Cell Tower Info Blog

Cincinnati Bell Wireless and Lazy Site Acquisition

2008-10-01T07:39:00.002-04:00

A potential client received a letter from Cincinnati Bell Wireless stating that they have reviewed the client's property and were potentially interested in leasing a portion of the property for their cell tower site. The letter includes a template lease from Cincinnati Bell Wireless and a request for the landowner to review the lease with his/her attorney first to confirm which clauses that the landowner might find objectionable. While this is understandable, Cincinnati Bell also states in the letter that legal review is a prerequisite to negotiating terms like rent or escalation. Meaning that the landowner either has two choices. First, they can assume that the lease rate will be favorable, call their attorney to review the lease and pay $1500 or more in attorney's fees before ever actually knowing whether Cincinnati Bell intends to pay them $100/mo or $1000/mo. Second, the average landowner might decide not to review the lease in order to save the money and indicate to Cincinnati Bell that they are interested. In this case, they might give up the right to thoroughly review the contract.

We object to this specific type of site acquisition as predatory. Cincinnati Bell Wireless is forcing the landowner to either spend money on an attorney before even negotiating the lease terms or putting them in a situation where more ignorant landowners will simply choose not to get legal representation at all. To us this is lazy and predatory.

Why not simply state in the letter what Cincinnati Bell Wireless is prepared to offer? Then the landowner can make an informed decision of whether the money spent on an attorney will be well spent.

From a landowner perspective, what is to prevent the landowner from simply lying about whether they have objections to the agreement so that they can get to the discussion of the rent and other financial terms? I can't think of anything.

Wireless Capital Shutting Their Doors?

2008-09-26T10:57:00.002-04:00

One of WCP's agents told us yesterday that WCP is closing its doors and will not be funding any of the deals for which it has signed letters of intent. He mentioned that he was told this on a conference call where he was let go earlier this week. WCP blamed the issue on the financial markets.

Allegedly, WCP will release individuals who have signed letters of intent from their deal if the landowner calls WCP and requests to be released.

If you have entered into a deal with WCP and would like to check out other options, please contact us.

Irresponsible School Boards and Churches

2008-09-15T14:37:00.003-04:00

At Steel in the Air, Inc, we have assisted a number of municipalities with cell phone tower lease proposals at schools. We have also provided guidance to a number of schools, both public and private across the United States.

To our surprise, in some circumstances there has been little to no public opposition to the proposal to place a tower at a school or a church. The surprise comes from the fact that rarely are tower proposals at schools and churches unopposed by local residents. These residents rally to the cry that "towers will cause unknown health problems in our children" regardless of whether they have studied the issue or not. This post is not to suggest that these parents are rationally protective or hysterically uninformed, but to suggest that schools and churches should know in advance that parents will in all likelihood object to the proposed cell phone tower at the church or school. And that such opponents can become very vociferous and actionable.

In a recent newspaper article, "Cell tower plan on tap for Middletown zoners" in the Ashbury Park Press, a local School Board requested that it's attorney send a letter to Verizon AFTER they had already signed a lease to allow a cell tower on school board property. "This letter is written at the unanimous direction of the Board of Education, to advise you that due to overwhelming pressure and expressed concerns from the citizens of Middletown, the Board is hereby requesting the cancellation of parties' Agreement prior to the completion of Verizon's application process and the Commencement Date of the Agreement." There are numerous other situations that we are aware of where the same thing occurred. Some of Steel in the Air's own clients have contacted us after they signed a lease to inquire whether they can terminate it because of significant public opposition. We now tell all of our school/church clients that they need to assess whether they can accept opposition from neighbors before they sign.

My issue with the position of the school is not that they would object to the placement of a tower on school property. It is clearly their right and obligation to protect the children at the school. While I believe that towers are fundamentally safe with rare exception, I don't question the board's right to make a decision that the income may not be worth it.

However, I object specifically to the ignorance of this school board in not considering the issue prior to voting to accept the lease. They clearly like the dollar signs but failed to consider the possible adverse reaction. All they would have had to do is read the paper or search the Internet for hundreds of stories whereby there was opposition to a cell tower on the basis of health. And in failing to do so, the board was irresponsible.

Since the Telecommunications Act of 1996 and subsequent case law prevents local zoning officers and boards from denying a tower proposal on the basis of health- the residents turned their anger to the school district. The School Board caved to the pressure of the residents and chose to not honor their word/contract with Verizon. In essence, their negligence may cost Verizon a minimum of $30,000 in site acquisition costs, architectural and engineering services, environmental review, tower manufacturer fees, and the like. In the end, this all could have been avoided had the School Board acted responsibly rather than on public pressure. A contract is a contract. I assume that Verizon could bring an action for breach of lease and for damages- but suit against a school district may not be an publicly acceptable course of action.

In the future, perhaps other school boards or churches might actually consider the potential ramifications from approving a cell tower on school district property before they simply negotiate fiscal terms and sign a lease. It would save both the wireless carrier and the school board a significant amount of aggravation.

Apple iPhone- Impact on Cellular Networks

2008-09-15T13:50:00.002-04:00

A little over 1 month ago, I purchased the iPhone 3G. This post is an admission that until I did so, I really didn't understand how this particular device has and will continue to change the very industry I work in.

Simply put- the device is amazing and is truly unlike any other device I have used. I count myself among the technical adapters and have used many so called "smart" phones over the last few years. None of these devices no matter how advanced they were remotely changed my data ARPU- but I can assure you the iPhone has. I have an unlimited plan and use it constantly.

I access full page regular websites regularly. (It is so convenient to be able to access a website while out of the house to look up a fact or reference item)

I check my stock portfolio a few times a week. (More than I do on my computers).

I am addicted to Facebook's "twitter" like "what are you doing" application. (the utility comes from having friends on Facebook- not the other way around)

I use Google Maps much more often when I travel because it is faster and easier to access.

I check feeds to a number of blogs- which I now do more often because I can check them while I have even a few minutes of downtime.

The only thing that I don't do more often than I did before was check my email. Why - because of the crappy keyboard and Apple's stupid auto correction for typing. I like that it pushes email- but hate responding to email on the device. (Apple- why not allow bluetooth keyboards?)

The long and short of it is- that until you have actually used the iPhone daily- you more than likely don't understand how device makers (not the carriers) will change our industry and increase ARPU. The iPhone is that groundbreaking. And until Verizon, Sprint, and T-Mobile get equally accessible and functional devices, they won't see the same uptick as AT&T does in data usage and return.

