Municipalities and Public Utilities: How to Respond to Requests for Modifications
In the past year, many of our municipal clients believe they have been bombarded by requests from wireless service providers (WSP) with whom they are engaged in cellular leases, to modify equipment on cell towers, water towers, and rooftops owned by the municipality or utility. These beliefs are not unfounded. Here is a list of typical equipment modifications and technological upgrades requested by each of the Big 4 carriers during the past three years:
- AT&T: LTE- Initial, LTE-700MHz, LTE- AWS Spectrum
- Sprint: LTE-Initial (Network Vision), LTE-800MHz rebanding, 2.5GHz
- T-Mobile: LTE-initial, LTE-AWS
- Verizon: LTE-Initial, LTE-700MHz and second carrier, LTE-AWS Spectrum
On average, there has been approximately one request per year per WSP. Compound that by the number of leases each municipality or public utility has with each WSP, and the requests may seem endless. Every time a WSP needs to make changes, the formal requests include one or more of the following additions and/ or replacements:
- Cabinets in the Base Transmitter Station (BTS)
- Antennas on the Cell Site structure (typically resulting in significantly larger antennas)
- Antenna Mounts
- Remote Radio Heads (RRUs) or Remote Radio Units (RRHs)
- Coaxial or Hybrid Cables (for backhaul)
- Surge Protectors
- Microwave Dishes
Replacement antennas can sometimes be double the size of the previous antennas. Collectively, new antennas and remote radio units can add 500 lbs. or more of structural loading to the structure.
The process utilized by the WSPs is as follows: They typically send a letter to the structure owner (rooftop, tower, or water tower) suggesting that they would like to make minor modifications which are necessary to keep pace with technological advancements. The letter references the need for the WSP to remain competitive, and often implies that these modifications will enable the WSP to continue operations at the site. Furthermore, there is a very vague suggestion that the changes are allowed under the lease; however, in our experience, WSPs make this claim regardless of whether the lease actually contains any such allowances. And exclusively, these letters NEVER make an offer for additional fees or increase rent, even when such increases are clearly expected under the lease agreement.
If you are a municipality or public utility engaged in a cellular lease with an WSP, and you receive this type of Equipment Modification letter, you should first request the following:
- Construction drawings illustrating the equipment that is in place now, as well as what will be added.
- A structural analysis of the structure’s ability to support the additional weight of the new or replaced equipment.
- A structural analysis of the mount’s ability to support the additional antennas and RRUs/Surge protectors (The mount for the equipment may not be included in the structural analysis for the structure.).
- Specification sheets (AKA “cut” or “spec” sheets) for the existing antennas and RRUs, and for any new equipment or antennas or RRUs that are being added to the structure.
- Identification of the specific language by which the WSP believes that it is not obligated to pay fees or increased rent for the proposed modifications.
Once you have received documentation above, it is important that you review it carefully to confirm that the structural analysis and the construction drawings match. Furthermore, it is important to review your existing lease(s), and any executed amendments to ascertain what rights the WSP has in making changes on the structure. If you believe that the WSP has met their obligations and they have the right to make the modifications without additional compensation, then, and only then, you can sign the consent letter, provided that it references the specific construction drawings that you reviewed and approved.
If you aren’t sure whether the WSP has the right to make the changes or don’t know how to read the structural analysis or construction drawings to fully understand the proposed equipment being installed, please reach out to us. We have experts on staff who have reviewed hundreds of these requests. We can quickly review your lease agreement and their proposed equipment modifications, and advise you on whether the WSP has the right to make the changes. We can point to the specific language in the agreement that does or does not allow the changes. If the WSP is prohibited from making changes or the proposed equipment exceeds the scope of the lease, we can advise you on the appropriate lease rate to charge for the changes.
Not only do we review what the fair market value is for the specific changes, we also evaluate the lease itself to determine whether you are receiving fair market value for the lease. If you aren’t receiving what you should for the lease, we will recommend that you ask for more for the changes. If you are receiving higher than market rent, we will advise you on whether you should agree to less than fair market value for the proposed changes.
Should you retain us, we can complete our assessment typically within 7-14 days of receipt of the requested documents. If we find that the WSP hasn’t provided the correct documentation, we will reach out to the WSP’s agent and ask for it, with your approval. We will handle the heavy lifting while letting you focus on the core business decisions of the utility or the municipality. Our typical fee structure to review a proposed modification is around $2,500 for a single review, with reductions based upon the number of expected reviews.
If you would like to see a redacted sample of our assessments, please don’t hesitate to reach out to us. We would also be happy to provide references from other municipalities or utilities that use Steel in the Air to handle all their modification requests.