Lease Optimization – that old familiar story

Posted on by Dr. Jonathan L. Kramer

Increasingly, wireless telecommunications landlords are being approached by firms representing their wireless carrier tenants for the purpose of securing a reduction in the rent and/or rent escalator the carrier pays to the landlord. Sometimes the demand is for a ‘rent vacation’ for up to several years.

Generally, the process described above is called, “Lease Optimization.”

Two well-known firms that perform Lease Optimization on behalf of the wireless carriers are Blackdot Wireless, and MD7.

In fact, Blackdot states on its website that it “pioneered the first expense reduction” program, also known as lease optimization. Lease optimization may seem innocent enough. After all, Blackdot is “substantially reducing carrier and tower company operating cost, while securing billions of dollars in rent guarantees for landlords.”

Securing billions of dollars in rent guarantees for landlords?

Lease optimization though results in substantially under market rents for unsuspecting landlords.

The approach is generally the same, as a landlord, you may be told that the wireless carrier is reducing the number of sites it operates and it has been determined that your site is one of those sites the carrier can live without.

That is, unless the landlord is willing to substantially reduce the monthly rent, and skip rent increases for some number of years, or even waive rent payments altogether for a period of years.

What’s in it for the landlord? Not much in reality. The usual ‘carrot’ is that if the landlord complies with the tenant’s demands, he or she will receive a ‘rent guarantee’ that will run for a few years. This is interesting, since the lease is the best indication of the rent that the landlord is supposed to receive.

I can see that a landlord is generally unwilling to lose all the rental income from the site and buys into the lease optimization story – at least there’s still some income, right?!?

If you are approached by a company interested in ‘optimizing’ your lease (and you), be suspect. Discuss the proposed terms with an attorney who is knowledgeable in the area to determine what the best step is forward for your situation. If you need a referral to a knowledgeable attorney to advise you, why not contact us.

In the end, don’t be afraid to trust your instinct: It’s usually the case that if a proposal doesn’t feel right to you, then it’s not right for you.

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FCC Likely to Revisit RF Emissions Safety Rules

Posted on by Dr. Jonathan L. Kramer

Wireless Week is reporting that the FCC may open an inquiry into its RF emissions safety standards.

WW reports that Chairman Julius Genachowski is circulating a draft inquiry among the Commissioners that may (and is likely to be) voted on by the full Commission to require a in-depth review of the FCC’s existing environmental RF rules. Those rules are found at 47 C.F.R. § 1.1307 et seq., and discussed in terms approaching plain English in the Commission’s widely-used publication, “Local Government Official’s Guide to Transmitting Antenna RF Emission Safety: Rules, Procedures, and Practical Guidance” (which I co-authored and co-edited).

If the Commission takes over the reins on this hot potato subject, it’s my opinion that the Commission is very unlikely to change the existing rules regarding cell towers, but it make take a closer look at the rules regarding Specific Absorption Rate (“SAR”) which govern cell phone handsets.

Should the Commission proceed forward, I would expect the review process to take upwards of a year to complete.  During this period, it’s very likely that segments of the public will call on local governments to halt cell siting reviews and permitting pending the outcome of the FCC’s review.  The simple answer is that unless the FCC directs state and local governments to halt siting reviews (somewhere around a 0.00000% chance, in my view), the usual local processing of wireless site permits should continue unchanged.

Remember that under Section 704 of the Telecom Act, local governments are permitted to determine planned compliance with the existing FCC rules.  Section 6409(a) of the Middle Class Tax Relief Act would suggest that the authority in Section 704 is only applicable to emissions safety reviews of new wireless sites, and perhaps not applicable to “collocations” at “eligible facilities” (whatever those terms mean as they are not defined by Congress).

Finally, I expect that if the Commission moves forward with a review of RF emissions safety, it’s quite likely that the wireless industry—freshly emboldened by its facial win with Section 6409(a)—will use the inquiry as a means to promote their notion that no RF safety reviews should be conducted or considered by state and local governments.

Stay tuned…this may well get interesting.

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Sprint Moves to Meter Data Services

Posted on by Dr. Jonathan L. Kramer

It looks like Sprint is moving to charging for data by the MB.