Wireless Capital Partners - Potential Woes

2008-09-05T09:13:00.006-04:00

In recent months, we have received numerous inquiries from cell site lease holders who have entered into letters of intent with Wireless Capital Partners to sell their leases. These owners have contacted us because they have had difficulty getting Wireless Capital Partners to close on the purchases in a timely manner. To be fair to WCP, in some cases, the landowners were given a non-refundable fee to "hold" the closing for up to 3 more months. However in other cases, these owners could not reach their agent at Wireless Capital Partners. These owners wanted to see whether there was anyone else that would close quicker.

On September 4, we were informed by a Wireless Capital Partners agent that the vast majority of the agents were let go. They were informed on conference calls that they would no longer be needed. Allegedly, there are some upper managers still left. Other associates in the industry have confirmed that they have received a number of calls from prior WCP agents looking for new employment last evening. This is after Wireless Capital Partner released a large percentage of their sales force just a few months ago. At that point the suggestion was that the minority of their sales force was getting the majority of their deals done- so they let go the majority that weren't getting deals done.

This doesn't bode well for Wireless Capital Partners. They confirmed previously that they were having some funding issues to us, but that those issues would soon be resolved. In the last few months, they haven't been. They still might be resolved, but prudent landowners should consider how long they can wait for closing on selling their lease. We suggest that landowners who are in negotiations with a Wireless Capital Partners representative for purchase of a lease discuss how and when your deal will be funded. Perhaps ask that the funds be placed in escrow. If you already have a deal that hasn't been funded, please contact us regarding getting other offers from companies that have not had funding issues. Make sure to read your letter of intent with WCP, you may have legal restrictions from getting other offers during the term of the letter of intent. If so, you might contact WCP and ask them to either honor their agreement with you or release you from it.

Wireless Capital Partners tells Landowners of Sprint/Nextel Credit Problems.

2008-05-02T18:40:00.006-04:00

So today, two seperate clients who are considering cell site lease buyouts from Wireless Capital Partners received emails from their WCP reps that has a cryptic message regarding Sprint/Nextel's credit rating being downgraded to junk bond status.

The messages include an attachment of a news story about the downgrade. One goes on to say that there have been some amazing changes for WCP since they approached my clients first and that pricing leases is a "moving target". The other doesn't suggest or tell why the story was sent. Neither really states why they were sent at this time.

I surmise that WCP is using the article to scare landowners into selling with the implication that if it happens to the mighty Sprint/Nextel it can happen to the other carriers. Secondly, I assume that WCP will either reprice their cell tower lease purchase offers for Sprint/Nextel leases or discontinue offers altogether. (EDITOR'S NOTE- 6-1-08- Since writing this post, it has come to our attention that WCP has simply stopped purchasing Sprint/Nextel leases. Contrary to what was written above- WCP's financing group simply felt that there was too much risk in owning more Sprint/Nextel leases in the WCP portfolio. WCP's business model is based around spreading risk on their leases and the Sprint/Nextel leases increased that risk too much. WCP is working on acquiring alternative financing for Sprint Nextel leases.)

If you are a landowner that has an offer from WCP for a Sprint Nextel lease- don't dispair. Contact Steel in the Air- because their are other companies that are still buying Sprint/Nextel leases. If you are concerned about your Sprint/Nextel lease as a result of this- remember that Sprint and Nextel has no value without its cell sites. So while there may be a risk of termination due to the merger and duplication of Sprint/Nextel cell sites- these sites still form the basis by which Sprint/Nextel service their subscribers. Without them, Sprint/Nextel will really be in trouble.

Steel in the Air, Inc. and the author are not affiliated with Wireless Capital Partners or Sprint/Nextel. If you reached this post while looking for Wireless Capital Partners- go to www. wireless capital. com (without spaces) or http://www.sprint.com/.

"Elf Tower Video"

2008-04-28T10:20:00.003-04:00

A video about cell towers- or as the maker of the video calls them "elf towers". This video speaks for itself.

http://www.youtube.com/watch?v=PNBKk-remxU&feature=related

Black Dot's New Pitch to AT&T Cell Site Owners

2008-04-04T14:30:00.004-04:00

According to a client of mine, Black Dot Wireless has a new pitch that they are trying on landowners with AT&T cell site leases. Most of these pitches, I don't bother to post. Today's pitch was so patently ludicrous that I felt it necessary to call them out on such a ridiculous statement. (even worse than the balloons will take the place of cell tower pitch) Black Dot is now claiming that due to AT&T's acquisition of a spectrum in the 700MHz auction, that AT&T will no longer need 9 out of 10 towers because AT&T's towers will now have an effective radius of 50 MILES. These unneeded towers will be terminated within 2 years. Of course, the only way that the landowner could protect his lease was to reduce it WITHIN 5 DAYS.

There is truth to the fact that 700MHz spectrum is more efficient than either the 850MHz spectrum or the 1900MHz spectrum that AT&T currently uses. But to suggest that AT&T will terminate 9 out of 10 towers within 2 years is reckless at best.

Hopefully, Black Dot's management and AT&T's management aren't privy to the fact that Black Dot's agent are making such completely unfounded and reckless statements. If they are, shame on them. And if you are a landowner reading this- you might consider contacting your state attorney general and asking whether Black Dot can legally make such misleading statements.

Please note that Steel in the Air, Inc. is not affiliated with Black Dot Wireless or AT&T. If you have found this post while searching for Black Dot- please go to www. blackdotwireless .com. If you are looking for AT&T- please visit http://www.att.com/

Sprint/Nextel & T-Mobile Merger in the Works?

2008-03-22T18:34:00.005-04:00

Analysts from Merrill Lynch suggested earlier this month that T-Mobile may be in a position to acquire Sprint Nextel. Here is our breakdown of reasons why we could see this happening and reasons why we can't:

REASONS WHY SUCH A MERGER COULD OCCUR

1. The declining dollar: T-Mobile is owned by Deutche Telekom. With the euro's increase in value relative to the dollar, the cost of acquiring Sprint/Nextel would be lessened.

2. 4th Generation Wireless: Sprint/Nextel's WiMAX spectrum and development. It is no secret that T-Mobile is fourth in the race to 3rd generation wireless. While Sprint, AT&T, and Verizon have already implemented next generation technology on a majority of their urban sites, T-Mobile is in the midst of their UMTS overlay project. With less spectrum than the other carriers, T-Mobile had to bid heavily in the Advanced Wireless Services Auction before they could start this deployment. With Sprint/Nextel- T-Mobile gets to jump to 4th generation wireless services without acquiring more spectrum.

