Category: Financial

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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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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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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Might Apple buy Sprint?

Posted on by Dr. Jonathan L. Kramer

Okay, it sounds wild, but let’s look at this for a bit…

Sprint has committed $15B to Apple in connection with securing rights to market the iPhone to Sprint’s subscribers (let’s not talk about the newest Apple product, the iHeatingPad). That’s a lot of cash, and I’ll bet that Apple’s contract leave virtually no room for Sprint to get out from under the weight of an 800 pound Apple.

At the same time, the $9B Sprint was expecting from LightSquared seems to drifted away. This raises very serious questions about the future of Sprint’s touted Network Vision upgrade. As a result, Sprint’s plans to shutter some 30,000 cell sites, relying on the Network Vision project to make it possible…must have dropped to ‘maybe’ status, too.

Clearwire. That word has turned into a blackhole of cash for Sprint, and Google just helped further devalue Sprint’s, ah, majority investment by dumping the Google-held shares at a 90% write off. WiMax is not Sprint’s path forward–LTE is. Clearwire may be too late to Sprint’s party.

Sprint’s Board of Directors last month vetoed Dan Hesse’s plan to buy MetroPCS (for a 30% premium, no less). That puts Dan Hesse’s future outlook at Sprint at a 30% deficit (others say that number is even worse). Will there be new blood on the head of the pin, much less new confusions over the direction the pin is pointing? Hey, how about T-Mobile buying MetroPCS?

This month, Sprint seems to have tried…and failed…to get a network sharing agreement with T-Mobile, according to the Wall Street Journal. I guess that shots a hole in my idea about a SprinT-Mobile merger.

Let’s not forget the grandest of Sprint’s Grand Experiments: Nextel. Oh, you want to forget about that? Likely Sprint does, too.

With research firm Sanford Bernstein dropping its rating on Sprint, citing that Sprint might visit BK land, the Bad News Band keeps marching on. For a thoughtful look at this particular issue, see the SeekingAlpha story of March 20th by clicking here.

Now let’s consider Apple.

Apple has attained the status of a ‘mythical creature’ that can seemingly devour all that blocks it path.

Apple has been fanatical about controlling, to the n-th degree, every element of its users experiences with all of the Apple devices. It controls the look and feel of the user experience, and via the App Store all of the applications on iPhones that have not been subject to a jailbreak, as well as iPads of various operating temperatures.

It must peeve Apple that it decided to confine its iPhone and iPad devices originally on an exclusive basis to AT&T to run on that carrier’s less-than-robust and less-than-adequate-capacity network, and one that actually gave up spectrum in the failed T-Mobile love affair.

Now, at least, Verizon subscribers have a better chance at being able to enjoy close to 3G speeds with their iSomethings.

Oh, yes, there’s that cash reserve thing for Apple. It’s sitting on more cash than the U.S. Treasury, and since last Summer it has been the most valuable company you’ll find in the U.S., and maybe anywhere in the entire galaxy.

If Apple thinks about it, it can have its cake and eat it, too: Buy Sprint, fund and complete Network Vision, deploy 4G at real 4G speed, and dump all of the Sprint phones save for Apple iSomethings. Using the software defined radios of Network Vision, Apple can actually build a wireless network that is optimized for data (but still including the voice app that defines LTE). Siri may be the first step to Skynet, albeit with a programmed sense of humor. (How much wood can a woodchuck chuck? See here.)

For Apple, a Sprint purchase would yield it monthly cash flow that can be put back into expanding and optimizing the “Apple Wireless” Network Vision. And given Sprint’s majority ownership in Clearwire (and the 106ish MHz Clearwire controls in the U.S.), Apple would have a real playground to expand data capacity and speeds.

Maybe Apple might make apply the principles of the iTunes Store to Sprint to shift the marketing of Sprint services to the faceless online monolith. Buy a phone and activate service online. Forget about pins dropping.

It just seems right for Apple to continue its quest to control everything its users see and do with the iSomethings now and in the future by controlling its own data delivery network. At the same time, it can keep feeding iSomethings to Verizon, AT&T, and any other carrier that can’t afford to be left in Apple’s iDust.

