Counties, Municipalities and Public Entities

T-Mobile Sprint Merger Backup Plan?

June 12, 2019 by Ken Schmidt Leave a Comment

One of our municipal clients has a water tower with T-Mobile and Sprint on it. T-Mobile has proposed to add antennas and equipment with Band 41 (Clearwire 2500 MHz spectrum) to T-Mobile’s rad center. See the image below with the antennas that service B41. Because the lease the client has with T-Mobile prevents the addition of new antennas, they are required to get an amendment. T-Mobile is seeking to have the amendment signed prior to the merger confirmation.

For us, it is difficult to price the amendment because the lease does not allow restriction of equipment based upon the specific frequency, but only on the size, weight, and the number of the antennas. Thus, if the merger occurs, we can make it more difficult for T-Mobile to merge the equipment and terminate the Sprint lease, but not impossible. However, if the merger does not occur, if the client signs an amendment that could allow Sprint to terminate their lease regardless of what happens with the merger.
When we inquired with the T-Mobile agent about making the amendment contingent upon the merger happening or not, we were told that T-Mobile’s legal department would never agree to such a limitation.

Is there a backup plan like spectrum sharing?

T-Mobile’s desire to sign the amendment but unwillingness to make it contingent upon the merger makes me wonder whether there is an alternative plan in the works in the event that the merger is not consummated. This could be a spectrum sharing agreement. This isn’t unprecedented- see this article. But in that case, the spectrum to be shared was PCS spectrum (1900 MHz), not Clearwire’s spectrum (2500 MHz). Thus, the existing agreement would need to be revised or a new one entered into.

Sprint has the spectrum but is a dead company walking without additional capex to deploy 5G. Over time, the distinction between those who invest in 5G specifically in densifying their network will prove greater than that with LTE and 4G. T-Mobile desperately needs mid-band spectrum as running 5G on 600 MHz will be sufficient in areas where there isn’t a significant amount of traffic but will limit their overall network performance elsewhere.

So What to Do?

First, off, it is hard to generalize a course of action that works for every site. Each situation will be different and tied to the specific lease language and exhibits. In this case, the easy but ultimately unfruitful answer is to either reject the request altogether or ask that the amendment rent match that which would be lost with a Sprint lease termination. T-Mobile won’t agree to the latter option so the only option we see is waiting until there is further clarification on the merger . The lawsuit filed yesterday by 10 states against the merger may delay the process and certainly makes the merger probability less certain.

We are curious about what others have done or will do in a similar situation. If you have successfully negotiated through this issue, please either leave a comment here or contact us or private message us if you don’t care to take it public.

One Step Forward, Two Steps Back; Verizon’s Small Cell Agreement with Syracuse

May 27, 2019 by Ken Schmidt Leave a Comment

As a resident of the Syracuse area, I am excited to see Verizon and their interest to bring 5G via 600 small cells to our fair City. However, in their rush to try and become the “first fully 5G city,” the City of Syracuse seems to have bent over backward when entering the agreement with Verizon for small cells throughout the City. Make no mistake, there are benefits to becoming a 5G city, but this agreement no more means Syracuse will be the first fully covered 5G city than it does for other cities where Verizon promised the same thing when pitching similar lease agreements. But at least some of the other cities didn’t enter into such a one-sided agreement. For example, see agreements entered into with Sacramento, San Diego, or San Jose, each of whom receives better terms and conditions than Syracuse did and will have a robust small cell deployment as well.

SYRACUSE COULD NOT PREVENT VERIZON FROM ADDING SMALL CELLS TO ITS RIGHT OF WAYS

It is important to realize that Syracuse really didn’t have much choice of whether to allow Verizon to access the city public right-of-ways and structures due to the FCC’s Third Order regarding small cells. While the City could have negotiated a higher amount for the pole access rights or permit fees, they would have had to demonstrate that their actual costs in reviewing small cell applications and maintaining the right-of-ways were higher than the nominal fees allowed for in the FCC Third Order. As it stands, the City had to reduce its annual fee for small cells from $950/year to the FCC mandated $270/year. Over the next 10 years, that means that the City will receive $1.6M from Verizon instead of $5.4M for the small cells.

BUT THEY COULD HAVE ENTERED A LESS ONE-SIDED AGREEMENT

Our concern isn’t that the City entered an agreement for 5G or that they did it with Verizon. Our objection is with this actual agreement. It seems that the City was so anxious to become a leader in 5G that they ignored the obvious issues with the agreement. Here are our concerns with this agreement:

