A tower is considered competing when it fulfils the same coverage or capacity goals or both as another nearby tower. Because coverage and capacity goals can vary widely depending upon the terrain, population density and distribution, time of day, difficulty of zoning, and proximity of other existing sites, there is no uniform distance where a tower would be considered as competing with another tower. We regularly assist our tower company clients with evaluating prospective acquisitions to determine how many competing towers are present across the portfolio of target towers. A tower is considered competing if it falls within the same search area or search ring as another tower. It’s not hard to see that the AMT and CCI towers in the photo above are competitive.

However, when looking at large numbers of towers, it isn’t feasible to look at each set of towers and we must make assumptions. As a rule of thumb, we tend to use the following distances for urban, suburban, and rural areas- ¼, ½, and 1 mile. In other words, if a tower is located within ¼ mile of another tower in an urban area, it could compete for the same prospective tenant. Of course, there are situations where that distance could be less or greater. For ease of analysis though, we utilize these distances.

For example, we previously completed an analysis of our proprietary tower data for a large hedge fund. Specifically, we examined each of the public tower companies’ tower datasets and compared to our own tower data. We looked separately at each large public tower company’s exposure to competitive towers in urban, suburban, and rural areas based upon multiple radii. We chose to use urban/suburban/rural designations instead of BTAs. While BTAs are used by the public tower companies as a proxy for urban/suburban/rural, we find that is misleading as BTAs can include urban and suburban and sometimes rural sub-areas in the same BTA.

We also examined each public tower company portfolio individually so that we could see which company was better positioned for rural expansion, urban infill and densification, and suburban expansion and densification. We also looked to see on average how many competing towers each tower company’s urban, suburban and rural towers had within a distance where a wireless carrier could choose one or the other tower.

We found that on average the public tower companies have .2 competing towers for each of their towers within ¼ mile, .4 competing towers within ½ mile, and just over 1 competing tower within 1 mile on a nationwide basis.

Please note that this doesn’t directly contradict Morgan Stanley’s findings as our methodology looks at average number of competing towers per tower while theirs appears to look at the number of towers with any competing towers within a given distance.

Interestingly, the public tower companies have different levels of exposure to competing towers depending upon whether their towers are in urban/suburban/rural areas with some tower companies having more exposure in rural areas and less in urban areas and vice versa. When you examine how each tower company acquired or built their towers, this stands to reason. SBA chose to acquire towers from other tower companies while Crown Castle and American Tower acquired large chunks of their portfolios from wireless carriers and tower companies.

The tower companies have differing exposure to competing towers depending upon where and how they acquired their towers.

Another point of interest is that there are more competing towers within the assumed “competitive” radii than there were 10 years ago across urban, suburban, and rural towers although this is more pronounced in urban areas as should be expected. We examined the number of competing towers in 2007, 2011, and 2017, and found that the number of competing towers had increased between 25% and 50% between 2007 and 2017. This despite more difficult zoning regulations in many areas that would prevent new towers near existing towers.

Our next near-term project will be using this previous analysis to evaluate how many new towers have been proposed or built near existing tower company towers to date- not just by Tillman but by other build-to-relocate (or BTR) developers as well. If you recall from previous articles, some wireless carriers have simply told any tower company that would listen where they would like to move off an existing tower, with the first tower company to have a tower standing being the one they would lease from.

If you are interested in discussing or purchasing any of our findings, please contact us.

We prepared this map that represents the states that have issued, awarded, or announced that they plan to issue an RFP.

To show the impact of 100,000 small cells being deployed in the US over the next few years, we looked at total population per state and created this map which assumes that small cell deployment will follow population.   In other words, a state’s relative population is used as a proxy for small cell need in this map.   In reality, there are many more factors which will influence the number of small cells in each state.

These include:

1. Population density
2. Difficulty of procuring permits for macrocells
3. Spectrum shortfalls in specific markets
4. Competitive Pressure between Carriers
5. Topography

Thus, this map is only intended as a rough estimate of small cells to be deployed by state.  Where it gets interesting is when you assume that the actual number of small cells could be 1,000,000.  Previous FCC Chair Tom Wheeler indicated in a 2016 speech that the number of small cells deployed “may reach into the millions”.   Multiply the numbers in the map by 10 to see what we mean.  The state of California alone could see 120,000 small cells with most in urban and suburban areas.  That is a lot of small cells.