With the passing of Steve Jobs, the direct minutia-level control he seemed to exert on Apple (at least according to Isaacson) has also passed. This may free up the current management of Apple to take the leap (no, not Leap Wireless) to controlling even more of the user experience, but from a new distance, all without asking “WWSD?”

Of course, Apple might buy T-Mobile instead–or as well–and do more or less the same thing, but that’s a thought best left for a future post.

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KTLF to Conduct Sec. 6409 Teleconference on 4/5/12

Posted on by Dr. Jonathan L. Kramer

Sec. 6409: A Landmark Change in Wireless Tower Siting
KTLF to Conduct Special Webinar on April 5th for California Local Governments
(California MCLE Application Filed For 1 Hour Credit)

On February 17, 2012, Congress passed the “Middle Class Tax Relief and Job Creation Act of 2012″ (the “Act”) and sent it on to President Obama, who signed the Act into law. The President signed the Act into law. In 145 words, Congress has changed the process for collocations and site equipment changes, and added many new loopholes in the process. Here’s what the new law says:

Sec. 6409. WIRELESS FACILITIES DEPLOYMENT (a) FACILITY MODIFICATIONS.-
(1) IN GENERAL.- Notwithstanding section 704 of the Telecommunications Act of 1996 (Public Law 104-104) or any other provision of law, a State or local government may not deny, and shall approve, any eligible facilities request for a modification of an existing wireless tower or base station that does not substantially change the physical dimensions of such tower or base station.
(2) ELIGIBLE FACILITIES REQUEST.- For purposes this subsection, the term ”eligible facilities request” means any request for modification of an existing wireless tower or base station that involves –
(A) collocation of new transmission equipment;
(B) removal of transmission equipment; or
(C) replacement of transmission equipment.
(3) APPLICABILITY OF ENVIRONMENTAL LAWS.- noting in paragraph (1) shall be construed to relieve the Commission from the requirements of the National Historic Preservation Act or the National Environmental Policy Act of 1969.

The implications of these 145 words will be determined in cases that will queued up in various circuit courts.

Kramer Telecom Law Firm will be presenting a special 1-hour Webinar on April 5th at 10:00 a.m. PDT regarding the new law. This teleconference is open ONLY to local governments and is geared for local government attorneys. There is no charge for local governments to attend this Webinar.

While the teleconference will touch on relevant California laws, the main thrust of the teleconference will be quite useful to local government attorneys across the country.

The teleconference will review the provisions of the new law, and provide nuts-and-bolts strategies to address the challenges the new law raises. There is no limit on the number of persons at each location who can participate, but the number of locations is limited.

California MCLE Credit: An application is being filed with the State Bar of California to grant one (1) hour of general MCLE credit for this presentation.  If you wish to receive MCLE credit (if approved by the California Bar)  please be sure to provide your State Bar Number on the registration form where requested.   If more than one attorney per location seeks credit, be sure to provide all names and bar numbers on the sign-up form in the Questions and Comments section.

For information about reserving a spot for this teleconference, send us an online reservation via THIS LINK. Priority for the limited number of spots will be given in this order: (1) KTLF PC and Kramer.Firm clients; (2) SCAN & NATOA members working for governments; (3) other local governments.

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PCIA says Sec. 6409 worth “hundreds of millions of dollars”

Posted on by Dr. Jonathan L. Kramer

Let me start by saying that I personally like and respect Mike Fitch, who is the President and Chief Executive Officer of the PCIA – The Wireless Infrastructure Association.  I’ve had the pleasure of sitting next to him several times on panels at wireless and government conferences. Mike is a smart guy, well spoken, and well spoken of.

You know, however, that with a preface like that I’m leading to something…

I’m disappointed that in announcing the passage of Section 6409 to the various state wireless associations, Mike said in part in his memo:

Significant victory for the industry

This legislation is an important win for our industry. It will save hundreds of millions of dollars as the industry deploys new technologies without wasteful review of existing wireless infrastructure sites. This will enable better network planning and build-out on existing and new sites. It will produce more capital investment and job growth to keep up with the dramatic increase in wireless use.

(Emphasis added.)

Wasteful review of existing wireless sites?

I suspect that significant segments of the public and state and local governments don’t agree that their reviews of wireless site collocation applications is “wasteful.”  Rather, it’s far more likely that the public and governments would says that the review is necessary to promote community aesthetics, and to deter the expansion of legal non-conforming uses.