3. Spectrum Auction Participation: T-Mobile did not win any spectrum in the recent 700mhz auction. Perhaps because they won a good deal of spectrum in the AWS auction- but it is conceivable that they gained additional comfort knowing that they would have access to the 2.5GHz spectrum used by Sprint/Nextel for WiMAX.

4. Sprint Stock Price: Sprint's stock valuation is pitiful. At $6/share, Sprint's market cap is $19.3 billion. However, Sprint/Nextel's assets are valued at over $60 billion. We believe Sprint's stock has taken a beating that may be worse than deserved. Perhaps T-Mobile understands this as well.

5. Number One: A Sprint/Nextel/T-Mobile merger would yield 83 million subscribers- making it the largest carrier in the US. AT&T has 70 million with Verizon at 64 million.

6. Sprint Inactivity: Based upon our anecdotal evidence from clients who approach Steel in the Air, Inc to assist them on new lease negotiations for rooftop cell sites or tower sites, Sprint is not doing any new site development as yet this year. This could be an indication that a merger is in the works and Sprint/Nextel doesn't want to expend capital on building new cell sites that will be duplicative to a T-Mobile site.

REASONS WHY SUCH A MERGER MIGHT NOT OCCUR

1. Foreign ownership: In 2000, when Deutche Telekom acquired Voicestream and re-badged it T-Mobile, there was regulatory and Congressional concern regarding a foreign company having ownership of a cellular network. This concern can only be greater if Deutche Telekom acquired Sprint/Nextel.

2. Antitrust: The FCC and DOJ might have anti-trust concerns regarding the merger of the 3rd and 4th largest carriers into the number one carrier. However, if the mergers of AT&T/Cingular and Sprint/Nextel and the FCC/DOJ's failure to force significant divestitures in either merger are an indication, this merger could fly through. Steel in the Air has polled a few other experts- who seem to mostly believe that a merger between Sprint/Nextel/T-Mobile would be approved.

3. Technology Soup: T-Mobile operates a GSM network, Sprint a CDMA network, and Nextel an iDEN network. It is believed by some of us that Sprint/Nextel's failure to smoothly integrate the two divergent networks is responsible for a large part of their current stock woes. The migration of all three networks would be a significantly difficult hurdle.

4. Sprint's Pride: Regardless of where there stock is- Sprint most likely believes like I do that their issues are temporary. The market has been particularly unkind to Sprint's missteps and failed to value Sprint/Nextel's considerable spectrum holdings and the prospect of WiMAX.

In the end, perhaps the merger of Sprint/Nextel and T-Mobile is just intriguing supposition. However, if this merger was to occur, it would have dramatic impact on the tower industry and on cell site landowners.

Are Crown Castle and WCP Working Together?

2008-03-17T21:59:00.005-04:00

In a tale of "strange bedfellows", we are starting to wonder whether Crown Castle and Wireless Capital Partners are working together. A letter that Crown Castle is sending out to its landowners warns of the pitfalls of dealing with various lease buyout companies. However, the letter has one noticeable buyout company not included in the list- Wireless Capital Partners. We assume that this is because Crown Castle and Wireless Capital Partners have come to an agreement whereby they have coordinated their efforts to negotiate lease buyouts.

We could see where this might make sense for Crown Castle. Because of the rigidity of their proposals for buying out their lease agreements, they typically must buy a perpetual easement. However, some landowners are rightfully scared of selling anything in perpetuity. That's where we assume Wireless Capital Partners come in- they offer their "non-recourse loan" for a shorter term purchase. The offer is less than Crown's offer, but the landowner doesn't have a perpetual easement on their property either to Crown.

So why should the landowner care? Because Crown Castle would not be working with Wireless Capital Partners unless they had something to gain from Wireless Capital. This gain might come at the disadvantage of the landowner. We surmise (but don't know) that Wireless Capital Partners has committed to Crown Castle that they won't increase the lease rates at the expiration of the purchased Crown Castle lease agreement. How does this negatively impact the landowner? Because as part of the WCP agreement, the landowner gives WCP the right to negotiate an extension to lease even if the extension is for a period greater than the amount of time granted in the non recourse loan. So WCP could bind the landowner to an extension of the lease that benefits WCP and Crown Castle, but is significantly undervalued as compared to what the landowner could get if he/she were aware of the value of his/her property to Crown at the expiration of the WCP non-recourse loan.

In our opinion, this "partnership" is not improper provided that WCP discloses any such relationship with Crown Castle to the landowner prior to any purchase of a lease agreement. If Wireless Capital doesn't disclose, than the landowner might end up selling to WCP without knowledge of what they are giving up.

If you have been approached by Wireless Capital Partners regarding purchasing a Crown Castle lease agreement, speak with your attorney to fully understand what rights you are giving up. Ask them what WCP's intentions are at the expiration of the current lease agreement. If you need help understanding the actual value of the lease buyout or what the lease should be worth after the purchased term, contact Steel in the Air.

If you have found this post while searching for Crown Castle's or Wireless Capital Partner's websites- please note that Steel in the Air is not affiliated with either entity. You can find more information about Crown Castle at http://www.crowncastle.com/ or for Wireless Capital Partners at www .wirelesscapital.com.

Sprint's Sublease of Sites- Part 2- Lightower

2008-03-14T07:56:00.004-04:00

Recently, a few of our clients have been contacted by agents of Lightower. Lightower was previously known as National Grid Wireless. These agents are requesting access to upgrade Sprint's "telecommunications capabilities from traditional "copper" based services, to those of 'fiber-optic' service."

In some Sprint/Nextel cell site and rooftop leases, this may be permitted, especially if the fiber is being accessed through the current utility/access easement already granted to Sprint/Nextel. Additionally, some Sprint/Nextel leases specifically require that the landowner grant additional easements if necessary to bring in telecommunication services.

However, Sprint/Nextel's blanket letter implies that all of Sprint's leases permit installation without additional compensation to the landowner. "As indicated in our Lease, License, or Site Agreement with you for access, please extend to Lightower (or their agents, bearing a copy of this letter) the same courtesies that you have previously shown to the Sprint/Nextel employees and/or technicians." The letters do not state whether a lease amendment is necessary and once you consent to the access and installation, you might be deemed to have waived any rights to compensation.

Lightower stands to make a decent amount of revenue by bringing fiber-optic service to the property, especially if there are multiple wireless users using the property. Whether Lightower's installation of fiber to the cell site constitutes an sublease of the property or not depends upon your existing lease agreement. You should contact your attorney to confirm whether they have the right to install fiber to the cell sites on the property or just Sprint's. If they don't have the right and you are discussing compensation and wish to know what to ask for, please contact Steel in the Air.