The City has granted rights to Verizon for upwards of 45 years when it didn’t have to. The city signed a master license agreement is for 20 years, with a very limited right for the City to terminate the agreement. The master agreement details the general rights of the parties and is for 20 years. Then there is a separate pole license for each pole that will be used or installed that runs up to 25 years from the date the pole was installed. Thus, if a pole is installed in year 20, it will be there for another 25 years thereafter. In short, the City is entering a possible 45-year agreement. However, there is no requirement in the FCC Third Order about the minimum number of years a City must sign an agreement for. While Verizon surely prefers a much longer agreement, there are other cities which are entering much shorter 10-year agreements with Verizon. Here we question what benefit, if any, the City gets from a longer license agreement. Verizon retained the right to terminate “at any time for any reason or no reason by written notice to the City,” but the City does not. So, in essence, the City is now committed to this specific agreement legally, regardless of what happens with technology in the future. While there is a limited right to terminate if a court of law or Congress revokes or repeals the Third Order, this is narrowly drafted.
The agreement entered into by the City concedes unnecessary rights to Verizon under contract law. The agreement is substantially the same as other agreements proposed by Verizon to other cities. It attempts to incorporate many of the standards from the FCC Order into the license agreement. The issue here, from a legal perspective, is that these clauses did not need to be in the license agreement. If Verizon felt the city was not adhering to the FCC order or was discriminating against Verizon, Verizon by default has the option of requesting relief from the FCC or filing in federal court for injunction or damages. However, by adding the language in the license agreement, Verizon can now file in state court on a civil claim if Verizon believes that the City is in breach of the agreement. There is absolutely no benefit to the City of Syracuse to including this language in the license agreement.
Other cities have received additional compensation in the form of public safety or IOT monitoring and services, higher fees to help pay for additional staff to review small cells applications. The City of Syracuse received nothing. In fairness, the other cities are bigger and more important to Verizon than Syracuse. Nonetheless, the only concession Verizon appears to have made to the City of Syracuse is the requirement for Verizon to monitor a limited set of small cells for compliance with applicable radio frequency emission standards. There are no actual commitments by Verizon to deploy a certain number of small cells by any date. No requirement to deploy in the poorer areas of the city. No smart city initiatives or commitments to fund research on how 5G can benefit the residents of Syracuse.
The agreement gives the City very limited rights to terminate even if health risks are identified and proven in the scientific community. Syracuse procured limited rights to have Verizon monitor their small cells to confirm they comply with the FCC, ANSI, and OSHA requirements regarding radio frequency emissions. The City, in what appears to be an effort to appease its citizens that small cells are safe, inserted language that requires the testing of the small cells to confirm that they meet the minimum applicable health, safety, and radio frequency regulations. Verizon is required to test up to 5% of all installed poles each year to confirm they comply. Meanwhile, the City is allowed to test any pole themselves for compliance, but they already have this right to test any small cell without the agreement. Conceptually, there could be clear evidence of harm from small cells but no change in the applicable regulations and the City would be powerless to terminate the agreement until the small cells no longer meet the regulations. While we don’t believe that there are health risks from small cells, that doesn’t mean that the issue could not have been addressed better in the license agreement. Alternatively, if the license agreement was shorter in term, the City could have simply terminated at the expiration even if there were no regulations. By agreeing to a long-term license with limited rights to terminate, the City could be legally committed to Verizon small cells in the public right of way even if there is ample evidence of why they should be removed.
By agreeing to such a one-sided agreement, the City has condemned itself to agree to similar agreements with ANY company providing wireless services who want to deploy in the ROW. Under the FCC Order and previous case law regarding the Telecommunications Act of 1996, the City may not discriminate between similar providers of wireless services. By agreeing to the terms with Verizon, the City will have a difficult time agreeing to different terms with other providers regardless of what happens or doesn’t happen with Verizon.

It seems to us that someone was motivated to push this through quickly. Verizon would have entered the agreement without many of the concessions that the City willingly agreed to. Again, while 5G coverage over the City is an admirable goal, this particular agreement is overreaching and could have been drafted better on the City’s behalf. The proliferation of small cells requires careful management by cities. As we have pointed out before, Verizon was on the winning side of the FCC 3^rd Order and cities are on the losing side. This particular agreement though could unnecessarily put Syracuse even further on the losing side. As a resident of the Syracuse area, I applaud the City entering an agreement with Verizon for small cell deployment, just not this particular agreement.

Akron, OH May Sell Water Tower and Cell Tower Ground Leases

December 6, 2017 by Ken Schmidt 1 Comment

The City of Akron has decided to sell its cell tower and water tower leases to Everest Infrastructure Partners. Curious who they are? The founders are previously from Tristar Investors- a company that purchased easements under tower company towers in order to sell them back to the tower companies. I can’t say whether Everest has the same business model. What is interesting though is that Everest paid a pretty penny for these assets.

Why Cities Should Think Hard Before Selling Leases

Typically, we advise cities against selling their leases because the sale limits the ability of future city councils to use the underlying properties as they see fit. For example, in this case, the City of Akron won’t be able to tear down these water towers at the end of their life or redevelop the underlying properties where the towers sit. That may not be an issue in this case depending upon the location and age of the properties/water towers. We also advise against selling of leases because the buyout offers for the leases aren’t nearly as high as what Everest Infrastructure Partners paid here. With this type of multiple of cashflow, this transaction is more like that of a tower acquisition than a traditional lease buyout. That’s because Everest gets the current and future revenue from these structures and properties that were sold and the City gets none.

But Cities May Not Have a Choice

Of course, there are many cases where cities like Akron don’t have another immediately accessible source of funding that doesn’t require raising taxes and must turn to liquidating assets like these cell tower leases. Here the City of Akron was facing a significant cash crunch. We have worked with two other Ohio cities that also ended up selling their leases. In both cases, they evaluated whether the location of the tower or water tower would potentially impact future expansion or development plans. After evaluating the potential sale, they determined that they could live with the future obligations.