It’s interesting that in Mike’s public press release posted to the PCIA website, he omitted the “wasteful” reference, when he said:

This legislation is a significant victory for our industry and for all consumers, businesses and public safety agencies that rely on wireless connectivity. . . It is a common sense measure that will significantly reduce regulatory burdens on infrastructure deployment—saving the industry hundreds of millions of dollars over many years. The ultimate beneficiaries are the nation’s wireless users, who will gain access to better, faster and more ubiquitous service as a result of the accelerated pace of deployment.

It’s all in the eyes of the beholder.  What is wasteful to one is protective to another.  For now, however, the industry has scored a major victory.

Local governments are already talking about how to work with and around the worst parts of Section 6409, and how to track the results of those 145 words.

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TriStar Investors (a.k.a. “David”) v. American Tower (a.k.a. “Goliath”)

Posted on by Dr. Jonathan L. Kramer

The Northern District of Texas is the home of a significant wireless law suit just filed, and one which will be of keen interest nationwide to both industry members, and to wireless site landlords.  Heck, this case will fascinate the likes of Unison, Wireless Capital Partners, Communications Capital Group, Landmark, and the others who (like TriStar) purchase cell site leases and take easements in the property under cell sites.

In this case, David (TriStar Investors) is suing Goliath (American Tower and its various operating companies) for:

Count 1: Violation of the Lanham Act, 15 U.S.C. 1125(a)
Count 2: Unfair Competition
Count 3: Business Disparagement
Count 4: Tortious Interference with Existing Contract
Count 5: Tortious Interference with Prospective Business Relations
Count 6: Breach of Contract

In Count 7, TriStar asks (under Texas law) for a permanent injunction commanding American Tower to refrain from doing three things.

Specifically it asks the court to permanently bar American Tower from:

(1) making false statements about its own services and commercial activities in negotiations with landowners;
(2) making false statements about TriStar’s services and commercial activities in negotiations with landowners; and
(3) making statements to landowners under contract with TriStar for purposes of inducing a breach of the TriStar contract.

As set out in the introduction to the case by TriStar:

This is a case about unfair competition and false advertising in the cell tower industry. American Tower, a massive corporation, has resorted to unfair and illegal tactics in negotiations with landowners for cell tower sites when faced with competition from a tiny competitor, TriStar. Rather than competing fairly and acquiring sites through superior offers, American Tower has systematically misinformed and deceived landowners to acquire sites under less favorable economic terms than those offered by TriStar, to the material detriment of TriStar and landowners nationwide.

(Complaint @ 1)

Some interesting assertions taken from TriStar’s complaint:

“[B]eginning in 1999, carriers began to outsource their towers by transferring control of the towers to a new market entity: the
tower company.” (Compliant @ 25)  “The first transaction in which a carrier transferred control of its towers occurred in 1999. Under the terms of that transaction, Bell Atlantic sold actual ownership of the tower steel to Crown Castle.” (Compliant @ 28)

“The tower companies, in exchange for their investment of capital to control a tower site, were the beneficiaries of two critical opportunities: (1) the lease-back payment from the carrier that had previously owned the tower, and (2) the option to lease additional space on the tower to other wireless carriers.” (Complaint @ 26)

“Today, there are more than 100,000 cell towers in the United States. Over half of those towers are controlled by three major public tower companies.” (Complaint @ 27)

“American Tower recently disclosed that approximately 86% of the communications sites in its portfolio are located on leased land. In order to establish or maintain their control of tower sites and generate revenue, American Tower must negotiate new ground leases, or renewals of current ground leases, with landowners on an individualized basis.” (Compliant @ 30)

Here’s a biggie: “Since the formation of the cell tower industry in the mid-1990s, the total cash flow produced by a typical cell tower has increased by more than $50,000 per year, while the total cash flow received by a typical landowner in the form of ground rent has increased by less than $10,000 per year. Whereas the typical landowner previously received approximately 40% of a cell tower location’s total cash flow, landowners now typically receive less than 15% from the tower companies. Over the course of the past 15 years, the total cash flow from a typical cell tower has increased by more than 400%, while the share of total cash flow that is typically received by a landowner has declined by more than 50%.” (Complaint @ 33)  “A typical cell tower operated by American Tower produces annual gross cash flow in excess of $80,000 for the company, whereas the landowner of such site typically receives less than $15,000.” (Compliant @ 34)

Fascinating, eh?