A new competitive dynamic emerges in the fight for densification dominance

Tickers: ZAYO, CCI

(Disclosure- author holds positions in ZAYO)

The deployment of small cells started in earnest in 2015. Two years later, all of the Big 4 wireless carriers have adopted a small cell strategy to handle the 50+% YOY growth in mobile data usage. Along with acquiring or deploying fiber, the deployment of small cells sits at the heart of a hyperconnected 5G future.

As small cells have grown in prominence, analysts have argued about their impact on traditional tower company business models. Recently, Crown Castle (CCI) indicated small cells account for over 12% of total revenue and small cell deployment will only climb in the future—a trend we highlighted in our note Ten Predictions for 2017. Understanding how companies like CCI and Zayo deploy small cells, at what economics, and how the economics compare to historical returns on capital in the tower business is increasingly important.

Last week, we put out an article on how wireless service providers connect with their subscribers at the Superbowl. In doing research for this article, we looked at towers and small cell infrastructure using our proprietary tower and small cell database to examine deployments in and around NRG Stadium in Houston, TX. The wireless carriers have been actively densifying their networks in Houston to prepare for the onslaught of increased wireless data usage, and our data shows ZAYO and CCI competing for the city’s small cell future. While this note focuses on ZAYO and CCI in Houston, there are other players with a presence in this bellwether market. For the sake of simplicity, we’ve chosen to focus on what we see as the top two competitors going forward.

There are three key takeaways that emerged from our research:

1. At the end of the first quarter of small cell deployment, ZAYO is ahead of CCI in Houston.

Zayo is significantly ahead of Crown Castle in the deployment of small cells in Houston, where CCI’s headquarters is located and where CCI just closed on the acquisition of Fibernet earlier this month). CCI stated on their earnings call on 1/26/2017 that “FiberNet substantially strengthens our footprint in Miami and Houston, both markets where we are seeing significant small cell demand.” But despite CCI’s claims about their efforts in Houston, our checks indicate that Zayo small cell nodes (both proposed and completed) exceed CCI nodes by a factor of approximately 10x, giving ZAYO a significant advantage in the market. We have plotted these deployments in the map below, with ZAYO in green and CCI in yellow, and ZAYO’s advantage is clear.

Our research is specific to Houston and is not a commentary on the ZAYO vs. CCI competitive dynamic across the entire US. We see accelerated development of small cells in Houston because it is a top three city in terms of population and because of the publicity surrounding the Big Game.  However, from a zoning and permitting perspective, Houston is “infrastructure friendly” relative to other cities.  In other words, Houston is an ideal location for robust small cell deployment, so we will continue to watch developments in the marketplace as a bellwether for other major cities.

2. The Small Cell Game is fundamentally more competitive than the Macrocell game, and First-Mover-Advantage is critical.

Small cells are more competitive than traditional towerco business models, and so the first-mover advantage is more important. Because small cells are deployed primarily in the right of way, and with fewer zoning restrictions and limited NIMBYism to constrain competitive deployments, the first company to win the land grab has an advantage attracting carriers as customers. In some areas, we are hearing that there are six to seven applicants applying for right of way access rights simultaneously in the same locations.

Already having fiber in the ground is beneficial because it enables the lead infrastructure company to solicit potential wireless service providers first. If a second infrastructure company enters the market and builds out the same right-of-way, then a duopoly is created wherein neither gets all four customers onto nodes along the same fiber routes. The best case duopoly IRR scenario is three carriers on the lead and just one on the follower; however, our research suggests that so far Sprint is focused on deploying its own nodes; so markets tend toward two customers on the lead and one on the follower. In their 4th Q earnings call, CCI indicated that “we are building small cell systems with initial yields of 6% to 7% that increased to low-double digits with the second tenant and higher yields with the third and fourth tenants.” This statement presupposes a local monopoly for the leader, not a lower-yielding duopoly. And let’s not talk about what happens when there are more than two fiber providers in the same Right of Way.

