Wireless Lease Negotiations: Privileges, Not Rights

My law firm professionals and I have negotiated hundreds of leases, lease modifications, agreements, ordinances, etc. over the years.  We repeated hear the wireless carriers talk about the ‘rights’ they must have.

Nope.  That’s not how it works for the savvy landlord.

We advise clients (and just about anyone else who will listen) that the wireless carrier is negotiating for privileges, not rights.

For example,

  • The very valuable privilege to have a lease extend for 25 or more years;
  • The very valuable privilege to deny the landlord virtually any means to get out of the lease;
  • The very valuable privilege for the carrier to get out of the lease on 30 to 60 days’ notice;
  • The very valuable privilege to take hundreds or thousands of square feet of land for sucker rents of as little as 10¢ per square foot;
  • The very valuable privilege to suspend rent for some casualty, even when the casualty is the due to the carrier;
  • The very valuable privilege to impose great duties on the landlord compared with those imposed on themselves; and
  • Many other valuable privileges that solely benefit the wireless carrier, most commonly to the detriment of the landlord.

You get the idea…the boilerplate deals offered by carriers are hardly equal or fair to landlords.  That’s a great reason to use an attorney who knows where the obvious (and the hidden) landmines are to be found in the documents, but I digress.

With the privileges the carrier seeks come payments to the landlord.  The greater the bundle of privileges, the greater the payment to the landlord for granting those privileges.

Only when the lease is executed do the privileges convert to rights. Not one second sooner!

Landlords negotiating with the carrier’s agent (and all the better if the landlord has competent legal counsel helping…ahem…) should carefully listen for the words and phrases ‘rights’ or ‘we need’ or ‘we must have’ when uttered by the negotiator for the carrier.  Every time that those words and phrases rear their ugly heads…and that will happy often…remind the rep that they are negotiating for privileges, which only convert to rights when the deal is done, fully valued, and the paperwork is fully executed.

The skill and mindset of the landlord’s negotiator for a cell site lease most often makes a huge difference in the result and value produced for the landlord.

We know that. Now you do, too.

Jonathan

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Cell Co. to Potential Landlord: Use an Attorney and You’ll Regret It.

I’m simply amazed by many of the tactics used by wireless carrier agents (and therefore condoned by the carrier masters).

Most recently, carrier agents for several big wireless carriers have starting telling potential cell site landlords that if those potential landlords retain the services of outside counsel to help negotiate the lease, there will be financial consequences.  Sometimes the threat is the loss of a paltry signing bonus.  Sometimes its reduction in the proposed monthly rent.

What strikes me about such threats is how two-faced they are.  I know of exactly zero—zilch—nada— wireless firms that enter into lease without having their own attorneys review the documents first.

I tell clients that hear these threats that they should be even more cautious about entering into leases.  The stock leases promoted by wireless carriers are, not surprisingly, aimed at grabbing as much as they can from the landlord while paying as little as possible for those grabs.  Given that the leases usually run from 20 to 30 years* a landlord making a mistake or missing some well-hidden key point at the lease inception will haunt the landlord for decades.

Duck away from the sucker punch: If the carrier’s agent makes a veiled or direct threat in response to your decision to retain outside counsel, trust your gut.  Someone who doesn’t want you to use an attorney has a very good reason for that, and it’s not because they want to do you a favor.

Caveat Locatorem.

*One wireless tower firm now claims that their standard lease is 100 years in duration.  My response: If that’s that case, we’re going to put even greater limits on what they can do at the property.  Their response: Either silence or sucking sounds.
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Sean Scully Comes Back to the Government Side

Welcome back to the government side of the planning counter, Sean Scully, as the new Planning Manager at the City of Redondo Beach, California.

After some time away ‘on the other side’ (no, I won’t call it the dark side) working for the wireless industry, Sean returns to his roots working for local governments.  In the past Sean worked for the counties of Riverside, Santa Barbara and Monterey, as well as the cities of Carson, Menlo Park, and Lawndale.

Best of luck in your new position at the City of Redondo Beach.

-Jonathan

 

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AB 57 As It Will Be Presented to Gov. Brown

Here is the text of AB 57 headed to Gov. Brown.  I’ve added indentation formatting to make it easier to read:

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 65964.1 is added to the Government Code, to read:

65964.1.