The Lease Buyout Market is Back

Another point of interest is that the lease buyout market is getting frothy- we are seeing more entrants and higher offers than at any time in the last few years. For example, we just received a call from a company that had shut its doors and has now found funding to buy leases again. If you are considering selling your lease, it may make sense to look at doing it now. If you need to know more about lease buyouts- we have a very handy and complete website about the subject- www.celltowerleasebuyout.com.

Give us a call and we can help you ascertain the market value of your lease and walk you through the options related to selling.

Not So Fast- California Governor Vetoes Small Cell Bill.

October 18, 2017 by Ken Schmidt Leave a Comment

Sunday night, California Governor Jerry Brown vetoed a contentious statewide small cell bill (SB649) which is one of many similar bills already passed in eleven other states. The bill would have removed local control over the placement of small cells and would have limited the fees that municipalities could charge for access to municipal pole infrastructure to $250/year.

This veto is fairly significant as the legislation has sailed through most other states without much influential opposition. The wireless industry has been targeting states for such relief from what they deem to be costly and time consuming small cell jurisdictional review and fees. In our opinion, the FCC seems to prefer that states regulate the fee structure but may choose to preempt local siting restrictions and approval process. AT&T has been the primary proponent of these statewide initiatives and has brought to bear a very well-financed and aggressive lobbying campaign at the state level to help push such legislation through.

The bill can still be pushed through with a 2/3rd majority in both assemblies. The bill passed the Senate by a 22 to 10 margin with 8 votes not recorded. The bill passed the Assembly with a 46 to 16 margin with 17 votes abstaining. If the vote occurred today with the same members voting as they did before, they would override the veto. Historically though, the California legislatures have been unwilling to override Governor Brown’s vetoes.

Why is this significant?

• California has more cities with difficult zoning that almost any other state in the US.

• California is near the top in terms of average small cell fee. This is not surprising given #1.

• California represents 12% of the US population. If one assumes a conservative total of 500,000 small cells to be deployed in the US and assumes that deployment will follow population, 60,000 of them will be deployed in California. Rates for small cell leases in California typically are 10 times higher or more than what the bill allowed at $250/year.

• Small cell deployment tends to follow areas of dense population. Of the densest urban areas of over 1,000,000 population, the top three are in California with five total in the top 10.

Before you assume though that this portends poorly for other statewide initiatives, we are cautious to point out that California cities tend to be more influential in statewide politics and that the opposition to the small cell legislation was by far the most organized and substantial as compared to that in other states.

Impact on Carriers (T, S, VZ, TMUS)

Despite industry rhetoric to the contrary, this won’t stop 5G nor will it prevent deployment of advanced technologies in California. None of the wireless carriers will allow California wireless throughput or quality of service to languish while customer’s churn to the best network in their area. However, this will delay deployment of small cells in California vis-à-vis other states that have passed small cell legislation although we don’t expect the delay to be material. There will be a negative impact on Opex for all carriers if the veto is not overridden and another bill is not passed in its place.

Impact on OEMs and E&C Companies (COMM, NOK, ERIC, MTZ, DY)

OEMs and E&C would have benefitted from the looser regulatory environment in CA both in terms of timing and amount of small cell and fiber investment. Ultimately, small cells will be deployed but perhaps in fewer numbers.

Impact on TowerCos (AMT, CCI, SBAC)

There will be a slight improvement on lease-up in California for the public tower companies as wireless carriers may choose to add short-term capacity via new macrocells on towers and existing structures as the Opex for a small cell stays higher relative to the Opex of a macrocell.

Et Tu, Brute? Verizon Appears to Have Hired Accenture to Renegotiate Cell Tower Leases Using Same Tired Threats of Relocation

July 28, 2017 by Ken Schmidt Leave a Comment

Photo of Cell Tower — A cell tower with a substantial amount of equipment at the third RAD center

A municipal client, who has multiple public safety towers upon which Verizon is colocated, received a call and letter from a Verizon representative asking for reduced lease rate terms and escalation. The letter is on Verizon letterhead and does not make clear the relationship between Accenture and Verizon but refers to the Accenture employee or contractor as a "Verizon Representative." However, in the email from this representative, the signature block is for Accenture. We surmise this means that Verizon is using Accenture instead of Black Dot or Md7 to renegotiate its leases. This is disappointing because Verizon has historically chosen not to stoop to these types of misleading negotiation tactics. And lest you think it is because of the ever more competitive wireless industry – Verizon still generates a very healthy 45.7% wireless profit margin.

The letter states:

As discussed during your recent call with ________, a Verizon representative, we are currently reviewing our real estate portfolio to assess market rates and trends. To remain competitive and provide the best value to our customers, we propose to modify our site lease terms, based on our knowledge of the market and our analysis of each site as follows:

It further goes on to state (and this is the funny part):

Additionally, for all sites identified in this document, payment of rent shall include the following equipment rights:

30,000 square inches wind load surface area at the RAD center (if available);

10’ tip to tip RAD, if available. If not, space available up to 10’;

All you can build fixed fee amendments for the contract duration within the allotted tip to tip vertical and 30,000 square inches wind load surface area;

16 cables;

No additional rent or fees for any additions or modifications to equipment throughout the contract term as long as the equipment rights identified above are not exceeded.

If we can't reach an agreement, we will remove you from our relocation list as we continue to evaluate our real estate portfolio.

