Verizon Backup Fiber Requests: How Landowners Should Respond.

Verizon's proposed fiber route on client's property.
Verizon’s proposed fiber route on client’s property.

We have been starting to see requests being made to our landowner clients where Verizon is seeking to get consent to add utilities.  Initially, the pitch is that Verizon needs additional fiber for advanced technologies.   When asked why they need a new utility easement across the property and why they can’t use the existing utility easement, Verizon indicates that they need backup fiber.  In short, they don’t want the backup fiber routed along the existing utility easement because it could be cut at the same time as the primary fiber.

The issue this creates for a landowner is that there are now additional easements run across the property that could inhibit future development of the property.   If every wireless carrier at a site does this- it would be easy to see where there would be a patchwork of fiber easements across the entire property.

Our guidance to landowners facing these type of requests is as follows.

  1. Don’t ever just sign the simple consent letter.
  2. Ask for full construction drawings showing the route of the fiber and any handholds or fiber boxes being added to the property.
  3. If you don’t mind the location, great.  If you do, ask Verizon to route it along a more favorable location on the property.
  4. Check your lease agreement to confirm whether you have any obligation to grant them another fiber/utility easement.
  5. If not, ask for compensation for the easement.  If you need help figuring out the appropriate amount, contact us.
  6. Ask whether you will be required to sign an easement with another utility company and if so, ask to see the actual document.
  7. Have that easement document reviewed by your attorney.
  8. Ask your attorney to add language that requires Verizon to relocate the fiber at their expense if you need to use that portion of the property in the future.

Verizon Small Cell for Comparison

As an addendum to our earlier article about Crown Castle and Mobilitie small cell proposed installations in Orlando, we thought it would be helpful to include a drawing of a Verizon proposed small cell from Massachusetts.   In this case, Verizon is installing a Cloud Radio Access Network (C-RAN) with two small cells to augment their coverage and capacity in the vicinity of an existing Verizon macrocell which is collocated on an existing SBA Communications tower. [Read more…]

Crown Castle (CCI) Small Cell Initiatives and Reporting

Crown Castle DAS Node
Picture of Crown Castle DAS Node from FCC Presentation by Crown

So as a clear indication that Wall Street is very focused on small cell initiatives by the public tower companies, Crown Castle
started reporting their small cell financials separately from their tower financials in the Q1 2016 quarterly earnings and call.   They must have been receiving a significant number of questions from the analysts because the earnings call presentation is carefully crafted to show a rosy picture even though Crown hasn’t been completely transparent on their small cell financials.

SOME VISIBILITY- BUT QUESTIONS STILL REMAIN

In general, we are excited to see them Crown add this reporting, as we have been suggesting to the various analysts that retain us that it is difficult to measure how successful their small cell efforts are without this breakdown. Unfortunately, Crown still isn’t distinguishing between small cells and DAS in the breakdown preferring to treat all DAS nodes and small cells as if they are the same and have similar financial attributes.  Interestingly, an analyst from Bank of America specifically asked this same question in the Q&A without getting a substantive answer.

What we do know from the earnings call is that Crown’s small cell business still amounts to approximately 12% of their consolidated site rental revenue similar to what it was in late 2015.  Crown indicates that new small cell builds amount to 75% of their small cell systems’ incremental revenue – while 25% is additional collocation on existing fiber routes/DAS networks. They suggest that they have 16,500 miles of fiber, but don’t disclose how many miles are actually used for small cell nodes or DAS.   CCI says they are focused on the top 25 markets which isn’t surprising given the location of Sunesys fiber in these same cities. This suggests a few obvious questions for CCI that were partially addressed in this call and should be expanded upon in future calls:

1.  How do they expect to grow once those 25 markets are complete?

2.  Now that the world is fully aware of the value of dark fiber and surplus capacity, is it reasonable to expect another fiber company acquisition?

3.  How many nodes are in top 25 markets or Central Business Districts (CBD) as opposed to non urban core areas? [Read more…]

This is Why We Think Crown Castle’s Acquisition of Sunesys is a Smart Move

Crown Castle International (CCI) is currently the #1-ranked cell tower company in the nation, and owns approximately 40,000 cell towers.  CCI receives most of its revenue from subleasing space on Crown cell towers to wireless carriers.   On April 30, 2015, CCI announced that it would acquire Sunesys, a wholly-owned subsidiary of Quanta Services, for $1 billion.   Sunesys owns or has rights to 10,000 miles of fiber in major metropolitan markets, with ~60% located in the top BTAs. [Read more…]

Biggest Issues for Small Cells: Leases and Backhaul

Small Cell Installation on Rest Station
Small Cell Installation on Rest Station

Alcatel-Lucent has created a database of 600,000 potential small cell sites.  They have coordinated with building owners, tower companies, cable companies, outdoor advertising providers, systems integrators, and managed services providers to list locations where the landowner, building owner, or tower owner are interested in leasing space for small cells and where there is fiber optic service in place already.   These locations would include towers, billboards, DAS facilities, rooftops, and other properties or structures that would accommodate small cells.  [Read more…]

Consent Requests for Fiber Optic Cable

Cell tower fiber optic easement
Example of unacceptable repairs by the tower owner after installing fiber optic cable

Building owners and tower ground leaseholders nationwide are being contacted on a regular basis by the wireless carriers and tower companies who occupy their property to grant access rights for fiber optic cable. As data demands increase dramatically, there is a need to improve the data throughput from the individual cell sites. The solution is to lay fiber optic cable, which is faster than traditional copper wire, less expensive, and more efficient than T-1 or DS3 lines. [Read more…]

Zayo Group and Md7 Proposes Rent Reductions to $0/mo.

In a bold effort, MD7 on behalf of Zayo Group sent a letter to a client of ours asking the client to reduce the rent for the fiber access lease on their rooftop to $0/mo.   Their argument (a weak one) is that they are more akin to a utility and should be charged like one.   Since you don’t charge the power company to come on your property, why would you charge Zayo? [Read more…]

Cox Communications to Enter the Wireless Market

In one of the first signs of good news that I have seen recently surrounding our market (other than self serving statements from public tower company executives at the PCIA conference), Cox Communications recently announced that it will build its own Cox Communications cellular network. Cox Communications spent $550 million to purchase spectrum in Atlanta, New Orleans, San Diego, Omaha, and Las Vegas along with a good part of Kansas and southern New Mexico. [Read more…]

Sprint’s Sublease of Sites- Part 2- Lightower

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.”

[Read more…]