lightRadio and the “End of Cell Towers”
February 23rd, 2011 by sita Posted in Uncategorized | No Comments »
Alcatel's proposed lightRadio Cube
Recently, Alcatel sent out a press release for their lightRadio cube that stated that ”New Wireless Advances could mean the End of Cell Towers”. This sensationalist and ill conceived (IMHO) press release was widely picked up by newspapers, magazines, and blogs whose authors in 95% of the cases failed to do any substantive research into the how, where, and why portions of the story. They simply regurgitated the press release headline that cell towers will be a thing of the past now that lightRadio is here. As a result, many of our clients reached out to us asking whether they needed to do anything because to prevent the now pending end of their cell tower or cell site lease. Alcatel provided little substance with their press release merely showing pictures of the lightRadio cube which measures 3 inches by 3 inches and leaving uninformed readers to assume the worst. That towers can now be removed from around the country because of this wonderous 3″ cube. That the blight on our visual landscape will now be a thing of the past. That new towers are no longer necessary.
The reality is that this technology is unproven as of yet. It is not in use and has not been adapted by any wireless carrier in the United States. One of the major wireless carriers is contemplating doing trials on the lightRadio system which means to us that actual deployment is still 5 years away. While it may be unproven, the reality is that whether it is lightRadio or another technology platform, the miniaturization of cellular antennas and transmission equipment is already occurring. The carriers already deploy femtocells (mini-towers as the press refers to them) that you can use in your home. They already use picocells- miniature antennas that can be attached to the sides of buildings and on small poles that operate to augment coverage and capacity in small areas. They have Distributed Antenna Systems where small nodes include both the transmission equipment and the antennas in small packages that are mounted on utility poles or in stadiums or buildings.
The carriers have and are working with equipment manufacturers to develop better, smaller, and cheaper technology to be used to increase coverage and capacity in their network. But there are fundamental and scientific facts about the propagation of wireless frequency and the efficiencies to the network of using macrocells (what people traditionally think of as a cell site). The taller the antenna, the wider area of coverage. The bigger the antenna and the greater amount of power going through it, the stronger the signal. To reach those areas where the carriers need coverage like inside buildings, power is needed. A 3 inch cube will not provide wide area coverage as it simply can’t handle the amount of power necessary to provide that coverage. Alcatel’s plans are that these cubes can be used in sets of 10 or 30 within a traditional antenna panel. Alcatel is promising a 50% reduction in the power used by cubes as compared to traditional cell site base stations. That may be. However, until they design these cubes to float in the air without assistance, there will still need to be a structure supporting the cubes.
Whether they are mounted on rooftops, towers, or water towers, cell antenna will still need to be mounted higher and above the existing foliage and buildings. The exception to this is in those areas where building or other structure density allows for deployment of smaller more frequent cell sites. Even then, the underlying population density and cell usage must support the cost of deploying the sites. Power and fiber optic cable will need to be run to each node. A lease will have to be entered with the landowner or building owner or a right of way access agreement with the local utility or municipality. All of this suggests to us that cell towers in general aren’t going away. However, some specific cell towers and rooftop sites may no longer be needed whether it is due to technology changes like lightRadio or mergers and consolidation.
lightRadio cubes won’t replace towers in rural areas or in most suburban areas. They may give the carriers additional options for deploying their network in the future and may help reduce the cost of individual cell sites in the future. We strongly suspect that some landowners and rooftop owners who have been too aggressive in pricing in the past will find their lease(s) terminated over time as the carriers now have additional tools that they can use to work around obstinate landowners or rooftop owners. These cubes and other miniaturized technologies will reduce some (but not all) of the future need for new cell towers in urban areas and some high end residential areas.
So before you go selling your tower lease because the lease buyout company sent you an article that towers are technologically obsolete, we suggest contemplating where your site is and whether it could be readily replaced by multiple smaller sites. Every cell site or cell tower has a relative value based upon the difficulty of its replacement. An informed landowner, tower owner, or building owner will understand that relative value and make informed decisions on that basis. Steel in the Air, Inc can assist you as your trusted advisor in finding out your cell site’s relative value. If you are already a Steel in the Air client, please note that we will be providing a more detailed analysis of lightRadio and other potentially disruptive technologies that will be distributed in a new client newsletter we plan on sending out via email in the next few months.