Sprint's Attempt to Sublease their Sites

2008-03-12T15:34:00.004-04:00

Sprint has been contacting landowners recently with existing Sprint sites and asking to modify the current antenna installation. They propose adding 2 parabolic antennas to the site. When asked, they suggest that the additional equipment is used in "support of" their 4th generation WiMAX technology. Yet a careful review of the proposed lease amendment shows that they want to modify the current lease agreements so that Sprint "OR ANY OF ITS AFFILIATED ENTITIES, SUBLESSEES, ASSIGNS OR CUSTOMERS" can use the Site for installing equipment, antennas and microwave dishes, air conditioned shelters, ect.

Basically, Sprint wants unsuspecting landlords to sign these agreements not realizing that they have now authorized Sprint to sublease to virtually anyone. (I am a Sprint customer- perhaps I can get a sublease on one of their sites).

Personally, I find this type of negotiation misleading. Why represent that Sprint wants to add equipment if in fact, they simply intend to sublease to a third party? The answer is relatively easy- otherwise landowners would ask for more money.

Before you agree to an amendment like this or a proposal to add more antennas to your cell site, make sure you consult an attorney who understands wireless leases to counsel you on what rights you are giving up. If you need help evaluating the value of a Sprint lease amendment for additional antennas, contact Steel in the Air.

WiMAX vs LTE

2008-03-03T07:00:00.002-05:00

Just read an interesting article on the Looming Battle for Broadband that discusses the state of WiMAX vs LTE.

BlackDot Wireless and AT&T Still Trying To Get Reductions

2008-02-09T07:23:00.000-05:00

Cell site lease groundowners who thought they had heard the last from AT&T and Blackdot after refusing to lower their ground lease rates are being contacted again by Blackdot Wireless with the same pitch- just a different angle. These landowners or building owners with AT&T cell sites weren't persuaded by the earlier pitch that AT&T and Cingular were merging and that there was possible duplication in the AT&T network that might lead to lease terminations.

Blackdot clearly believes in the old addage: If at first you don't succeed... because they have a new pitch to try to get some of the higher lease rate landowners to reduce their leases. Blackdot's people must have time on their hands, because the new attempt is a glossy document called a Site Appraisal Form that they have generated that attempts to show all of the other options available to AT&T in the nearby vicinity. There is a shiny map and a list of all possible alternative sites within 1 mile which also lists the lease rate that Blackdot "purports" that AT&T could get from either the tower owner or landowner.

Blackdot represents that AT&T has signed master lease agreements with Walmart and McDonalds to place towers on their properties at $1500/mo. They also represent that either Walmart or McDonalds will pay the relocation costs to move AT&T to their facility. The pitch is that if the landowner does not agree to the proposed reduction, that AT&T will move it's cell site to either a Walmart or a McDonalds because of the lower lease rate.

The Site Appraisal Form includes all types of official looking comparisons and graphs- like a Performance Index that shows the rent of the various options in graph form. There is a Current Lease Consensus- that looks like the threat level bar at the airport- which undoubtedly will show yellow or orange or red for every site they send it to. (Because that constitutes danger to the lease longevity)

The funny thing is that I doubt that the wireless carriers have ever even seen this form- and definately don't use graphs or threat bars to determine whether a landowner's lease is over market average. However, Blackdot does not show other lease rates that other landowners are receiving in the area- because that might show that in fact that the subject landowner's lease is not really that expensive.

Ironically, Blackdot is not even sure enough of its own information - there is a conspicuous statement at the bottom that states that Blackdot does not guarantee or warranty the accuracy of this information that they are using to try to convince the landowner that they need to reduce their rent. If they can't guarantee this information- how can they expect you to rely upon it to make a decision?

If you have been approached by Blackdot to renegotiate your lease, please contact us and we can help sort through the fact and the fiction behind the possibilities that AT&T would actually move to another location. We can evaluate what the costs would be for the relocation and whether it makes sense based upon the expected savings. Lastly, we can make suggestions on how to respond.

If you have found this post in error while looking for information on Blackdot and wish to visit their website- please insert www blackdotwireless.com into your browser. If you are looking for AT&T, please goto http://www.wireless.att.com/home/. If you are looking for McDonalds- http://mcdonalds.com/ or Walmart at http://www.walmart.com/. Please note that Steel in the Air, Inc. is not affiliated with Blackdot Wireless, AT&T, McDonalds or Walmart in any way. Blackdot Wireless, AT&T, McDonalds, and Walmart are registered trademarks of those companies.

WiMAX a precursor to Consumer Device Connectivity?

2007-12-15T09:06:00.000-05:00

The first WiMAX networks are planned to start in less than a week. According to Eric Lin of PhoneScoop.com, Sprint Nextel will “soft launch” its so called XOHM WiMax network in the next few days. Lin quotes Bin Shen, VP of Sprint Nextel’s Product Management and Partnership Development. Shen says “Chicago, Washington DC and Baltimore will all go live at soft launch.” Sprint Nextel thus keeps their promise to have a live network by 2007, even if the launch is non-commercial. On the negative side, wireless ISP Clearwire has announced they will not continue to partner with Sprint Nextel to develop WiMAX networks. In dropping their participation, Clearwire cited the complexities associated with the Letter of Intent they signed in July, 2007. Sprint Nextel seems unphased by Clearwire’s decision, saying they remain fully committed to deploying WiMAX networks and developing services for those systems. What might those devices and services be?

Broadband network cards and laptops with WiMAX chips seem obvious products. Dual mode CDMA/WiMAX handsets are also predictable. During the days of the Clearwire partnership, consumer electronic products such as digital cameras and portable gaming devices were to have Intel made WiMAX chips built in. TiVo like hard drive equipment capable of storing full length movies seemed also possible, along with real time video conferencing hardware. But what about special purpose devices? One such product is Amazon’s book reader called Kindle. It accesses the net to download electronic book editions. Air time is bundled into the price of the e-book, so a customer is not directly billed for access. A digital photo service could act in the same way. Photos might go directly from a camera to a hosting or processing service that would recover its airtime costs by building them into the goods it sells. One could also provide Internet access by charging for each session. Aside from the Kindle, this new business model, the first test of open networks, has not been tried by other companies. The notable exception is OnStar, provided by General Motors.

OnStar is a communications, monitoring and tracking service. Among other things, OnStar can provide voice communications, air bag deployment notification, help in an emergency, vehicle diagnostic assessment, stolen car location assistance, and remote door unlock. GM bundles OnStar’s cost into the price of a vehicle, or it charges a monthly fee. The customer pays GM, therefore, for a service, and General Motors in turn pays airtime costs to a wireless carrier. As noted before, this business model has not caught on, save for telematic services to utilities providing gas pipeline and electrical systems monitoring. In those cases, a monthly fee is charged each company for information provided over cellular radio networks.

