrard wrote:

Also bear in mind that after your lease expires, they might could very well be SOL if the new tenant decides "I don't want telco monstronsity in the space I'm paying for", and they'd have every right to simply rip it out (and possibly keep it, depending on your area's local landlord/tenant laws, as it would be considered "abandoned by the former tenant" [you]).

I'm not sure if you want to remind them of that, but I think it'd be good form for full disclosure, since they might get dozens of customers dependent on that hardware and suddenly have nowhere to put it if you ever decide to leave.


Thanks to everyone for their comments and suggestions...

I was able to reach some mutually agreeable terms with the local loop provider... after pushing a little bit.


Derek J. Balling wrote:


  I ran into a situation like this a while back, and it got VERY
messy. (I was both the owner of the building and looking for a company
to provide connectivity). What if you get fed up with the provider and
don't want them to do your connectivity anymore, now you also have
to deal with the potential terms of the agreement no longer being
valid (If you put a statement in that they needed to provide service
at a discount, if you aren't buying from them anymore and there is no
provision for outright payment....You see where I'm going).

  I would stay away from anything other than them getting their
own space, own contract with the building, etc.


It is not unrealistic to charge them a free for your space. The landlord will
charge them for conduit access to and throughout the building, they are going
to use your power, your facilities, etc. Carriers don't put racks in collocation
for free. I'd have to know a lot more about your building, their needs, etc., but
you should take it from here. Most definitely you should be paid.


ILECs generally won't pay for space for the "mandatory" telecommunication
connections in a building or to a tenent. That's stuff like connecting
the base building POTS lines required for fire alarms, elevator phones,
etc. Even collocation providers end up giving the ILEC some "free"
plywood on the wall next to the MPOE and maybe a duplex electrical
outlet. A large skyscaper may have more base building POTS lines, and
the ILEC will require more space, but the amount of "free" space isn't
that much.

For anything above and beyond the mandatory base building POTS lines, its
up to negotiations between you, the landlord, and the CLECs or ILEC. If
the carrier is selling circuits to multiple tenents, not just you, you
may have a stronger negotiating position. The landlord has even a stronger
negotiating position. If you are a collocation operator with tenents
buying multiple OC192 circuits, the LEC may even pay you a commission for
the opportunity to sell to other tenents in the building.

Small CLECs are usually willing to negotiate more. Large IXCs and ILECs
are usually willing to negotiate less. A large collocation operator like
Equinix may be able to get concessions that someone with a 10 rack data
center can not get from the IXCs, CLECs or ILECs.

[ clip off topic this posting ]

Small CLECs are usually willing to negotiate more. Large IXCs and ILECs
are usually willing to negotiate less. A large collocation operator like
Equinix may be able to get concessions that someone with a 10 rack data
center can not get from the IXCs, CLECs or ILECs.

My experience is different, but my experience is large scale data and
network buildout so I understand. The poster sounds like they are talking
something a little smaller than I had in mind hence 'specifics', but
not knowing anything, I wouldn't ask for anything less than $700 to start.

I did notice he got something in a later post. Bravo. You should all try
the same whenever and provider tries to install a rack in your space. You
may be surprised.


So, back in 1999 I'm working for this small ISP that decides they want to become a colo player and open a datacenter in White Plains, NY. We spend large amount of time with commercial real-estate people to find a building with a: some space and b: fiber into the building.

Eventually real estate person calls about a a suitable building (lots of power, cooling and space -- and a large fiber mux in the basement) -- the previous tenant had just vacated the building...

We rush over and have a look... The building look great, nice location, generators and even has a large area with raised floor, but we cannot find where the fiber comes in, nor the demarc area...
We call up the telco (Nynex at the time) and ask where this magic fiber is... The guy on the phone mumbles something about some room in the basement. We go have a look and find nothing, so we call him back -- he get annoyed and says he was the installer and is sure it is down there -- we have yet another look and nothing, so we call him again... He starts sounding REALLY frustrated and says he will be right over to show us where it is... 10 minutes later he arrives and storms into the building, muttering under his breath about stupid customers being so blind that the cannot find 2 racks worth of equipment...

We follow him down into the basement and he strides across to one of the room and throws open the door, saying "Look, you see, its over here -- uh --- what?! Where did it go?!"
Against the back wall there 1/2 an inch of conduit sticking through the wall -- we shine a flashlight down it and around 2 feet into the conduit we can just see a bit of cable...

Turns out when the previous tenant left, they abandoned some metal desks and the like in the building -- the building owner called in a scrap metal company and paid them to "cart all of this junk away" -- it would appear that sometime a large fiber mux looks like junk....

The sad part of this story (from our point!) is that rerunning the fiber would have involved retrenching across the busiest street in the city and so wouldn't be able to happen for 10-12 months -- thus ended our colo plans...