As always, there is the implicit threat of termination – although carefully couched in language that doesn't constitute an anticipatory breach. So in essence, Verizon wants 30,000 square inches of equipment space in their 10' RAD center along with 16 cables. So no matter how much capacity this reduces on the tower or how much a tower owner would have to pay to structurally upgrade the tower to accommodate it, Verizon expects not to pay any additional fees. Generally, this is ludicrous and no tower owner should ever agree to this loading, regardless of whether they end up negotiating more favorable rent terms, in order to ensure the longevity of the lease. We aren't suggesting that Verizon may not eventually relocate some cell sites, just that it won't be that common and will be reserved for situations where they can save enough money by moving to justify the substantial expense of doing so.

In this case, our municipal tower owner will be telling Verizon that they can keep their name on the relocation list. There is no chance on any of them that Verizon will end up moving. If you receive one of these Verizon/Accenture letters or calls threatening to renegotiate your lease or relocate the tower, please contact us.

City Says That If Mobilitie can Build a Tower in 2 Days, They Can Also Remove it in 2 Days.

May 10, 2017 by Ken Schmidt Leave a Comment

You can't make this stuff up. Mobilitie allegedly erected a new mini-macro tower in Goliad, TX – which we posted about on LinkedIn previously. Subsequent to that, this story regarding Sprint approving a trial for Mobilitie to build mini-macro small cell towers without full regulatory compliance is found by reporters at Event-Driven.

In this case, Mobilitie claimed to the County they had all permits. City officials from Goliad investigate and find that Mobilitie did not build the tower in County limits but in the City. City officials then demand that Mobilitie remove the tower or they will do it for them. Mobilitie claims that they needed 2 weeks to do so- to which the City replied

“your firm constructed the tower over a two-day period, on a weekend. Surely, if you could install the tower in two days, you can dismantle it in the same time period.”

Not only did Mobilitie fail to build the tower outside City limits, they may have even failed to build it straight. As reported in the Goliad Advance-Guard, local homeowner

Harvey also claimed the tower is leaning to the north. Blueprints for the installation require a foundation 31 feet deep into the ground; Harvey who says he has had years of experience mounting poles, says a driller will hit bedrock at the 10-foot level.

County officials claim that this type of overnight tower erection was happening in other areas. See the quote below from the Advance-Guard.

“And it’s not just our community, it’s happening in San Patricio County as well,” City Alderman Nathan Lill told the group. “There’s list of other counties that have had the same issue with this exact same company. They’re building the towers at night and they’re not asking permission from anybody to do it.”

This isn't the only place where Mobilitie has been either fined or forced to remove what is alleged to be an improperly permitted tower- it has occurred in Baltimore, MD, and Denison, TX.

Sprint’s Really Odd Antenna Configuration Proposal

May 5, 2017 by Ken Schmidt 5 Comments

On one of our municipal client's towers, Sprint submitted a request to replace three existing antennas with new antennas that add 2.5GHz capability to their equipment. The subject tower is in a difficult zoning jurisdiction and one where Sprint really doesn't have any other options. Their collocation rent was on the higher side but not unreasonably so- and the three other wireless service providers were all paying the same or higher rent.

Because the antennas were the same size or smaller, we did not recommend a rent increase for them. However, Sprint was adding remote radio units and other equipment so we recommended a fairly nominal increase. Rather than accept the newly proposed lease terms, Sprint instead asked whether they could replace the existing equipment on the tower with three of these antennas and get a reduction in rent.

Sprint Proposed Canister Antennas — Possible Sprint Replacement Antennas

The proposed antennas are larger than the existing antennas, but Sprint appears to be wanting to go from 9 panels to 3 of these antennas. (Not 3 of the canisters) These panels will accommodate all of Sprint's spectrum bands but would seemingly limit their capacity and number of simultaneous users. These appear more suitable for a mini-macro as opposed to a macrocell, but I would welcome any thoughts readers have regarding this topic.

At the end of the day, we advised the client that the value of their tower is its unique location, not the specific loading that Sprint is placing or removing from the tower. Obviously, there will be situations where a reduction in loading or equipment would justify a reduction in lease rate, but this isn't one of them.

FL State Representative pushes Small Cell Legislation while his City Issues RFI on Leasing City Property for Macrocells

April 27, 2017 by Ken Schmidt Leave a Comment

In the Florida House of Representatives, a bill is being pushed through to significantly limit the control that a local municipality can exert over small cell installations. The bill also limits the fees that a city may charge for access to municipal poles.

In committee hearings, Rep. Nicholas Duran (D-Miami) said that the “City of Miami actually is the second worst city in connectivity—digital divide—in our state and in this country in many respects, so for me, this is a question of how can we break down this digital divide.” While the goal of decreasing the digital divide is certainly an admirable one, one has to question how likely it is that small cells will be deployed in areas that don't already have sufficient wireless coverage. Certainly, increasing capacity in underserved areas is beneficial. However, the bill doesn't encourage or regulate where small cells are deployed, letting the industry decide on its own where they should go. One has to question whether this specific bill will remedy the issues related to the digital divide, especially when considering how the wireless companies tend to deploy infrastructure in the areas where they profit most, not where lower income and disadvantaged people reside. For an example of this, see this article about how AT&T deploys fiber differently to rich and poor areas.