The first step Sprint has taken is to kill its unlimited mobile hotspot and tethering plans. Now, unlimited for Sprint’s formerly unlimited users, this means up to 5GB per month.  Then Sprint ‘drops the flag’ and start the meter running at 5 cents per MB after the first 5GB.

On Sprint’s web site (on June 9, 2012) , this is how they qualify their basic “Truly Unlimited Data”:

“Voice/Data Usage Limitation: Sprint reserves the right, without notice, to deny, terminate, modify, disconnect or suspend service if off-network roaming usage in a month exceeds (1) voice: 800 minutes or a majority of minutes; or (2) data: 300MB or a majority of KB. Prohibited network use rules apply. As advertised and notwithstanding those restrictions, engaging in such uses will not result in throttling (limiting data throughput speeds) for customers on unlimited-data-included plans for phones, but could result in other adverse action.”

Gads! “…could result in other adverse action.” Huh?

Anyway, it seems clear that the days of Sprint’s truly unlimited data services are, well, limited.

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Why I Really Like Building Security Cameras

Posted on by Dr. Jonathan L. Kramer

It’s not every day that I get to spend about 45 minutes with an LAPD investigating officer in the conference room of my office.  But then again it’s not every day that a man brazenly lies to my staff to gain access to my office to case ‘da joint for a subsequent break-in.  Here’s the story…

This morning, a middle-aged man walked into the reception area of my office.  He was wearing a brown uniform (think UPS brown) and a matching cap.  The uniform shirt bore a “CAT” (as in the heavy equipment manufacturer) logo and the name of a business.

He was holding a clipboard full of papers.

My receptionist greeted him and asked who he was here to see.  He said he was sent from the building office and sent to check our lights.

Our building office is good about building upkeep, and our fluorescent lights do dim, so having someone come up to the suite to check things is not unheard of.  Yet the building is pretty good about letting us know about inspections before they occur, so this was unusual.

The gentleman (and I use that term somewhat loosely) walked past my receptionist into the main part of the office…our cubical city…and then he walked into my office.

It’s very unusual for someone…especially a stranger…to walk into my office within the suite without being announced in advance and escorted back, so my feathers came up.

I stood up and came around my desk to greet the man.

I asked what he was here for, and he mumbled something about the lights.   The uniform certainly didn’t suggest he was from a lighting company, so I asked him for his work order.  He mumbled something about his boss sending him, and that the boss was on the building roof.  Because of where my office is located on the third floor of this office building, I usually hear workers accessing the roof just above.

I hadn’t heard anything today. My back feathers were starting to stand on edge.

I asked the man for ID, but he said he had none.

“Step out of my office NOW.”  He backed up.

Using the not-inconsiderable bulk of my body, I corralled him back and back and back into the front reception area.  Then I turned to a staff member and told her to immediately call the building office to determine whether this person was, as claimed, sent by the building management.

The man turned and started moving towards the front door of the office suite.  I trailed, yelling to staff to make the call to the building office NOW.

He opened the front door of the suite.  By the time his body was through that portal, he was at a full trot.  By the time he turned the corner to the stairwell (apparently not wanting to wait for the elevator!) he was in a full gallop.

What he didn’t expect to find were that the stairs down to the ground level are blocked off on my floor by a construction barrier.  This is due to construction work on the second floor landing.   Not deterred, and not wanting to stick around to have a thoughtful discussion regarding his predicament, he chose to hop the construction barrier at the third floor stairs.

My visitor was in for a really big surprise.

Upon reaching the second floor landing, he found himself blocked from proceeding in any direction except back up into my, ah, waiting arms.  Considering his lack of options, he decided to jumped over the railing and fall about 15 feet to the first floor below.  He fell feet first.

How do I know his flight by air, since I didn’t see it? (I did hear some very interesting crunching and banging sounds, though.)

Our building has an extensive system of security cameras on each floor, and at each building entrance.  One of the cameras captured him entering the frame from above, feet first, and landing none-to-gracefully on the cement of the first floor.  A moment after his stunning landing, he recovered his wits sufficiently to get up and run/limp away to the waiting getaway vehicle, an SUV.