Our proprietary data allows us to quantify the monopoly vs duopoly state of Houston and therefore to narrow in on CCI’s return on investment as small cells are added to FPL Fibernet’s assets.  If rumored carrier consolidation between Sprint and T-Mobile occurs, the first-mover advantage grows as fewer carriers mean that the second infrastructure deployed in any given city has a fundamentally lower potential return profile. Though the reverse is also true; entry by a cable company into the wireless space could expand the number of potential customers, enabling higher second-mover returns. Net net, with no guarantee of a local monopoly, the second infrastructure deployed is simply compressing the wireless value chain in the favor of carriers.

3. Even though CCI is down in the first quarter, they can still turn it around.

We are not suggesting that Fibernet was a bad acquisition, nor that ZAYO has the Houston market in the bag. When Crown announced the Fibernet acquisition, the expectation was that CCI would be able to use the valuable metro-fiber plant to encourage small cell deployment on or near that fiber. CCI has indicated they are seeing strong interest for small cells in Houston but hasn’t yet provided any clarity on what constitutes “strong” and whether what they are seeing is in-line with their expectations.

We believe that both companies have valuable assets in Houston, especially to the extent that their infrastructure does not overlap—a factor which our proprietary datasets allow us to quantify. However, it is still too early to determine the degree to which CCI will succeed with Fibernet’s Houston assets. The small cell game is still too early to call.

We will continue to closely monitor the situation in Houston and we will be expanding our research to additional top 25 markets in the coming months.

About Steel in the Air: We have long focused on a data-driven analysis of tower data and on lease rate data for wireless infrastructure. We were the first nationwide cell tower lease consultant and we are the largest, having assisted over 3,500 clients over the last 13 years. We count small to mid-size tower owners, public entities, not for profits, big box stores, shopping center REITs, federal entities, and individual landowners among our clients. We have unique visibility to what is happening on the ground as it pertains to wireless infrastructure deployment. We track everything- every lease, every tower, every cell site, every cell tower lease buyout offer, and every sale of a tower portfolio that comes across our virtual desk. We provide custom research for investment banks on the public tower companies and the small cell providers and developers. If you are interested in discussing this or any article or topic, we can be retained for in-depth discussion and analysis. Contact us for more details.

We recently came across some data from Montgomery County, MD.   If you have followed wireless siting news, there have been a number of stories about Montgomery County and the opposition for small cells from NIMFYs.

Interestingly, the data shows a similar story happening in Montgomery County as that which happened in the City of Orlando.  Of the 171 small cell or DAS installations submitted by Crown Castle, 81 have been approved or recommended for approval.   90 are under review currently.   Of these 171 poles proposed by Crown, only 20 are new poles as opposed to installations on existing utility structures.   The average height of all Crown poles/antennas is 28 feet.   Another interesting statistic regarding the Crown DAS poles is that 26 of them have two carriers coming out of the ground.   Almost all include Verizon- but some include T-Mobile.

Mobilitie has taken a different tact and not surprisingly, NONE of the 141 small cells that Mobilitie has applied for have been recommended for approval as of the date of the file we reviewed which appears to be October of last year.   The average height of the Mobilitie poles- 66 feet.   The number of new poles vs attachments to existing poles is 117 to 24 respectively.

Lastly, Verizon has submitted 15 small cell applications of their own.

Below is a map we created in Google Maps showing the various DAS and small cell providers and the submitted infrastructure.   You can click on the individual points for further details on who is where and whether the sites have been approved.  (here is a link to the map itself in Google Maps)

Since competition for subscribers remains at the forefront of Big 3 marketing strategies, and “anytime, anywhere” fast and reliable coverage is a benefit to many people, the major carriers publish network coverage maps on their websites, in an effort to persuade customers to churn their way. In the last two years, it’s become a matter of growing concern for some politicians who have taken the issue of accurate network coverage on as a rallying cry. Sen. Charles Schumer, D-NY, asked the FCC to investigate whether network providers are fairly and accurately advertising wireless coverage in their online coverage map tools.

CALL FOR BETTER COVERAGE MAPS

The FCC has been calling for better coverage maps (at the bequest of Congress) and has initiated a surprisingly aggressive attack on carrier coverage maps.  However, the carriers are fighting back, saying that having to produce reliable coverage maps would be overly expensive due to the cost of drive testing.  They allege that it would cost tens of millions per year to test just part of their coverage maps.  (Ignoring the obvious possibilities that there are companies that already do nationwide drive testing who could drive the entire country for all wireless carriers simultaneously- thereby reducing the cost per carrier).