Simultaneously, Miami/Dade, the combined City/County government in which Rep. Duran resides issued an RFI for the management of City/County owned properties. This specific RFI has been debated for years. Various requests and meetings have been put forth to the wireless industry over that time frame with the City/County choosing not to move forward for various reasons. We previously attended a meeting at Miami/Dade ourselves.

Image of Miami Dade RFI Request — From Miami Dade Website

The irony here though is hard to miss. First, in delaying this RFI/RFP process for years, Miami/Dade has missed out on a significant amount of interest in its property. Secondly, if the Florida legislature is successful at reducing the fee structure for what municipalities can charge for access to their poles, Miami/Dade will not only get far less than it would have without such legislation but it will also reduce the effectiveness of the RFI. Respondents will have less incentive to respond because there is less incentive for wireless companies to build macrocells on public property if they can use the ROW at virtually no cost. Furthermore, with the fee cap, Rep. Duran's specific district and its taxpayers will generate less revenue while incurring additional incremental costs from having to manage and maintain poles that were built with taxpayer money but which are being used by private companies for profit.

Obviously, this is a tradeoff that Rep. Duran and others could have legitimately decided was worth taking. We aren't trying to criticize him or anyone else for making that choice- just trying to point out how complex the issues related to small cells and densification are for state legislators. While the wireless industry has been successful at simplifying them to "you are voting against technological advancement", the issues aren't remotely that simple and there will be far-reaching but inherently local impacts for years to come.

Top 10 Things the Wireless Industry Doesn’t Tell You about Small Cells

April 11, 2017 by Ken Schmidt 7 Comments

By Ken Schmidt, Omar Masry, and Rick Edwards

Are you a homeowner who's recently received a notice indicating that a new small cell antenna is going to be erected on or near your property? Or a lawmaker who has received one of the industry's new opinion papers about small cell antenna regulations? Or an FCC Commissioner who is considering small cell rule-making? Before you start citing from or buying into the pretty pictures and bright-eyed economic projections in the opinion papers below, you should know that these industry-commissioned studies do not tell the whole story:

1. CTIA – Enabling the Wireless Networks of Tomorrow

2. CTIA – How 5G Can Help Municipalities Become Vibrant Smart Cities

2. WIA – Small Cells on Pole Facilities

What's wrong with them, you ask? Plenty. Here are the top 10 things the wireless industry doesn't tell you about small cell antennas:

#1: Despite the wireless industry's calls for collocation using shared infrastructure, in practice, carriers apply for individual small cells instead of shared infrastructure like DAS.

Small cells are standalone individual cells that can be installed separately. They're like miniature cell towers but without the tower. Like towers, a small cell requires both an antenna and equipment. Unlike towers though, the wireless industry likes to place the transmission equipment on the utility or other support structures. In effect, this means that the installation of small cells must either increase the visual blight of the pole or increase the diameter of the pole if the equipment is put inside.

Distributed Antenna Systems, in contrast, typically require less substantial infrastructure attached to each pole and can be more easily made to resemble street lights and signs (like the examples in #2). Common equipment can be placed within a centralized hub conveniently located underground or outside of view. Whereas small cells are single user installations, carriers can share DAS nodes. Multiple wireless service providers can share a DAS node, and multiple frequency bands (Carriers) can be facilitated on each node. This reduces the total number of sites needed and makes each site more attractive because most of the transmission equipment sits in a shared offsite DAS hub.

Given the benefits of DAS, you might wonder why the industry would prefer to build small cells instead of a constructing a DAS? There are 5 reasons – some of which are legitimately problematic for wireless carriers and some of which just require increased investment or time but aren't beneficial to the bottom line.

Reason 1: Each wireless provider has different objectives and may not need the same locations.

Reason 2: Each wireless provider has different deployment times and requiring DAS may force one carrier to wait if others are not ready.

Reason 3: DAS systems cost more because they're designed for the requirements of the most advanced user. So if carrier A needs feature X, even if carrier B doesn't, then the system will include feature X.

Reason 4: DAS systems require a concentrated, coordinated effort and someone to lead it.

Reason 5: Small cells are easier to deploy. DAS applications are reviewed in total – meaning that an objection to any part of the DAS application holds up the entire request.

The result: Providers submit applications for small cells even in downtown, urban core areas where DAS makes more sense. In some cases, providers apply for permits on adjacent poles where it's obvious that a DAS system would reduce visual clutter. Or even submit for new poles adjacent to other light/utility poles of similar height to avoid paying the rate schedules published by municipalities.

The map below shows the actual number of small cell application locations within the City of Houston by four different wireless entities. In a dense urban area like this – why not propose DAS nodes that all entities can share and decrease the number and impact of these facilities on the community?

The wireless industry needs to actually collocate rather than just talk about collocation. Furthermore, the FCC and cities themselves should mandate collocation when multi-carrier small cells are technologically feasible.

#2. The wireless industry associations want standardized federal, state, and local rules but don't even standardize themselves.

The wireless industry demands standardization of state and local government laws related to the erection of small cells. Their opinion papers suggest that without standardization, wireless applicants will be hit with a patchwork of wireless siting regulations. So they're putting forth a multi-pronged approach:

1. Distributing Industry-Friendly Sample Ordinances

2. Lobbying Heavily at State Level (see ALEC)

3. Submitting a Petition for Relief to the FCC (see Mobilitie)

4. Lobbying Heavily at the Federal Level

The wireless industry alleges — without providing any quantitative analysis — that most municipalities are applying costly, antiquated macrocell regulations to small cell applications. While many smaller municipalities do not have small cell policies in place at this time, that is because the wireless carriers aren't building many small cells in smaller towns and villages. But many larger municipalities (and those where 90% of small cell deployment are occurring) have begun to implement small cell regulations or will do shortly.