It will be interesting to see if Sprint Nextel will have the financial ability to build out their WiMAX networks. Toptechnews.com says WiMAX accounted for about $31 million in expenses and $73 million in investments during the third quarter. This for a company that in the most recent quarter lost $500 million in revenue over the last year. 337,000 subscribers were lost in the last quarter alone. WiMAX technology may be visionary, but will any carrier have the funding to make it work?

Marketing of Cell Tower and Rooftop Sites

2007-12-15T08:39:00.000-05:00

Landowners who have a tower lease or a rooftop lease for a cell site are being contacted regularly by companies that allege that they can "Market" the cell tower or cell site for future use by other wireless carriers thereby increasing the revenue on the site. Many landowners we talk to are intrigued by the possibility of getting additional rent from additional cell site users.

We believe that these offers are rarely good ones for the landowner. If you have been approached by a company offering to "market" your land or rooftop, more than likely they just want to purchase your lease or get a fee for listing your property on a list. And after they purchase the lease or list the property, it is possible that you never hear from them until you are contacted directly by a wireless carrier who wants to lease your property or rooftop. At this point, regardless of the fact that the marketing company had nothing to do with getting an additional tenant on your roof or tower, instead of getting 100% of the revenue for your property, you get 50%.

We strongly recommend that if anyone suggests to you that they can acquire additional leases for you- that you ask them how many leases they have found for other landowners like you. Some companies represent that they have acquired millions of dollars in future revenue for their clients. Ask them directly how many leases they have acquired on behalf of their clients and how many clients they have. Ask how many people in their organization directly market their cell sites to the carriers. How many local representatives do they have in your city whose sole responsibility it is to call on the wireless companies? How many people do they have in the entire company whose sole responsibility it is to market cell sites to the wireless carriers?

If you have a tower that is owned by another company, ask them how they are going to be more effective at marketing your location than the tower company that owns the tower who has 50-100 people whose only job it is to keep in touch with the carriers to add more tenants to the tower.

If you come across any of the myriad of websites for represent that you can pay them a listing fee for marketing your site for wireless- ask the same questions.

Steel in the Air does not market cell sites- nor would we ever even try to. We could easily convince a few hundred of the 20,000 visitors to our website every month to shell out $100 to list their property with us- but we don't. We used to do property evaluations- and had a significant amount of interest in the service. We stopped because we could not stomach taking money from landowners who would never see anything in return for our services other than a pretty map.

If you want to increase your chances of getting other tenants on your rooftop or on the tower on your property- there are some things you can do for free. First see our page on how to get a cell tower on your property. There are links to the carrier websites where you can submit your information. Secondly, be patient. This industry is based around location, location, location- if your site is in the right location, the carriers will use it. If not- they won't. No amount of marketing will convince a carrier that your site is right for them when it isn't. And lastly, please don't contact Steel in the Air. We simply can't and won't help you market your site.

The Next Frontier: Consumer Electronic Devices with Cellular Connections

2007-12-03T14:05:00.000-05:00

In a seeming nod to the potential of an open access network for consumer devices, Verizon has announced that it will start to focus more on connectivity of consumer electronic devices similar to what Sprint announced with its XOHM plans.

Verizon will allow any device that meets minimum technical standards to access Verizon's CDMA network. If you recall from an earlier post on WiMAX with Sprint, this is what Sprint proposed to do. Both companies are excited about the prospect of high speed wireless connections to all type of devices and the prospect of the minutes of use that would come with those connections.

Recently, Amazon announced its Kindle e-book reader which uses the Sprint EVDO network (CDMA initially) to download books to the reader. In this situation, Amazon has worked out an arrangement with Sprint to pay for the network usage rather than the end user. It is easy to foresee future devices where the minutes of use cost is absorbed by the device provider.

Cell Tower and Cell Site Location Data: A Primer

2007-11-24T15:11:00.000-05:00

In reviewing some online commentary about cell tower location data on various forums and websites purporting to offer free cell tower location data, I thought it might be helpful to explain what is available and what is not available to individuals looking for cell tower and cell site locations.

CELL SITE VS CELL TOWER

Many people make the mistake of comparing “cell sites” and “cell towers”. I regularly receive inquiries from people who say they have a “cell tower” on their roof. What they actually mean to say with rare exception is that they have a “cell site” or cellular antenna site on their rooftop. A “cell site” is simply the antenna installation. A “cell tower” is the support structure upon which a single or multiple “cell sites” are installed. “Cell sites” can also be installed on rooftops, water towers, billboards, signs, hillsides, ect. (In rare cases, there are cell towers installed on top of rooftops.)

In the industry, we divide cell sites into three categories:

1. Rawland: A proposed site for a new tower which will accommodate multiple “cell sites” or “collocations”.

2. Collocations: The installation of a single carrier’s equipment and antennae on an existing tower.
3. Tenant Improvements: The improvement of an existing structure other than a tower. This can be a water tower, a building rooftop installation, or any other non-tower structure.

It is difficult to estimate the number of cell sites in existence. In a few previous posts, we have indicated the number of cell towers owned by the top 20 towers companies (as ranked by RCR who does a yearly informal and somewhat inaccurate poll), our article on estimates of the total number of cell sites owned by each carrier, and estimates of the number of towers owned by each wireless carrier.

COMPLETENESS OF TOWER DATA

To start with, there are no comprehensive tower databases that I am aware of, including Steel in the Air’s. We are contacted on a weekly basis by individuals looking to procure “cell tower” data. However, most of these people are actually looking for “cell site” data. They don’t need to know where towers are but instead want to know where each carrier has their sites. There are multiple reasons why they want to know:

1. Location Based Services (LBS): The wireless carriers are required by the FCC to be able to Enhanced 911 (e911) services for wireless devices which enables emergency providers to locate cellular handsets with a moderate degree of accuracy. Many entrepreneurs desire to use “cell site” locations and coordinates to establish locations for their wireless service. From the location of an individual cellular provider’s cell towers and cell sites, these entrepreneurs intend to triangulate their service’s user’s locations. Unfortunately, we are not aware of any commercially available service whereby this data can be purchased or is otherwise available except through from each individual carrier.