The greatest impact from Alcatel’s press release is that now many zoning boards will be confronted with these articles when they evaluate new applications for zoning approval for a tower or rooftop site. “If cell towers are no longer needed, why would we allow this one?” an uninformed NIMBY might ask and a slightly less uninformed zoning board might ponder. So with this press release, Alcatel has now made it more difficult for cellular carriers who will buy this very product to get approval for towers in areas where lightRadio or other competing technologies won’t work anyway. Now that I think about it, perhaps that was by design.
PS- if you know of a way to make 3″ cubes float in mid air without physical support, let’s go get a patent.
Why is Clearwire Terminating My Lease- Part 2
February 18th, 2011 by sita Posted in cell tower ground lease, Clearwire | No Comments »A recent article about Clearwire in Wireless Week doesn’t directly address lease terminations by Clearwire, but does suggest some reasons that may account for the terminations. Clearwire is obligated by their license requirements with the FCC to build out certain rural areas. Hindered by poor retail sales, Clearwire doesn’t appear to have the funds to continue its aggressive build out. Furthermore, Clearwire’s partners aren’t likely to come to the rescue with additional investment given Clearwire’s questionably poor execution of the nationwide build strategy. (IMHO)
Since some of the lease terminations our clients received contained 6 month penalties for termination, we assumed that Clearwire would not be back soon. This article seems to confirm this. If you have a lease from Clearwire that has been terminated recently, we would not suggest counting on the revenue any time soon. As we stated in our previous article, there isn’t anything you can do about this. So just be patient and see if Clearwire comes back.
Why is Clearwire Terminating My Lease?
February 1st, 2011 by sita Posted in Clearwire, Uncategorized | No Comments »A number of landowners have been receiving termination letters from Clearwire for sites where Clearwire negotiated a lease agreement but failed to start construction. The letters simply state that Clearwire is no longer interested in the site and is terminating under the termination language in the agreement. For most owners this comes as somewhat of a shock because it appeared that Clearwire was actively pursuing the site.
From what we can gather, it appears that Clearwire simply ran out of money. Do a google search for Clearwire funding- and you will easily find numerous news stories about Clearwire having blown through their development budget and Sprint’s unwillingness to invest more in Clearwire. We aren’t saying that Clearwire is going bankrupt- but they definitely had short term funding issues.
A discussion with a Clearwire site acquisition agent indicated that he believed that the decisions were being made on a market by market basis. It appears that Clearwire executives have decided that some markets are more important than others and that they would have to prioritize. For instance, we heard that Tampa and Fort Myers are being put on indefinite hold so that other markets can be prioritized (like Miami). This agent suggested that it was likely that Clearwire would be back to restart our client’s terminated lease in the near future perhaps in a matter of months.
However, another client of ours in Phoenix received a termination notice for an unbuilt Clearwire lease. This client had a 6 month termination penalty in the lease agreement meaning that they will receive 6 months of rent upon termination. If Clearwire intended to come back to this lease in a few months, it would have made better sense to keep the lease going rather than pay a 6 month termination penalty. This suggests that Clearwire will not be back in a matter of months.
There have been numerous rumors swirling around lately involving some combination of Sprint/T-Mobile/Clearwire/Light Squared and mergers and acquisitions involving the same. If a merger was in the works involving Clearwire, we could see that it would make sense to terminate the unbuilt leases as network goals would need to re-prioritized. Interestingly enough- we hear that Light Squared projects were started and put on hold as well in at least some areas.
Unfortunately, for the landowner who received a termination notice, there is nothing that can be done. We don’t believe that these lease terminations are site specific or related to the lease rate. Thus, you can’t and shouldn’t offer Clearwire a reduced rent to try to encourage them to stay. Either they will be back or they won’t- and you won’t factor into that decision. Just keep the lease documentation and wait until to see if you hear from Clearwire again. If you haven’t receive a termination notice, than don’t do anything. Just let Clearwire build your site as soon as they ask. If you were negotiating a lease with Clearwire and they stopped contacting you, just wait. If you need help figuring out how much to charge Clearwire for their lease- please see http://www.steelintheair.com/Clearwire-Cell-Tower-Lease-Negotiation.html.