Now, about TriStar, formed in 2005:

“Most commonly through execution of an easement with the landowner, but occasionally via a fee purchase or successor lease, TriStar acquires the right to manage a communications site once the underlying ground lease with the existing tower company expires. The tower company enjoys the full benefit of its lease for the duration of the existing term without interference from TriStar. Upon lease expiration, TriStar takes over the management of the tower property from the tower company and endeavors to maximize benefit to the landowner.” (Complaint @ 39).  [See my comments below for more on this. -jlk]

“TriStar has acquired (or has fully executed agreements to acquire) control of over 600 tower locations throughout the continental United States.” (Complaint @ 41)

Why is American Tower ticked at TriStar?

“Since entering the industry, TriStar has acquired property rights underlying several hundred tower locations leased or subleased by American Tower. TriStar’s business model is to not renew leases with American Tower when they expire, but instead to operate each tower site for wireless communications purposes upon expiration of the respective lease (either by acquiring rights to the existing tower or constructing a replacement tower at the same location, which is typically permitted by local zoning regulations).” (Complaint @ 43)

If the snippets above have not made you want to read the entire complaint then I don’t know what will.  The full complaint is linked below.  You really should read it if you’re into wireless as anything more than a

As a wireless attorney working for site landlords (both private parties and governments), I’ll be particularly interested in following this case.  I have some tower site landlord clients that have been warned by American Tower that if they sell their sites to anyone by American Tower, they face the wrath of Goliath’s legal department.  That’s even if the landlord today sells an interest that does not commence until after American Tower’s interest completely terminates.

Apparently, American Tower believes that one of its rights today, is to have the future opportunity to enter into a new contract after the current one expires.  That’s a legal stretch somewhat equivalent to you telling your office landlord that if today he enters into a new lease with a different tenant for your office space, and that new lease does not commence until after the final expiration date of your lease, you can sue the landlord claiming …. ah …. ah ….

I wonder how long it will take for some enterprising attorney to try to form a class of site landlords who have been ‘dissuaded’ by American Tower, but that’s for a different post.

Read the complaint…Don’t wait for the movie: David v. Goliath

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As LightSquared Fades, What of Sprint?

Posted on by Dr. Jonathan L. Kramer

As you likely know, the NTIA’s Assistant Secretary for Communications and Information, Lawrence E. Strickling  gave LightSquared a big, fat, wet Valentine’s day kiss when he wrote to FCC Chairman Genachowski saying, “…we conclude that LightSquared’s proposed mobile broadband network will impact GPS services and that there is no practical way to mitigate the potential interference at this time.”

You can read the full letter, which goes downhill from the quote above, by clicking on this link:  NTIA Letter to FCC Regarding LightSquared: Feb. 14, 2012.

While everyone else is talking about LightSquared, I’m wondering about the impact of the likely LightSquared disappearance from the arena on Sprint.  Just last June, Sprint and LightSquared announced that they had entered into a 15-year agreement for Sprint to promote LightSquared as its 4G solution (hey, does anyone remember a company called ClearWire who was promoted by Sprint to be its 4G solution?  I’m just ask’n…).

Under the Sprint deal, LightSquared was to pay $9 billion dollars and give Sprint another $4.5 billion in credits for LTE and satellite services.  Shortly thereafter, Sprint kicked the Network Vision project into high speed.

Side note 1: Network Vision, for those of you who have not yet seen the vision, ahem, is Sprint’s project to replace its BTS cabinets that do one thing on one band with shiny new BTS cabinets that can be easily adapted to provide multiple services on multiple bands at the same time.   That’s actually a smart thing from an engineering perspective, but it sure looks like Sprint was betting on LightSquared’s payments to fund a good portion of Network Vision.

Side note 2: The Network Vision project is connected with Sprint’s recently-announced plan to shutter 30,000-ish of its current leases as the new multiband BTS cabinets go in.  Shuttering that many site leases should save Sprint something on the order of $400 million per year, and make cell site landlords wary of entering into new leases that don’t have early termination fees (huh? Your lease doesn’t?  Too bad; so sad.)