2. Comparison of Coverage: End users often want to know how strong the signal from a respective tower is in a given area. The carrier’s online coverage maps in some cases show strength of service to varying degrees but they rarely show specific locations for towers. And for those carriers that do show tower locations, they always only show those towers that they own that are available for collocation. In other words, they don’t show every “cell site”. In most cases, the towers shown only represent 20% or less of their complete network “cell sites”. Alternatively, some individuals with cell tower ground leases are looking to see whether a recent threat to renegotiate their AT&T/Cingular cell tower lease or Sprint/Nextel cell tower lease are predicated by the existance of other cell sites in the vicinity.

3. Competitive Cell Tower Location Data: Many of our clients are actually tower companies who need a competitive advantage in knowing what towers are in an area that they intend to either acquire or build a tower. While many smaller local tower companies can simply send someone to drive the area, when you are dealing with the acquisition of 500 towers, it is not feasible. To that end, we have consolidated 65,000 actual tower locations from numerous tower companies, wireless carriers, and government sources. Combined with the FCC data, that represents 125,000 actual towers. Some of these are publicly available, some are not. And unlike our competitors who provide listing services for anyone with a piece of property who wants a tower on it, when we suggest that a tower exists at a particular location, you are very unlikely to find a vacant piece of land that some realtor listed to get a cell tower lease.

4. Backhaul Alternatives: We are regularly contacted by entities that either own optical fiber rings or ones that are considering purchasing dark fiber to compare the location of fiber to the presence of cell towers and cell sites. These entities wish to determine where they can augment their income to provide backhaul services to wireless sites.

PUBLICLY AVAILABLE DATA

Many of the available online sources of tower data simply regurgitate the records available from the FCC. Please note that there is no requirement by the FCC or any other government agency to register individual “cell sites”. Cellular service is licensed by the region, meaning that the FCC grants the wireless carriers a general license for a county or other geographic region. As long as they conform to the frequency and power limitations of these licenses, they can build anywhere (with local zoning approval).

There are numerous types of data available from the FCC for antenna sites. However, these online sources do not distinguish between what the datasets provide. This appears to create a good deal of confusion between users. Below are some of the datasets provided by the FCC.

1. Antenna Structure Registrations. (ASR) Many of the free online sites for tower data use this as the base data. (Antenna Search.com, Cell Reception.com) Antenna Structure Registration is required by the FCC for those tower sites that pose a threat to air safety. In short, this means towers that are over 200’ tall or those towers that are within 5 miles of an airport. Accordingly, if a tower is under 200’ and is not within 5 miles of an airport, it does not have to be registered with the FCC. (For a indication of how many towers exceed 200' tall- see our previous post on cell tower heights.) It is important to note that ASRs are only necessary for towers- not cell sites. Oftentimes, the owner of the antenna structure or “cell tower” is not the wireless carrier, it is a tower company who built the tower or a tower aggregator like American Tower or Crown Castle who purchased the tower sites from the wireless carriers. To complicate matters, many of the FCC ASRs are not actually used for cellular communications. They can be two way radio towers or broadcast towers or other wireless internet service towers. There are approximately 110,000 antenna structure registrations.

2. Specific Frequency Licensed Locations. The FCC does require some wireless services to register individual locations. There are numerous databases available from the FCC on different wireless service types. For instance, most microwave installations require specific site registrations. Paging and mobile radio installations do as well. Some of the online services purporting to provide data about cell towers actually use the frequency databases. Unfortunately, these locations rarely equate to cellular towers or “cell sites”. So someone viewing these databases will end up paying for what they presume to be cell tower data and in reality they are paying for paging locations or two-way radio locations. (or even Ham Radio).

In essence, if you use the free services that regurgitate the FCC data, recognize that you are getting what you paid for. I personally would not waste my money on any service that offers to sell you the FCC data. (It is available for free from other online sites and can be downloaded from the FCC website for free, although the translation of the database is not simple.)

STEEL IN THE AIR DATA

We have assembled a comprehensive database of tower and cell site locations from numerous sources, including the public FCC data, FAA data, and tower companies that provide their data online. We also have represented over 1000 clients with cell site leases for a few thousand cell sites. For many of those clients, they helped fill in missing data in their area by driving around. In addition, we have independently gathered specific cell site from various sources including paying people to literally drive areas of interest and visually identify towers. Some of our data includes lease rate data, most of it doesn’t. We use our data to assist our clients with determining where cell sites are. In a number of cases, we don’t have complete cell site data for an area. However, we know how to “fill in the holes” and how to assess areas for existing cell sites. In short, we make it our business to collect cell tower and cell site data and create tower location maps. We don’t simply regurgitate free government data.

Sprint WiMAX in Jeaopardy?

2007-11-06T07:21:00.000-05:00

If you read our earlier post that reviewed the proposed WiMAX offering from Sprint, you might be interested to know that XOHM- the brand name Sprint is using for WiMAX may have a short future. With the turbulence at Sprint and their search for a new CEO, there are rumors circulating that WiMAX may be put on hold.

From our perspective, Sprint's plans for WiMAX are ambitious and necessary to advance this alternative technology in the United States. It is unfortunately that Sprint/Nextel have had such difficulties integrating their iDEN and CDMA networks.

Sprint had to expect that they would not be able to retain the iDEN users or convert them to CDMA. In my opinion, Sprint's customer service has traditionally been horrible (still is if my last visit to their retail store to pick up a broadband PC card is representative)- which has been been made worse by the fundamental issues of combining two disparate technologies and integrating two distinctly different customer service systems.

To further compound this issue, Sprint/Nextel have done little to improve the iDEN performance for those clients still using iDEN resulting in significantly higher than expected drops in subscriber numbers. Yet rather than build new towers and focus on network quality, Sprint/Nextel have lagged behind the other carriers in terms of new sites on air.

The unfortunate side effect of this is that Sprint is being hammered by the market, and WiMAX may be too ambitious a project that has little opportunity to provide short term return to justify continuing. I for one, hope that management is not too short sighted to pull the plug on WiMAX because without Sprint behind it, it will be doubtful that anyone else (including Clearwire) can acquire the adoption rates from subscribers to make this a ubiquitous technology.

Cell Tower Heights Across the US

2007-09-28T06:27:00.000-04:00

One of our clients contacted us to inquire about the average heights of cell towers. We did a quick analysis of the FCC tower data and came up with the following chart which shows the height of the cell tower (horizontal axis) vs the number of towers of that height (vertical axis). We thought we would share the chart as it presents an interesting visual on cell tower height.

Please note that this chart may not be indicative of the height distribution of all cell towers because the FCC did not always require registration of cell towers under 200'.

With XOHM, Sprint's WIMAX Plans Are Optimistic

2007-08-29T07:30:00.000-04:00

On August 16th, Sprint/Nextel spoke about their WiMAX plans during an investor call entitled "Sprint Ahead: The Technology Summit Call". The Sprint/Nextel WiMAX plans which they have named XOHM (pronounced zoam) are optimistic at best.