According to a study conducted by RootMetrics, Hudson Valley, NY ranks 125^th out of 125 metropolitan areas for good coverage and capacity on the BIG 4 wireless networks. Now, it is important to acknowledge that many factors are contributing to strong wireless coverage and network capacity in a metropolitan area, some of which are completely outside of the WSP’s purview. For example, one factor is the willingness of local municipalities to allow wireless infrastructure, such as new tower builds. Under the Telecommunications Act of 1996, local municipalities could no longer prohibit the provision of wireless service. However, they sure can make it difficult.   And in Hudson Valley, NY, zoning regulations do exactly that. Thus, it may not be AT&T, Sprint, T-Mobile or Verizon’s fault that coverage is poor in the Hudson Valley area.   It isn’t for a lack of trying, as they get turned down in zoning hearings for new towers and wireless infrastructure on a regular basis. However, that doesn’t excuse them from inaccurately depicting strong coverage on their website coverage maps for that area.

Here at Steel in the Air, Inc., we review coverage maps for each of the wireless carriers on a daily basis, while acting as a cell tower lease expert that advises landowners of the fair-market value of leases. Part of our assessments involve a location metric, which enables us to determine the relative value of a particular location for each of the Big Three carriers, in consideration of their current operational infrastructure. Each year, my staff and I review thousands of locations and visit each wireless provider’s coverage map website for each newly proposed cell site location. Coverage maps are generated by either the marketing department or the radio frequency department, and are intended to fulfill specific purposes.   In my opinion, both AT&T and Verizon have antiquated website coverage mapping tools that simply show equal coverage across large areas. While both AT&T and Verizon do have better coverage empirically (RootMetrics ranks them #1 and #2 across the United States), their coverage maps are simple marketing tools intended to convince viewers that coverage and capacity exists ubiquitously across a large area.   T-Mobile recently (Aug-2020) reduced the quality of their coverage map in our opinion. Sprint (now part of T-Mobile) previously had more realistic coverage maps that show actual gradients in quality of coverage and more closely represent realistic conditions.

To illustrate, please see the image pair below. On the left is an image of Verizon’s coverage map depicting coverage strength in a given area. On the right is a coverage map that Verizon’s radio frequency department generated to support their efforts to get a new tower approved at the circled in the middle of the map.   In order to get zoning approval to build a new tower, Verizon must demonstrate that its coverage is currently sub-par at that location.   The blue areas represent strong coverage while the yellow areas represent weak to none.   Again, the red map is what Verizon has published on its website illustrating the exact same area; and here it shows red (strong coverage) across the entire area. Is Verizon’s online coverage map wrong or is the map to the right understated simply to fool the zoning board into agreeing to a new tower build? In reality, both are correct.   Verizon, just like other wireless carriers shows coverage on their website to market how strong it is but understates it when required to prove the need for a new tower.  In other words, Verizon (and other wireless carriers) can generate coverage maps to show whatever they want to show.

We previously gave T-Mobile credit for attempting to provide more actionable information with their coverage maps.   In early 2015, T-Mobile’s coverage map was updated. The result was similar to AT&T and Verizon’s coverage map tools whereby most areas of the country were shown with excellent coverage.   However, at some point in November of 2015, T-Mobile revised what their coverage maps showed to present more realistic results. To the right is a pair of images that illustrate coverage over the same area as shown on T-Mobile’s website on two different dates. The first, taken from June 18^th of 2015, shows nearly complete strong coverage over the entire area.   The second taken from November 15^th of 2015 shows a different picture with pockets of strong coverage and some areas of weaker coverage. The latter map is much more representative of what T-Mobile’s coverage actually is, not what the marketing department wants to show it as.   It appears that T-Mobile rightfully determined that they were overstating actual coverage and revised their map to more accurately show real coverage.

However, in August 2020, T-Mobile revised its coverage map yet again. The map now shows 5G availability but without any indication of the type of 5G that is is available or the quality/speed of that 5G.  T-Mobile is now running 5G on three sets of spectrum: mmWave (fastest), 2.5GHz from Sprint (fast), and 600MHz (slower).