After the Burglar (let’s call him by his proper title) fled, I immediately went to the building office.  They were already alerted to what was up by my office’s call, and another tenant in the building.  It was a pleasure to see his face so clearly on the security camera recordings.  I would learn that other building security cameras followed him from the moment he entered the building to the time he flew the coop.  He’s the star of his own reality video, now!

The building manager called the LAPD, and now you know why I sent 45 minutes with an LAPD investigating officer today.

Once cleared by the LAPD, I’ll see about posting the video of this ne’er-do-well falling 15 feet, feet first, on to his posterior.  It’s quite the sight to behold.

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Sprint(ing) Forward to 800 MHz LTE

Posted on by Dr. Jonathan L. Kramer

The FCC has granted Sprint’s request to allow it to deploy LTE services in its 800 MHz band assignments.

This is a big deal, both for Sprint and for LTE deployment as the de facto 4G-ish standard.

The FCC’s decision (found HERE) allows Sprint to re-purpose its Nextel 800 MHz spectrum (the old iDEN band) and bond it with Sprint’s 1900 MHz spectrum to create a ‘super LTE’ channel (my term, not theirs).  Mathematically, this is represented by the complex formula:

zoom(800,000,000hz) x zoom(1,900,000,000hz) = ZOOM(WOW)MBs

Okay, maybe that’s not a legit math formula, but you get the idea.  Bonding two high speed data bands is better than having two stand-alone high speed data bands.

This is a huge deal for Sprint as it continues to decommission its old Nextel iDEN services and sites as it deploys its Network Vision project.  Network Vision is Sprint’s ‘one-box-does-all’ base station solution that allows it to communicate on multiple bands and using multiple signal protocols for both itself, and for electronic collocators it will charge to deploy on its upgrade cell sites.

For the LTE community, the Commission’s decision signals its intent to relax the existing technical rules that current prevent deployment of 4G-ish services in the cellular and ESMR bands.  AT&T and Verizon will likely be even happier than Sprint by the ruling as it will give those firms a legal path forward to phase ultimately out cellular on 860 MHz and bond LTE with their other band assignments, especially 700 MHz.

(Bonding 700 MHz and 800 MHz services makes a lot of technical sense as the signal propagation of those two bands is similar, where the propagation of bonding 800 MHz to 1,900 MHz are dissimilar.)

For LTE-supporters, the Commission’s ruling is a much clearer path forward for dominance of that communications scheme given that the Commission’s door-opening will make LTE and LTE band-bonding even more important.

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Reminder: “Cell Tower Deaths” Premiers on PBS Frontline Today

Posted on by Dr. Jonathan L. Kramer

As a reminder, PBS Frontline in conjunction with ProPublica will present “Cell Tower Deaths” premiering TODAY/TONIGHT on PBS stations. The PBS Frontline page is here: (CLICK HERE).

No, this story is NOT about radio frequency emissions concerns. Rather, it focuses on the risk of building and servicing cell towers.

According to PBS:

The smartphone revolution comes with a hidden cost. A joint investigation by FRONTLINE and ProPublica explores the hazardous work of independent contractors who are building and servicing America’s expanding cellular infrastructure. While some tower climbers say they are under pressure to cut corners, layers of subcontracting make it difficult for safety inspectors to determine fault when a tower worker is killed or injured.

Why are tower workers 10-times more likely to die than construction workers (as claimed by PBS)?

You’ll see one reason in my February 2012 post titled, “Is Tower Building a Dirty Job?”

Take a look at the clip. About 36 second in to the Dirty Jobs clip you’ll see the owner of a tower construction company attach his safety belt hook to a tower section not yet bolted to the rest of the tower.

In my opinion, what you see at that moment is an amazing deadly lack of judgment, especially for the owner of a tower construction company. Even if he’s double tied-off to the tower, were the free-floating tower section were to fly off or drop, he would be split in two (metaphorically, if not in reality). I wonder if his poor judgment is a model for his employees? I certainly hope not. I’ll bet his Workers Comp insurance carrier hopes not, as well.