In reviewing the presentation- we were struck both positively and negatively with a number of the concepts and statements presented. First- from a general standpoint, the ambition of the project is impressive. Sprint/Nextel (along with the Clearwire WiMAX joint venture) envisions seriously competing with Verizon FIOS (fiber to the last mile) and the large cable companies to provide entertainment, voice, and data services to the end user. Sprint/Nextel believes that if XOHM is successful, electronics manufacturers will include WiMAX chips within common household products like TVs, DVD players, laptops/PCs and even household appliances.

There is dissension among experts in the industry whether a high speed mobile connection is actually necessary or desirable. Personally, I believe that a persistent mobile high speed connection will open new industries dedicated to servicing niche business and consumer needs that are not well served by landline connections like cable and fiber. This is different from Clearwire’s current service model which is referred to as nomadic. Nomadic means that the user must be sitting still to effectively use the service. This is not truly mobile and wireless. Sprint alleges that high speed IP connectivity will foster new applications and devices. I concur but I doubt that a privately controlled network will foster innovation. That is why I personally am excited about the 700MHz auction and the FCC requirements that some of the spectrum allow open access to unlocked devices to all programmers and users.

No doubt XOHM is ambitious- the better question is whether it is possible within the time frame Sprint envisions and before Sprint’s competitors develop their own alternatives. Sprint/Nextel and Clearwire both believe that it is possible and are betting over $5 billion in network investments. Their reasoning is clear- the cost to cover the last mile (the physical connection to the home from the main fiber or cable switches and lines) is significantly less expensive wirelessly than via cable or fiber- because there is no digging required. By leveraging their existing infrastructure of towers/switches ect., Sprint is in a great position to develop the network at a lower cost per end user than FIOS/Cable. Presumably the network will take far less time to build as well.

However there are some practical limitations that Sprint will need to overcome to succeed. We address some of the “optimistic” assumptions made by in the Sprint presentation:

1. Slide 46- Up to 10MB/s speed across the network- It is well known that data speed on WiMAX and other wireless data services diminish the farther the user is from the cell site. We have heard that WiMAX is only effective at distances of 1.5 miles or less from a WiMAX site. We see no justification by Sprint/Nextel that up to 10MB/s is possible from their existing infrastructure of cell sites which in rural areas are sometimes 7-10 miles apart. Does Sprint/Nextel envision building towers every 1.5 miles or less or do they simply plan on only covering the urbanized areas that can support the site development necessary to provide this service. We surmise it is the latter.

2. Slide 22- "2.5GHz provides a balance across coverage and capacity" Sprint is suggesting that the 2.5GHz spectrum meets the two hallmark goals of wireless system design, coverage and capacity. Users expect that they will have ubiquitous coverage so that the user can access the network anywhere they go. Users also expect that the network will have the capacity to be able to handle their call along with those of every other user on the network when they want it. Industry experts suggest that 700 MHz provides better coverage at a cheaper cost than 2.5GHz spectrum. Sprint/Nextel’s assertion that 2.5GHz is more effective than the 700MHz spectrum for capacity issues is intended to quash the naysayers who point to the upcoming 700MHz auction as potential competition to Sprint/Nextel's 2.5GHz WiMAX plan. While Sprint/Nextel confirms on slide 22 that 700MHz requires 1/3 fewer sites to provide coverage, they allege that 700MHz requires 10-15 times more sites to handle the same number of users as a 2.5GHz system. We assume Sprint bases this statement on the current capacity standards for PCS/cellular base stations which are equipped to handle the significantly lower bandwidth required by voice and data today. If Verizon or Google or another carrier were to win a large chunk of 700MHz spectrum, you can be assured that equipment and antenna vendors would develop equipment with capacity that would meet or exceed Sprint/Nextel's current WiMAX equipment standards.

3. Slide 23- End user equipment cost will not be subsidized by Sprint. Sprint envisions that the equipment manufacturers will manufacture devices with cheap WiMAX chips inserted. Unlike cellular phones, which are heavily subsidized by the wireless carrier, Sprint can simply design specifications for the chip that the manufacturer inserts into these new devices. The end user will bear the cost of the chip when purchasing the device from the local retailer. For this to occur there has to be a significant adoption of the service- which means that the experience must meet the technical expectations of the early adopters which include consistent connectivity and data throughput speeds. These early adopters must rave about it publicly-and see the upside in having devices with internal WiMAX chips. Furthermore, Sprint must be prepared with better customer service if and when the expectations are not met.

4. Slide 47- Over 80% of the expected $2.5 billion in revenue expected by Sprint from WiMAX will come through new lines of business. For WiMAX to succeed this will have to be true. Sprint’s current PCS business consists virtually entirely on servicing cellular users who rarely use the advanced network functions on their current phones. Data adoption has come slower than expected but is finally ramping up. Current 3G cellular networks are sufficient for most users to access email and limited internet browsing. So for Sprint/Nextel to succeed they must find new market niches that aren't being filled by existing services. This is entirely possible. I frequently think that I would be willing to use my phone for browsing if the speed were faster. I also believe that a constant always-on connection to our cell tower databases and maps and our customer manager system would be worthwhile. Neither of these is really feasible on existing cellular networks.

5. Backhaul Issues- Slide 36. Sprint fails to address any specifics about the technical needs for backhaul from the individual WiMAX sites to the network. An individual cell site needs between 5 and 8 T1- equivalent phone lines to transfer a few hundred simultaneous voice calls and data use between the cell site and the switch to the landline system. Each T1 line handles approximately 1.54MB/s of data and cost hundreds of dollars per month. Yet somehow Sprint expects to handle up to 10MB/s for EACH user with numerous users per cell site. We can't even fathom the number of T1 lines necessary for WiMAX type services to a few million end users. Currently, it is not a problem for Clearwire who has around 299,000 subscribers and promises nowhere near 10MB/s. If any reader can tell us what the number of T1 line equivalents is necessary to provide this type of service, we will be happy to credit your contribution. To be fair to Sprint, this is not a problem that is unique to them- any competitor has the same issue. A number of companies have been trying to address these issues wirelessly like FiberTower and TowerStream.

Provision of WiMAX services are a tall order- and Sprint is betting that being first to the table (with Clearwire) will give them edge over competing services. If they can meet the technical hurdles listed above and establish a large enough market share prior to their competitors entering the market- then perhaps WiMAX will meet Sprint and their investor’s expectations. Sprint seems to be going it alone at this time as the other carriers take a wait and see approach. I applaud their ambition- and as an early technical adopter- will anxiously keep an eye on their progress to see whether XOHM is a service worth adopting.