Although the maps now shown 5G availability, their 4G (dark maroon) maps may have been deprecated as the maps appear to show more universally available coverage in the same areas as before.  This could be because they now have the Sprint sites and spectrum, but I tend to doubt it as it is unlikely that these areas have had Sprint sites  converted to T-Mobile equipment yet.  We suspect that T-Mobile made the decision to follow AT&T and Verizon’s lead and just show solid 4G coverage everywhere.   Below is a August 24, 2020 coverage map showing the same area as in the T-Mobile coverage areas above.  T-Mobile no longer shows “Excellent, Good or Average” coverage levels on their 4G map.

Coverage Map Accuracy

So you might ask “how would you rate the accuracy of the coverage maps by the Big 3 wireless carriers in terms of accuracy of actual coverage?” Here are our independent ratings of the quality of the coverage maps.   It might be helpful to the reader to know that we maintain one of the best, if not the best, database of cell tower location data and lease rate data in the country.   When we review the coverage maps, we also have the benefit of knowing where the towers are in the same area and, in many cases, which wireless carriers are located on which towers. We also know when there are no towers in an area where the wireless carrier may be stating (or exaggerating) that they have coverage.   Below are our coverage map ratings based upon accuracy (the probability that the stated coverage accurately shows the actual coverage); ease of use (how easy is it to find the coverage map and use it); underlying map detail (how complete is the underlying road and map features; Ability to Select Device (does the website allow you to choose the device to see whether it has better/worse coverage); and Verified Coverage (does the map show you actual use that has been submitted by the phones using the network.)

it is important to note that good coverage doesn’t always mean good performance, nor does it mean a fast data connection. Furthermore, the maps typically show what coverage is like outdoors, not indoors. Thus, even with accurate maps, your cellular and data performance may suffer when you go indoors.   Lastly, in terms of total actual coverage across the US, Verizon and AT&T simply have more complete and extensive coverage although T-Mobile is quickly catching up with their 600MHz expansion over the last 2 years.   So if you travel a significant amount, especially in smaller towns or rural areas, go with Verizon for reliable coverage.   However, if you pretty much work in one place and live in another, the accuracy of site-specific coverage maps is more important.

It is also important that while the maps may show strong vs. weak coverage, none of the maps show the amount of capacity that the network has at a given location.   Accordingly, while there may be excellent coverage at a location, if there are too many people using the network simultaneously (think AT&T’s network in NYC after the first iPhone came out) the data speeds will drop and connectivity will become more problematic. In other words, at this point in time, none of the maps accurately show network capacity, although areas with 5G coverage will be more likely to handle greater capacity.  However, that doesn’t necessarily mean faster speeds.   (See this comparison by Open Signal– T-Mobile easily has the widest 5G coverage area- but Verizon’s average speed across their network is still higher even with the lowest 5G availability.)

So what can the average wireless consumer take from this?

1. Wireless carrier coverage maps should only be used as a starting place. Do not decide which carrier to subscribe to based solely on coverage maps.
2. Test your phone in your office and home before committing to a long-term agreement. Each of the WSPs allows a specific amount of time to return the phone after the date of purchase and cancel the service (usually 30 days). Ask your carrier about this prior to committing.
3. Consumer Reports, RootMetrics, and PC Magazine have conducted independent studies on each of the Big 4 using empirical data to determine the quality and speed of service. Ranked results often show carrier performance by city and/ or geographical location.
4. There are multiple sources that purport to provide crowd-gathered wireless coverage maps. These include www.opensignal.com and www.sensorly.com.   While these maps can be helpful in confirming strong coverage, the lack of strong coverage could simply mean that the website didn’t receive adequate data to determine strong coverage.   Thus, false negatives may apply.
5. Do not rely upon 5G coverage maps as an indication of how fast your 5G service will be at a specific location.  Other than Verizon’s 5G maps (which are hard to find and access) which show only mmWave 5G (the fastest type), the other carriers are blending 5G on their maps to include all types of 5G including low band (slowest 5G), mid-band (moderate 5G), and mmWave (fastest 5G).