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LightSquared files for Bankrupcy (Chapter 11)

Posted on by Dr. Jonathan L. Kramer

     To the surprise of very few, LightSquared has filed for Bankruptcy protection under Chapter 11.

Given that the firm has virtually no path forward to use its frequencies to provide 4G-type services in light (no pun intended) of the apparently unresolvable GPS interference issues, Chapter 11 gives LightSquared a way to step back and see what it can salvage of their operations.

In a Chapter 11 bankruptcy proceeding, in most cases, the debtor remains in control of its business and operations as a “debtor in possession.” The day-to-day operations are subject to the oversight and jurisdiction of the federal court (and typically the trustee). The goals of a Chapter 11 proceeding is for the company to find the cash to emerge from bankruptcy having paid its creditors some portion of the amount due, cancelling or renegotiating some contracts, and then resuming normal operations after completing the bankruptcy.

It seems pretty clear to me that the $9B contract LightSquared entered into with Sprint will be a target for cancellation.  That will place even more pressure on Sprint to fund its Network Vision project.

A Chapter 11 bankruptcy proceeding is is very different from Chapter 7 proceeding.

In a Chapter 7 bankruptcy action the business ceases its regular operations.  The court-appointed trustee sells off all of the business’s assets and distributes the sale proceeds to the creditors. If there’s any money leftover after all the creditors are paid, that balance is returned to the owners/shareholders of the bankrupt company, and the company ceases to exist.

Sometimes a firm starting out on a Chapter 11 bankruptcy path can still end up shutting down.  It would not surprise me if that’s the case with LightSquared, especially if they are forced to sell off their licensed frequencies.

Time will tell.

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Cell Tower Deaths on PBS Frontline 5/22/12

Posted on by Dr. Jonathan L. Kramer

PBS Frontline in conjunction with ProPublica will present “Cell Tower Deaths” premiering on May 22, 2012 on PBS stations. No, this story is NOT about radio frequency emissions concerns. Rather, it focuses on the risk of building and servicing cell towers. Those risks are significant.

According to PBS:

The smartphone revolution comes with a hidden cost. A joint investigation by FRONTLINE and ProPublica explores the hazardous work of independent contractors who are building and servicing America’s expanding cellular infrastructure. While some tower climbers say they are under pressure to cut corners, layers of subcontracting make it difficult for safety inspectors to determine fault when a tower worker is killed or injured.

Why are tower workers 10-times more likely to die than regular construction workers (as claimed by PBS)?

You’ll see one reason in my February 2012 post titled, “Is Tower Building a Dirty Job?”

Take a look at the clip. About 36 second in to the Dirty Jobs clip you’ll see the owner of a tower construction company attach his safety belt hook to a tower section not yet bolted to the rest of the tower.

In my opinion, what you see at that moment is an amazing deadly lack of judgment, especially for the owner of a tower construction company. Even if he’s double tied-off to the tower, were the free-floating tower section were to fly off or drop, he would be split in two (metaphorically, if not in reality). I wonder if his poor judgment is a model for his employees? I certainly hope not. I’ll bet his Workers Comp insurance carrier hopes not, as well.

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If the Tower Doesn’t Grow, Can Municipalities Say No?

Posted on by Dr. Jonathan L. Kramer

John Pestle of Varnum and I have been invited to speak on  this month’s T-Mobile’s National External Affairs Headliner Speaker Series.  This is a monthly conference call/webinar with hundreds of internal and external T-Mobile executives, managers, line-level staff, and outside contractors.

The title of our lecture, thought up by T-Mobile, is “If the Tower Doesn’t Grow, Can Municipalities Say No?”

The conference call is scheduled for Wednesday, April 25th at 11am PST/2pm EST.

If you’re invited, you should already have the call-in information.  If not, you’ll have to contact External Affairs to get it.

This should be fun!  I have lots of slides to share.

Heck, I’ve always wanted to be a headliner!

(Added 4/23 at 8:50 a.m. PDT: I’ve received several questions asking if non-T-Mobiler’s can sit in on the call.  The answer is that I wish I could say yes.  This is a closed webinar, so you’ll have to ask your contact at T-Mobile External Affairs whether you can join in. -jlk)

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