At the same time, the wireless industry's applicants can't even submit consistent small cell applications to their municipalities. It's blatantly hypocritical. For example, some cities report receiving location maps showing new small cells in the middle of ponds or on footbridges or in areas that are under another city or county's jurisdiction. Some applicants are not even submitting site-specific applications – instead submitting the same drawing over and over. If the wireless industry believes that standardizing the permitting process is necessary, they should be willing to standardize their own small cell antenna configurations and requests as well. All applications should provide for and include the same information so that the municipality does not have to ask multiple times for the applicant to complete the basic information. Every application should include a structural analysis wet-stamped by a state licensed engineer demonstrating that the new pole or existing pole is structurally sufficient for the current loading. Plans should include where power is coming from and how power will be metered, or better yet be subject to an unmetered wireless rate or utilize wireless smart metering

The WIA and CTIA should encourage standardized applications and requirements among their member constituents. But we believe their approach should not just consist of lobbying states, the FCC, and local governments. These organizations should work towards drafting common application requirements and best practices for their constituent members. They should then discipline or reprimand those members that do not follow such practices. Most importantly, wireless industry associations should focus on assisting member entities in developing and using shared infrastructure.

#3. What the industry installs looks vastly different than what they say is possible.

You may remember this article that went viral where Buzzfeed compared the fast food company photos of their food vs. what the consumer actually received.

Similarly, the wireless industry's glossy pictures show an idealized implementation that is far different from reality. Their reports showcase integrated poles with small cells contained within or Distributed Antenna Systems (DAS) nodes with an off-site equipment hub. These appear slim and attractive (relatively speaking). However, when these same wireless carriers or small cell companies submit the actual drawings and applications, the installations do not look anything like those pretty glossy pictures. Or, after they install the attractive poles, they bloat the view with additional equipment, creating a visual blight.

For example, below are photos promoted in the WIA Small Cell document. (Note these pictures are DAS nodes- not Small Cells – see #4 below)

Compare those to photos of actual small cell installations. They are nothing like the photos shown in wireless industry propaganda.

The reason for this is twofold: First, the industry likes to show pretty photos of DAS nodes because they are actual possibilities, even though the wireless carriers and tower companies are increasingly abandoning them. Wireless carriers are instead building small cells which usually have more equipment on the pole than DAS's central hub. Second, in many cases, the applicant omit to mention a part of the equipment that's to be mounted near or on the pole either because they're rushed or because they don't want to answer objections. The municipality is left holding the bag – inspecting each constructed small cell in order to confirm whether the applicant exceeded what they were authorized to install. Don't believe this actually happens? Look below to see what the industry submitted as a photo simulation versus what was eventually installed.

#4. Once a site is erected, they can go back and increase its size ad nauseam provided that the changes do not exceed federal standards.

Once a small cell or DAS node is attached to a pole, the wireless carriers have the right under Section 6409(a) of the Middle-Class Tax Relief and Job Creation Act to expand their equipment. In other words, once a site is built, municipalities have little power to restrict further expansions of the pole's small cell antenna equipment if the applicants stay within the limits of 6409(a). Moreover, wireless companies can request to expand an unlimited number of times. So even if a small cell starts off looking small and svelte – it could be expanded in size immediately without the municipality being able to stop the expansion. And this can happen over and over again.

A GIF showing steps in a tower being expanded — How a small cell can be expanded into a mini cell tower.

Below is a photo showing what a small cell looks like after multiple expansions.

#5: The industry claims that wireless development will not occur without major policy changes. But in fact, wireless development has occurred and will continue to occur even without those changes.

Historically, the industry has made the same argument over and over again: that they will not be able to deploy infrastructure if wireless siting laws aren't loosened. They suggest that most any regulation that slows down wireless deployment limits technological advancement. The industry puts out derisive blacklists of cities and counties that one or more wireless company believes make it difficult or expensive to deploy wireless infrastructure. They label these cities as technologically backward and lobby decision makers to convince them that their city will not grow with such technological restrictions. For example, see this quote from Gary Jabara of Mobilitie about municipalities or counties who aren't receptive to Mobilitie's proposals to erect 120' mini-macro small cells in their city or county.

Nonetheless, even in expensive markets with incriminating reviews like the one above, small cell deployment still occurs. Wireless companies still build towers or even find private locations for rooftop cell sites. A quick examination of Verizon or AT&T's coverage map will show very few holes in urban or suburban areas.

Furthermore, in most states (35 or more) wireless companies have access to utility poles which are subject to pole attachment rates prescribed by the federal government. These pole access rates are fairly reasonable; they are typically less than $500/year per pole. However, working with the utilities can be time-consuming, which is why the wireless industry is pushing for easier access to municipal poles. Isn't it odd that wireless carriers claim to be utilities but aren't actually using utility poles?