(a) A collocation or siting application for a wireless telecommunications facility, as defined in Section 65850.6, shall be deemed approved if all of the following occur:

(1) The city or county fails to approve or disapprove the application within a reasonable period of time in accordance with the time periods and procedures established by applicable FCC decisions. The reasonable period of time may be tolled to accommodate timely requests for information required to complete the application or may be extended by mutual agreement between the applicant and the local government, consistent with applicable FCC decisions.

(2) The applicant has provided all public notices regarding the application that the applicant is required to provide under applicable laws consistent with the public notice requirements for the application.

(3)

(A) The applicant has provided notice to the city or county that the reasonable time period has lapsed and that the application is deemed approved pursuant to this section.

(B) Within 30 days of the notice provided pursuant to subparagraph (A), the city or county may seek judicial review of the operation of this section on the application.

(b) This section does not apply to eligible facilities requests.

(c) The Legislature finds and declares that a wireless telecommunications facility has a significant economic impact in California and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution, but is a matter of statewide concern.

(d) As used in this section, the following terms have the following meanings:

(1) “Applicable FCC decisions” means In re Petition for Declaratory Ruling, 24 FCC Rcd. 13994 (2009) and In the Matter of Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies, Report and Order, 29 FCC Rcd. 12865 (2014).

(2) “Eligible facilities request” has the same meaning as in Section 1455 of Title 47 of the United States Code.

(e) Except as provided in subdivision (a), nothing in this section limits or affects the authority of a city or county over decisions regarding the placement, construction, and modification of a wireless telecommunications facility.

(f) Due to the unique duties and infrastructure requirements for the swift and effective deployment of firefighters, this section does not apply to a collocation or siting application for a wireless telecommunications facility where the project is proposed for placement on fire department facilities.

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AB 57 Likely To Become Law, Then What?

Today, the California Assembly passed AB 57 as amended by the State Senate. This means that the Bill now moves on to Gov. Brown for his signature. It’s unlikely Gov. Brown will spend the political capital to veto the Bill, but there’s always hope.

Assuming AB 57 is enrolled, we’ll have to wait for the first test case where a wireless applicant claims that a local government busted the shot clock and asserts a deemed-approved by operation of law basis to build the site.

As for the fire fighters’ union that moved to support the bill as language was added to exclude the impact of AB 57 on fire stations, they’ve traded their political capital for nothing of any value. The language inserted in the bill at the last moment to gain the fire fighters’ support does exactly nothing to prevent cell sites or First Net towers from being installed on fire stations. Absolutely nothing. Imagine their reaction when they realize they’ve been played Assembly Member Quirk and the wireless industry. Sigh.

While AB 57 still doesn’t solve a problem that never existed, you’ve got to hand it to the industry for pushing this legislation through our legislature. Let’s keep an eye on the campaign donations.

Jonathan

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AB57 Muddled Even More: Fire Station Carve-out

Yesterday, August 18th, AB 57 was amended by the authors, Verizon and AT&T Assembly Member Bill Quirk adding two new sections, and modifying one existing section.

First, prior language in the Bill that connected it to the FCC Shot Clock Report and Order was monkeyed-with so that if the FCC changes it shot clock rules, those changes will have no impact on this legislation, and will not be automatically imported into the California law. Federalism is so fun when states can ignore it.

Next, for the second change, relying on make believe language, the author(s) added the following:

Due to the unique duties and infrastructure requirements for the swift and effective deployment of firefighters, this section does not apply to a collocation or siting application for a wireless telecommunications facility where the project is proposed for placement on fire department facilities.

While firefighters have unique duties and infrastructure requirements, does anyone really believe they extend to sleeping in firestations? Ahemmm. If I’m run a hospital or an emergency care facility, are those “unique duties and infrastructure requirements” more unique and critical compared with where firefighters sleep? How about skilled-care nursing facilities? What about public schools where young minds are developed?

In reality, the authors added this section simply to pander to firefighters who have strongly opposed the bill because of their well-known and stated fears of radio frequency transmissions from towers. This fear is an issue federally preempted in the Telecom Act.