So, what’s next for Sprint?  Certainly it has wisely given up on WiMax as a real, long term 4G solution.  It looks like everyone agrees that LTE is the real answer, so the sinking of LightSquared’s ship is hardly likely to re-float ClearWire’s boat in Sprint’s eyes (or any other sets of eyes for that matter).  Since Sprint recently missed out on the “Buy Your Next Band From The Cable TV Guys” deals, its even farther down the spectrum rabbit hole.  Sprint needs frequencies, and it needs them last week.

This brings me full-circle back to an earlier blog post, from last September, when I mused on the idea that Sprint and T-Mobile would make a mighty fine look’n couple, and I even worked up a possible wedding announcement:

See: SprinT-Mobile?

T-Mobile has kept a nice dowry of cash (and better, spectrum) from when the DOJ forced AT&T to leave T-Mobile at the alter.  So like Sprint, T-Mobile has a pressing need to get married.  If not to each other, then to others, but marriages are on the horizon.

See you at the wedding(s).  I’ll be at the bar.

Jonathan

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Buddy, can you spare $9B?

Posted on by Dr. Jonathan L. Kramer
Please feed the T-Mobile Kitty. (Photo illustration by Jonathan Kramer)

So T-Mobile, recently left at the alter by AT&T, is now looking for $9B to build out a LTE network that can compete with AT&T.

T-Mobile has a great start towards its goal when you consider that AT&T gave it $4B as a parting gift.  If you have some loose change or small bills, please drop it in Carly’s cup.  Heck, all she needs is another $5B.  Easy!

$9B’s a lot of investment money simply to split the market even more than it is, today.  It’s also interesting that T-Mobile seems determined to join the rest of the world by going to 4G via LTE rather than via its current industry-isolating path of HPSA+ (also known as “it’s 4G if we say it’s 4G”).

I continue to believe that T-Mobile will either join forces with Sprint (can you say “SprinT-Mobile”?) or T-Mobile will acquire one or several smaller regional carriers.  How about “Hello…Hello…Hello” for example.  A dark horse: Maybe Deutsche Telekom, T-Mobile’s German parent will sell off its entire worldwide wireless network to some small country…or maybe to Microsoft.

Only time…and money…will tell.

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NextG Networks sold to CrownCastle

Posted on by Dr. Jonathan L. Kramer

This sale marks CrownCastle’s undisputed dominance of the Distributed Antenna System (DAS) market…for now. My prediction, however, is that we are seeing the peak of the DAS market, and that cable TV operators will become the new DAS leaders as they deploy wireless carrier services connected to their existing cable plant backhaul networks. More on this in a couple of days.

As for this sale, don’t forget that NextG is the owner of the basic patents in this field, which presumably will now be controlled by CrownCastle. Also, don’t forget that earlier this year CrownCastle purchased NewPath Networks, another major DAS provider (and a target of a NextG patent infringement lawsuit…I guess that’ll go away now.)

HOUSTON, Dec 16, 2011 (GlobeNewswire via COMTEX) — Crown Castle International Corp. CCI -2.21% announced today that it has entered into a definitive agreement to acquire NextG Networks, Inc. (“NextG”) for approximately $1.0 billion in cash (subject to certain adjustments). NextG, the largest provider of outdoor distributed antenna systems (“DAS”), currently has over 7,000 nodes-on-air and a further 1,500 nodes under construction. In addition, NextG has rights to over 4,600 miles of fiber. DAS is a network of antennas connected by fiber to a communications hub designed to facilitate wireless communications services for multiple operators. The acquisition will expand Crown Castle’s portfolio of DAS, providing additional wireless coverage and capacity solutions to customers beyond those areas traditionally served by towers. The acquisition is expected to close in the second quarter of 2012. Crown Castle expects to fund the acquisition with debt financing.

“Increasingly, we believe that small-cell architecture, such as DAS, will be an important complement to traditional macro tower installations,” said Ben Moreland, Crown Castle’s President and Chief Executive Officer. “We are very pleased with our anticipated acquisition of NextG, which furthers our ability to extend wireless infrastructure beyond those areas traditionally served by towers, thereby broadening our service offering in this growing market and positioning us to benefit from the continued demand for wireless data. We expect the impact to recurring cash flow per share from the contemplated acquisition and related expected debt financing to be approximately neutral at closing. Further, we believe this acquisition increases our growth rates and is accretive to long-term recurring cash flow per share.”