Even in markets like Baltimore, MD where the small cell rates are somewhat high compared to other US cities, Baltimore is still receiving small cell applications at a pace comparable to communities with closer-to-average rental rates. In other words, while the industry claims that higher rates impede technological advancement for a city, the reality is that wireless carriers still build small cell sites and many of them. While small cell deployment would likely happen quicker with revisions to regulation and cheaper access to municipal structures, make no doubt about it, the development would occur either way.

#6: The industry labels any request for cost reimbursement or rents by a municipality as a "money grab" all while the industry itself is generating $60 billion in profit per quarter.

We participated in a meeting between one city and members of one of the national wireless trade groups. The trade group decried the city's rent requests for access to taxpayer-funded infrastructure as a "money grab." Meanwhile, each of the wireless carriers has generated 20% profit margins or better in recent years – with at least one generating margins over 40%. The Big 4 wireless carriers alone are generating nearly $60 billion a year or more in EBITDA margin while the wireless industry combined generated $85 billion.

To argue that municipalities are money grabbing by charging a reasonable price for access to publicly-funded infrastructure by for-profit entities is disingenuous at best.

If one assumes the industry is constructing 20,000 new small cell antennas a year, even if each pole fee was $3,000/year, the wireless industry AS A WHOLE would only lose out on $60 million or less than .1% of their annual profit. Yes, you read that right,- less than 1/10^th of 1 percent of their annual profit.
To put in perspective, Verizon and AT&T alone spent half that amount on lobbying alone in 2016. (see Open Secrets for AT&T and for Verizon)

These arguments seem even more duplicitous when you see the headlines put out by the wireless industry that extol the tremendous revenue opportunities from 5G and other advancements. For example:

The Qualcomm "survey," says the 5G future will support up to 22 Million Jobs and $12 trillion dollars of goods and services.

Cisco says 50 billion things will connect to the internet. Read this article on why the hype on the number of connected devices is overblown.

CTIA citing an Accenture analysis suggests that 5G stands to create 3 million jobs in the US while yielding investment of $275 billion and encouraging GDP growth of $500 billion.

Simply put, the industry has every right to attempt to negotiate with municipalities for cheaper access to taxpayer funded and maintained municipal poles. But if they insist on making it about money, we believe those same taxpayers and municipalities should be prepared to point out the hypocrisy in their claims.

#7: The wireless industry wants to pay less for their small cell permit applications yet still receive faster review timelines from understaffed cities and counties.

Historically, we estimate that most cities rarely received more than 50 applications for new wireless sites per year from 2000-2015. Even in the boom years of 2008-2010, cities may have received just 150 applications for new wireless facilities. Contrast that to today: we have confirmed that the City of Houston received over 700 applications in 2016 alone for small cell infrastructure.

On the one hand, the wireless industry politely (or not so politely) asks for a quick turnaround on small cell antenna applications (complaining to the FCC and state representatives when they don't get it) but then on the other begrudges municipalities for charging fees to review the applications. For those of you not entrenched in the minutia of municipal red tape, these requests for the use of infrastructure or placement of equipment are rarely identical from one application to the next. Some companies are very good at drafting thorough and complete applications, but most are not. No matter what size the project is, the items to review in each application are the same. Each site still needs to be reviewed for structural, electrical, and physical safety.

Without standardization by the industry, these applications can't be reviewed easily. This, in turn, increases the cost to the municipality for reviewing such applications. The industry wants the best of all worlds – to submit hundreds of applications simultaneously, have those applications reviewed quickly regardless of their quality, and pay as little as possible for the city to review them.

Some members of the wireless industry have suggested that cities do not need to review the applications thoroughly as the wireless entities already do so internally. For proof of how ineffectively self-regulation works in the wireless industry, look no further than the 2007 Malibu Canyon fire which was caused by utility poles that were physically overloaded with telecommunication company antennas and equipment. Apart from safety concerns, the proliferation of poorly designed small cells can also degrade historic districts and draw noise complaints from neighbors when a carrier with loud cooling fans is mounted on a pole a few feet from a bedroom window.

#8: The wireless industry extols the wide-ranging benefits of the Internet of Things (IOT), smart cities, and self-driving cars, but fails to mention that many of these benefits can be obtained using current LTE-based technologies.

First, let's be clear that there are absolutely many wide-ranging benefits from 5G and small cell densification. Truly mobile IOT won't happen without wireless industry investment. No other private or public entity can or will develop sufficient wireless infrastructure in the US to enable pervasive low latency communications. Without wireless industry investment, remote control of sensitive machinery or vehicles simply won't occur. Self-driving autonomous cars will be possible but without the gains in safety and efficiency that would occur from a truly smart network of connected cars.

However, you can get the benefits of low bandwidth, non-essential IOT or smart city sensors and functions without small cells at all (or at least with fewer of them). The CTIA (Accenture) study above cites the benefits using smart meters and smart lighting. These include traffic management systems, public transportation location-based tracking, real-time public parking information, and gun-shot recognition. These are all benefits to be gained from IOT. However, neither Accenture nor the wireless industry makes any attempt to quantify or distinguish which smart city and IOT initiatives require wireless industry involvement and which don't.

Furthermore, these studies don't even remotely acknowledge which IOT benefits can happen on today's LTE networks versus those that need more robust densification of sites to occur. The wireless industry leads you to believe that you need the innovations they want to sell you to get any of these advances of the future. That is inaccurate.