Third, tossing a two-dimensional bone to city and county governments, the authors added this language:

Except as provided in subdivision (a), nothing in this section limits or affects the authority of a city or county over decisions regarding the placement, construction, and modification of a wireless telecommunications facility.

This language is simply fluff.

Worse yet, AB 57 (still) doesn’t solve a problem that doesn’t exist.

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Look out Dish, T-Mobile Might Have A Better Suitor

Word is that Comcast may make a run to marry T-Mobile, and beat out Dish to the alter.

It is nothing less than brilliant for Comcast AND T-Mobile.  Local governments will have a less favorable view.

Comcast finally gets the quad-play in house, and T-Mobile almost overnight solves its coverage problems in Comcast’s footprint.  Comcast will deploy PCS radios on its strand and in its pedestals, and use its network for backhaul.  It will integrate the shared CableWIFI platform to provide more T-Mobile connectivity outside of Comcast’s footprint.  Comcast will get a wireless video delivery platform.

…and Dish will be stuck with all that upload bandwidth that will decrease in value.

Local governments will find that applying their wireless ordinances to their all-time favorite cable TV franchisee will be, ah, challenging.

Now THIS is going to be fun.

jlk

PS: What should we call the two of them:  T-Cast?  Naw, Brian would never allow his name to be second.  Comobile?  Maybe.

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CTIA Sues City of Berkeley Over POS RF Warning Ordinance

In a move surprising no one who has studied history or the CTIA v. San Francisco case from July, 2010, CTIA, one of the two main wireless industry trade associations, has sued the City of Berkeley over its ordinance titled, “REQUIRING NOTICE CONCERNING RADIO FREQUENCY EXPOSURE OF CELL PHONES.”

The ordinance, codified at Chapter 9.96 of the City’s Municipal Code requires sellers and lessors of cell phones to provide the following point of sale notice:

The City of Berkeley requires that you be provided the following notice:

To assure safety, the Federal Government requires that cell phones meet
radio frequency (RF) exposure guidelines. If you carry or use your phone
in a pants or shirt pocket or tucked into a bra when the phone is ON and
connected to a wireless network, you may exceed the federal guidelines
for exposure to RF radiation. This potential risk is greater for children.

Refer to the instructions in your phone or user manual for information
about how to use your phone safely.

If you would like to read the CTIA v. Berkeley compliant, filed on June 8, 2015, CLICK HERE.  (PDF; about 1.5 Mb)

The complaint’s first paragraph sets the tone: “The City of Berkeley, California (“the City”) may be entitled to its opinions, however unfounded.” Enjoy the rest of the complaint, which is framed as a First Amendment ‘freedom not be forced to speak’ claim.

CTIA seeks the following:

WHEREFORE, Plaintiff prays that this Court:
(A) Enter a judgment declaring that Berkeley’s required disclosure regarding RF
Exposure, codified at Berkeley Municipal Code Chapter 9.96, impermissibly abridges CTIA’s
members’ First Amendment rights;
(B) Enter a judgment declaring that Berkeley’s required disclosure regarding RF
Exposure, codified at Berkeley Municipal Code Chapter 9.96, is preempted by federal law;
(C) Enter an injunction barring Defendants the City of Berkeley, California and Christine
Daniel, the City Manager of Berkeley, California, from enforcing or causing to be enforced Berkeley
Municipal Code Chapter 9.96 in order to prevent imminent and irreparable injury to CTIA’s members and harm to the public;
(D) Grant CTIA such relief as it deems just and proper, including an award of reasonable
attorneys’ fees and the costs of this action.

By the way, that last prayer for relief–for reasonable attorney’s fees–lead me to wonder what reasonable might be. It turns out that the CTIA’s lead attorney on the suit, Theodore B. Olson made some news in his own right about his own fees. It was highlighted in a National Law Journal article published on January 5, 2015 which said, in relevant part,

“Gibson, Dunn & Crutcher, with an $1,800 hourly rate for Theodore Olson, an outlier, had the highest rate the NLJ could find in public records.”

Read more HERE.

-Jonathan

PS: Interestingly, CTIA sued the City and the City Manager (in her official capacity) but they didn’t sue the members of the City Council (in any capacity) who actually voted for the ordinance.  Hummm.  jlk

PPS: I’d like to be able to charge $30 per minute for my own wise legal counsel.  Any takers? jlk

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