“Our agreement today is testament to the market leadership NextG has achieved over the past few years and to the increasingly critical role small-cell solutions, including DAS, have played and will play in the future to ensure reliable and comprehensive wireless infrastructure,” said Steven Moskowitz, NextG’s Chief Executive Officer. “I am proud of all that our employees have accomplished. We have significantly expanded our footprint, broadened our customer relationships, improved our network deployment efficiency, and continuously upgraded our technology and customer service. Our technology solution will be additive to Crown Castle’s industry-leading offering, and I am confident that NextG and its employees will be strong contributors to Crown Castle’s success for many years to come.”

Consistent with Crown Castle’s focus on the top 100 BTAs in the US, over 90% of NextG nodes are in urban and suburban locations, with 80% in the top ten US metropolitan areas, including New York, Los Angeles, Chicago and Dallas Fort Worth. The NextG assets are expected to provide significant growth, as they currently average only 1.25 tenants per network. Following the contemplated acquisition, Crown Castle expects to be the largest independent DAS operator in the US, with approximately 10,000 nodes and 26 venues in operation or under construction.

NextG is to be acquired from a group of investors led by Madison Dearborn Partners, a private equity firm. Madison Dearborn, Accel Partners, Redpoint Ventures and Meritech Capital Partners purchased NextG in 2009. NextG is being advised by Deutsche Bank Securities Inc., Kirkland & Ellis LLP and Kelley Drye & Warren LLP. Crown Castle is being advised by Cravath, Swaine & Moore LLP.

About Crown Castle

Crown Castle owns, operates, and leases towers and other infrastructure for wireless communications. Crown Castle offers significant wireless communications coverage to 92 of the top 100 US markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 22,000 and approximately 1,600 wireless communication sites in the US and Australia, respectively. For more information on Crown Castle, please visit www.crowncastle.com .

The Crown Castle International Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3063

About NextG Networks

NextG Networks is a market leader in outdoor DAS and other small-cell solutions, using fiber-fed systems to operate carrier-class wireless networks. With its proprietary fiber-optic architecture and expertise in public way access, NextG designs, permits, builds, operates and manages low power wireless networks. NextG’s distributed systems are protocol-neutral, enabling them to support multiple wireless carriers, services and technologies. NextG provides transport and backhaul services to wireless service providers over discrete, multi-frequency, scalable fiber networks that improve wireless service coverage, capacity and performance. With main offices in Boston, MA, and Silicon Valley, CA, NextG operates wholly-owned regional subsidiaries throughout the United States. For information, visit NextG Networks online at www.nextgnetworks.net .

About Madison Dearborn Partners

Madison Dearborn Partners, based in Chicago, is one of the most experienced and successful private equity investment firms in the United States. Since MDP’s formation in 1992, the firm has raised six funds with aggregate capital of over $18 billion and has completed approximately 120 investments. MDP invests in businesses across a broad spectrum of industries, including basic industries; consumer; financial services; health care; and telecom, media and technology services. Madison Dearborn has a long and successful track record of wireless-related investments, including MetroPCS Communications, Asurion, Omnipoint Corporation, Alaska Native Wireless, Clearnet Communications, Nextel Communications, Nextel Partners and Weather Investments. Other Madison Dearborn investments in the telecom, media and technology services space include Fieldglass, XM Satellite Radio, Intelsat and Univision Communications. For more information, please visit www.mdcp.com .

Cautionary Language Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based on Crown Castle management’s current expectations. Such statements include plans, projections and estimates regarding (i) the timing of closing of the contemplated acquisition of NextG (“Contemplated Acquisition”), (ii) funding of the Contemplated Acquisition, (iii) the utility and role of DAS and small-cell architecture, (iv) the impact of the Contemplated Acquisition on Crown Castle’s success and operating results, including growth rates and recurring cash flow per share, (v) growth opportunity of NextG assets, and (vi) Crown Castle’s relative position in the DAS market following the Contemplated Acquisition. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including prevailing market conditions and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors that could affect Crown Castle’s results is included in our filings with the Securities and Exchange Commission. The term “including,” and any variation thereof, means “including, without limitation.”

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Crown Castle International Corp.

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