#9: While the wireless industry claims densification of small cells is needed to enable smart city and IOT functions, they don't tell you that mobile video is the primary use of small cells both now and in the future.

Cisco, in its 2017 Global Mobile Data Traffic Forecast Update, indicated that video currently makes up 60% of mobile data traffic. Moreover, they forecast that three-quarters of the world's mobile data traffic will be video by 2021. Ericsson's own study states that mobile video traffic represents 55% of LTE/5G data traffic now, but is expected to grow to 95% (yes- 95%) of mobile data traffic by 2021.

Cisco states further that 50 billion IOT devices will be connected to the internet within 5 years. However, only 1.5 billion of these devices will have cellular connectivity. We have seen forecasts from other sources that IOT mobile data use will grow to 8% of total network mobile data use by 2021. In other words, IOT functionality only drives less than 10% of the bandwidth need for small cell densification.

This raises the question: how many small cells are necessary to enable Smart City and IOT initiatives versus how many are really needed to densify networks for the next generation of fixed wireless to home and mobile video? For further information on why mobile and fixed wireless video is so important to AT&T and Verizon, see this article on the wireless industries efforts to compete with the cable companies.

To be clear, we aren't suggesting that mobile video or fixed wireless are inconsequential. Without the revenue generated from mobile and fixed wireless video, the wireless industry would not have the incentive to invest as much Capex in their wireless networks to enable some of the truly amazing IOT and smart city use cases – especially those that require low latency or secure and ultra-reliable communication.

We are, though, suggesting that any indication by the wireless industry that 5G and small cell densification is primarily about IOT and smart city functions is a half-truth at best. The reality is that small cells densification is more about paid consumer and commercial video than it is about IOT or smart cities.

#10. The industry is willing to push select information about small cells but not willing to respond to substantive questions from municipalities.

Before a recent meeting began between one city and 20+ representatives of wireless and tower companies, each side exchanged questions. The wireless industry provided 30-40 questions to the city, and the city provided a list of 15-20 questions to the industry. The city's questions were fairly straightforward:

What do the wireless providers see in terms of other cities that require rental payments?

How many small cells does the industry contemplate installing in the city over the next 5 years?

What type of infrastructure/antennas does the wireless industry expect to need on the poles?

The city responded to all the industry's questions with substantive detail. In return, only ONE company responded to the city's questions. And most of those responses were cop-outs – claims that they couldn't answer due to competitive concerns. CTIA/WIA provided a glossy presentation that discussed all of the overarching benefits of IOT and 5G, but failed, for the most part, to provide any substantive and direct answers to the questions posed by the city itself.

At the end of the day, the wireless industry wanted to poke holes in the city's effort, but was unwilling to answer important questions that would have helped the city review and revise its own policy.

How can any city reasonably be expected to plan and prepare adequately for small cell infrastructure when the wireless industry continues to provide limited substantive information?

So Where Does this Leave Us?

Municipalities need to realize that wireless investment in small cells should be encouraged and reasonably managed and that doing so requires investment in staff and resources. They can no longer put their heads in the sand because it isn't a question of if, but of when and of how many small cells are coming. Reactionary policies and moratoriums almost always rushed and neither encourage thoughtful technological expansion nor protect the constituents.

Wireless carriers, tower companies, and industry associations need to provide better substantive guidance to their member constituents including model applications and construction/design criteria. They should truly encourage shared infrastructure use especially in dense areas where multiple providers want access to existing poles. These groups and companies should also be more forthright in their marketing materials and in answering legitimate questions and concerns by public entities.

We, as advisors to landowners and municipalities, will continue to help educate the public about the small cell leases and policies. Most landowners and municipalities are underrepresented and ill-informed when it comes to responding to the wireless industry's requests and/or demands. We hope that by highlighting the top 10 things the industry doesn't tell you about small cells, that you can better decide how to accomplish your goals. That small cell deployment will not be allowed to grow unchecked and unabated by an uninformed populace.

Busted! Mobilitie Tries to Install 120′ Poles without Proper Permits AGAIN!

April 2, 2017 by Ken Schmidt Leave a Comment

Cartoon image of individual with traffic cone. — Mobilitie Mistakenly Tries to Install Cell Towers Using Traffic Cone Regs

We have to start off by clarifying that this isn't an April's Fools joke- despite the timing and it feeling like one. On the eve of possible FCC review of their petition to the FCC for relief from small cell siting restrictions at the local level, Mobilitie is busted yet again trying to install 120' poles without following the proper local permitting and planning procedure. You can see the Post-Star story here. In the first situation, it appears Mobilitie told the fairground official for the fairground where the tower(s) were to be located that they were trying to drill "test holes" and that it was for "the utility company". Did their contractors just not know any better? Was Mobilitie just trying to get the structure standing before anyone would notice? Given this isn't the first time they appear to have tried to erect a pole without a permit, one has to wonder.

At a second location, the Post-Star reported that Mobilitie appears to have erroneously applied for a county highway work permit which is only applicable for temporary infringement of the county right of way. "Usually it's traffic cones for a driveway resurfacing, officials said." Mobilitie indicated in response to the article that it was following the correct procedures to get permission for the towers. One can see how this mistake may have been made- 2' temporary traffic cones are pretty similar to 120' steel poles with 3' wide bases. (Sorry for the snarkiness, the ridiculousness of this story assuming it is accurate calls for it.)