Feel free to let us know if you have any comments or comments!

In our review we noted three interesting observations:  Firstly, Verizon simply outpaces all other wireless carriers and tower companies combined.  They are the only wireless service provider who appears to be actively contacting landowners and building owners regarding small cells. No other wireless service provider or tower company has approached any of our landowners/ clients about proposed small cell deployment.  Secondly, while reviewing our data, we noticed that while both SBA and CCI are active in terms of new cell tower lease proposals, not a single landowner has approached us to help them with a new American Tower (AMT) lease.  This suggests that American Tower is not very active this year in terms of new site development – at least not in the United States, which is fairly surprising.   Third, we noticed is that small to mid-size private tower companies are making up a larger percentage of our leads for proposed leases.   We anticipate this is because of expectations of pending search rings from AT&T, T-Mobile, and possibly from Sprint.

Going forward, we along with a number of industry pundits and analysts expect a more robust 2^nd half of the year for all wireless carriers.   For Verizon, it will be more of the same- they tend to be the steadiest of all the wireless service providers year after year in terms of new sites.  For AT&T, we anticipate a slow ramp up of additional cell towers through the end of 2015, increasing in early 2016.   Primarily, we anticipate that the stoppage of work from AT&T that occurred in May of 2014 and continued through now is building a pending number of new sites that are sorely needed to help AT&T keep pace with Verizon’s ongoing and aggressive deployment of new cell towers and cell sites.  For Sprint, rumor has it that they have a pending build plan of up to 20,000 new towers depending upon the source that you read.  At Steel in the Air, we anticipate a slightly less robust build plan consisting of around 4,500-5,000 new cell sites and 4,000 small cells being deployed over the next year and a half.   Whether this starts in 2H 2015 or 1H 2016 is anybody’s guess.   Lastly, for T-Mobile, the forecast for 2015 and 2016 is pretty hazy.   We anticipate slightly more robust new cell site deployment throughout the second half of 2015, but anything would be considered robust for T-Mobile who has done little new site deployment for a few years while they absorbed MetroPCS and focused on site modifications.   We have heard that T-Mobile may be inclined to invest more money in new sites than planned after they observed the expensive pricing for the last AWS-3 spectrum auction.  (You can expand the capacity of your network by buying spectrum or building more sites- or both: we think T-Mobile thinks that it is now cheaper to build than to buy).

As you can see, we at SITA anticipate additional capex spending for the US Wireless Carriers through the end of 2015.   By the end of the first half 2016, we would be surprised if all four wireless service providers were actively building new cell sites for the first time in over 5 years.

If you are a market analyst and want to talk to us further about our insight about wireless capex spending in the US based upon our unique vantage point of having direct visibility to actual build plans when they start across the US, contact us.

Lease rates range from $500 to $7,000 per month, depending on the number of tenants that share the site among other things. COAs are suitable locations for cellular equipment for a number of reasons.  In some cases, they are the only tall structures within a given area (e.g. along one of Florida’s 1,350 miles of coastline).  Because COAs are built to accommodate a specific population of homeowners, reliable cellular coverage is important not only for the condo owners themselves, but also for the wireless service providers who are in neck-to-neck competition to provide optimal data plans to subscribers. Cell site coverage on COA buildings is highly desirable to wireless carriers; however, gaining approval to build a new cell site and enter into a lease agreement isn’t always the easiest task for site acquisition agents to accomplish.  COAs, by their very nature, are made up of multiple owners who may not always see eye to eye – especially regarding cell site development, installation and lease agreements. Similar to municipal cell tower proposals that require committee approval, board meetings are called, during which the pros and cons are discussed and debated – occasionally even leading to contentious arguments between owners regarding potential safety hazards.  Often, COAs are unable to agree to even look at the potential benefits to their community, such as the passive income stream of regular rental payments and/ or the potentially profitable future buyout of the lease. Additionally, in Florida specifically, many condo owners use their units as seasonal homes, which makes meeting for board proposals difficult.