AT&T to Build Cell Sites in McDonald's Arches?

2007-08-22T07:12:00.001-04:00

We have received recent inquiries from AT&T cell site owners who have been approached by Blackdot to renegotiate their leases. Of course, there is a new pitch, because the old pitch that the merger between AT&T and Cingular was going to cause terminations just doesn't ring true anymore.

The new pitch by Blackdot Wireless is that AT&T has now signed deals with McDonald's, Walgreens, and other miscellaneous large landowners at a fixed rate which allegedly is cheaper than the lease that AT&T has with the landowner. While the pitch is flawed, there is some reality behind it. AT&T has master lease agreements in place with large multi-site landowners and is looking to reduce their high dollar rents by looking at alternatives.

However, the savvy landowner should not take Blackdot's pitch at face value. There are radio frequency engineering criteria that must be met for each site. The criteria may not be met at the burger joint next door. Furthermore, it may be difficult if not impossible to get approval for a new tower in the area. Lastly, at some point, the costs of relocating the site outweigh the savings to be gained by the relocation on a monthly basis.

If you have been approached by Blackdot Wireless on behalf of AT&T to reduce your rent recently, we can assist you by evaluating the following:

1. Whether your cell site lease rent is significantly high
2. Whether AT&T could relocate the site and still meet their engineering goals
3. Whether the local municipality would even allow the relocation
4. Whether the relocation would cost more than would be justified by the savings in rent

Please contact us to discuss any offer from Blackdot Wireless related to your AT&T cell phone tower lease.

Subprime impact on Cell Tower Valuations and Cell Tower Lease Buyouts

2007-08-17T07:29:00.000-04:00

It appears that the subprime issues will have an impact on the wireless/tower sector particularly regarding cell phone tower acquisitions and cell phone tower lease buyouts- especially for the mom and pop side of the industry. We suspect that 1/4 to 1/3 of the new tower being built this year come from Mom Pop tower companies or individuals.

One of our associates mentioned that they have definitely seen a greater number of restrictions on commercial loan terms. As interest rates rise and loan covenants become more restrictive, small borrowers will find it more difficult and more expensive to borrow to build a tower or finance other business or non-business related purchases.

Meanwhile, the large tower companies and lease buyout firms who have fixed cost of capital will be sitting in the proverbial cat-bird seat. As the disparity between their cost of capital and the small borrower's cost of capital increases, the buyouts or the tower acquisition offers will start to look more attractive and in some cases absolutely necessary for those who have extended too far or assumed that they could get low cost funds to finish an existing project. This could have the affect of reducing cell tower valuations.

Water Tower Cell Site Lease Buyouts

2007-08-04T10:08:00.001-04:00

We recently provided a consultation for a municipality that was pondering the sale of its cell tower leases on its water towers and electric transmission poles to a lease buyout firm. Like many municipalities, this particular city was looking at the lease buyout as a means of increasing available funds without raising taxes.

The lease buyout firm had offered approximately 9 times the annual rental income for the rights to these leases for 30 years. We advised them on what the proper amount of the lease buyout should be were they to go forward with the lease buyout firm's offer. We also advised them that if their goal was to maximize the lump sum, that they were better off considering the sale of the "wireless asset" entirely. Since a municipality would not have an interest in selling the water tower- we suggested that they could sell the current wireless leases and the potential for future leases.

By offering the sale of the "wireless asset" (like a cell tower), the municipality could capitalize on the robust tower market and open the bidding opportunity up to 10-15 more bidders. (There are only a few lease buyout firms). By doing so, the municipality would receive higher offers- possibly ranging to as much as 15 times their annual rent.

The transaction would be structured as the purchase of a fixed term easement- say for 30 years. The municipality would sell the current and future rights to lease the water tower to wireless carriers for that period of time. In return they would receive a higher lump sum today. The easement would mirror the current leases. The purchaser would have the opportunity to market and collect income from any wireless tenant using the water tower. Given that some of the lease buyout firms request 50% of the additional revenue as part of the purchase of the site, the municipality was in essence selling the additional 50% for almost a 60% increase in the purchase price.

Clearly, the municipality gives up some rights with the sale of the easement. However, these rights should mirror those given up in the existing leases. If the leases prohibit unauthorized access to the water tower or set established times when the sites can be accessed, those can be in the easement as well.

This is not the ideal solution for all municipalities- but if the goal is to maximize the lump sum from the sale of the existing leases on the water tower, than it may be appropriate. If you are a municipality and are considering the sale of your water tower leases, please contact us for a free valuation of your water tower cell site leases.

Google will Prosper in an Era of Disruptive Change in Media (and Wireless Telecommunications)

2007-07-20T14:47:00.000-04:00

My apologies to Bruce Benson from FTI Consulting for ripping off the title of his fascinating white paper entitled- "Couch Potato Famine- Prospering Through an Era of Disruptive Change In Media."

His article is an excellent analysis of the impact of three forces that will profoundly impact the distribution of media and which I believe will have an equally great impact on the wireless industry. He points to Open Standards, the Proliferation of Broadband, and the Emergence of Many to Many Networks. The article describes how YouTube and its role in content aggregation is crumbling the "walled garden of the broadcast paradigm". The ability for users to immediately create and distribute media to a wide user base is already starting to have the impact of of nominalizing the large incumbent producers.

So it is no huge leap of faith to foresee the possibilities of extending the ability to create and share media from the mobile devices that accompany us everywhere. Nor it is difficult to prognosticate that instantaneous access to this content will become a necessity, especially for the younger generations.

The wireless carriers in the United States have attempted to corral the use of these services under their "bucket of minutes" and under their umbrella. (Anybody recall how worthless and frustrating AT&T's MMode was?) Rather than embrace that free access to media would increase the minutes of use on the network- the carriers tried to create clunky WAP websites that funneled users through a limited set of options.

Google however, sees the light and has different ideas. It has proposed to the FCC that it would spend $4.6 billion on the upcoming 700 MHz auction provided that the FCC modify its rules. These changes would include:

"Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
Open networks: Third parties (like Internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee's wireless network."

Google clearly sees the possibility of open networks and the role of its search on these networks. Not to mention the ability to use the algorithms that control the display of ads in divesting radio frequency to individual companies with innovative (or non-innovative) ideas on a piecemeal auction type basis. Whatever the results of Google's efforts, one thing is clear. Whoever dominates this auction will be better equipped for the vast need of additional bandwidth that will be required in the upcoming years.