Cell Site Leases: Understanding the Process In the case where a COA is open to considering a potential cell site lease, we do advise paying careful attention to the approval process.  The wireless service provider (the “Lessee”) will require documentation from the COA (the “Lessor”) assuring that the members are on board and approval has been granted before proceeding to discuss specific terms.  Since the lease would be regarding a common area, COA bylaws often require that the membership, as a whole, must vote on the issue.   In fact, In some states, membership approval (e.g. a vote) is required by law. Once approval has been granted and the COA is ready to begin negotiations, we recommend careful consideration of the following aspects regarding new cellular leases:

Financial Terms.  This short list outlines issues that will affect the monthly rental amount that wireless carriers offer.  The uniqueness of the location and how well it serves subscribers while augmenting the carriers’ network capacity goals is perhaps the number one factor in determining lease rates.  In other words, how valuable is this particular location to the carrier?  This is something that the carriers know, yet the COA does not.  Steel in the Air can help determine the sweet spot (the amount the carrier is willing to pay to rent on your property) by querying our cellular asset database; however, there are some standards that are more or less givens across the board.  For instance, leases in urban areas typically command higher lease rates (but not always).  Additionally, local zoning regulations will factor in, since some municipalities allow building owners (including COAs) “monopoly-like” rights over wireless tenants, while others do not.

Longevity.  A standard cell site lease lasts for 25 years. Wireless carriers will hold the right to terminate the lease, but COAs should expect to remain locked into it throughout the duration.  As such, your COA should evaluate whether or not there are any pending plans for renovation that might affect the installation.

Maintenance.  Cell sites on rooftops are typically installed on space that is otherwise un-used.  Even so, like everything, the installation will require periodic maintenance, and it should be clearly written into the contract that this is the Lessee’s responsibility. For instance, we advise our clients to request that the wireless carrier use “non-penetrating mounts” to every extent possible during installation. Furthermore, the wireless service provider should be required to fix any problems (like water leakage) that might occur as a result of the installation.

Modifications.  Wireless service providers need some flexibility to make modifications to their systems over time.  However, COAs should not have to sacrifice control over the aesthetics nor the tranquility of their community, therefore there should be reasonable restrictions places on the ability of wireless carriers to add antennas or additional equipment to their site.  In some cases, they should only be allowed to do so by paying a fee.

Structural Capability. The equipment that the wireless service provider installs on the roof can weigh in excess of a ton.  Thus, it is paramount to the safety and maintenance of the building that the wireless service provider provides documentation signed/ stamped by an engineer attesting to the fact that the building’s rooftop will support any equipment.

Access. Wireless service providers typically want 24/7 access written into the contract.  This can present security and noise issues.  The best way to address this is by restricting normal maintenance to business hours and to require written notice in advance; however, you can also allow emergency access on a 24/7 basis, subject to specified terms.

Taxation. While entering into a lease will not require a change in not- for-profit status, income from cellular leases is typically classified as “unrelated business income” and as such can be taxable.  Said income can, however, be written off against expenses or business related loss.  COAs should consult with their CPA or tax attorney prior to entering into a lease to determine specific tax consequences.

Subleasing. Subleasing to another wireless provider (aka collocation) is never appropriate in a rooftop lease.  Thus, it should always be removed.

Nationwide Data Usage and How it Will Affect Cell Site Lessors Going Forward According to CTIA (a wireless infrastructure association), as of March 2014, smartphone use surpassed TV use for the first time ever at 151 minutes per day (vs TV at 147 minutes per day). Internet data usage rose 120% from 2012 to 2013 and is expected to climb even more for the foreseeable future.  More cell site build outs (on towers and rooftops) are necessary to meet rising consumer demand for data, and becoming party to a cellular lease can be a rewarding endeavor.  After all, it’s difficult to argue with a passive and regular income stream!  We can say, for instance, that our clients who are COAs (and their members) are happy to receive these “bonus” checks in the mail.  Some even say paybacks from cellular leases are able to reduce (or cancel) Association fees. Steel in the Air has been assisting property owners in negotiations against wireless carriers for over a decade now. We are well-respected in the industry for our no-nonsense, ethical and informative consults.  If you are currently party to a cellular lease or are considering negotiating one with a carrier who has approached you, do contact us.  We are happy to review your case in detail. We can help explain the pros and potential cons regarding entering into a long-term agreement and can answer any questions any of your members might have.

[1] According to the Florida Department of Business and Professional Regulation

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 existence 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.