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Lease Optimization – that old familiar story

Posted on June 29, 2012 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.

FCC Likely to Revisit RF Emissions Safety Rules

Posted on June 18, 2012June 18, 2012 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.

Sprint Moves to Meter Data Services

Posted on June 9, 2012June 9, 2012 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.

Cell Tower Deaths on PBS Frontline 5/22/12

Posted on April 29, 2012 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.

Why not WiMax, Sprint? Oh, it’s LTE. Got it.

Posted on March 20, 2012March 19, 2012 by Dr. Jonathan L. Kramer

Sprint, whose original “4G” network was to be built on a WiMax platform, is moving to deploy an LTE network in place of WiMax. This means that Sprint is currently running 2 types of “4G” technology on its network, LTE and WiMax.

The problem with WiMax is that its availability is limited and its performance, when compared to LTE, is not lighting fast. It’s just DSL fast and we all know that isn’t really that fast. Another limitation of WiMax is the farther you get from the node the slower the network speed. Who wants slower speed?

Is Sprint ditching its WiMax partner? It appears so.

The big push to deploy LTE seems to be a result of pressure from Sprint’s consumers rather than a big difference in the technology. I mean, all the other big time providers are deploying LTE, why can’t Sprint’s customers have LTE?

WiMax might still have viability in other platforms like broadband internet access as a landline bypass, as cable or satellite TV bypass, or for providing some limited backhaul services.

One thing that seems almost certain, is that WiMax viability as a mobile telephone provider is waning as LTE is becoming the next go to technology for high speed mobile data.

Quote from PCIA’s Webinar on Sec. 6409

Posted on March 19, 2012March 19, 2012 by Dr. Jonathan L. Kramer

I had a chance to legitimately listen in on the PCIA’s webinar last week providing their membership with the industry’s view of how the new rules are to be used, and taught to local governments.

I won’t go into much detail now about the PCIA’s webinar now, other than to say three things:

1. It was informative to hear the PCIA’s view of the strengths and weakenesses of the new law; and

2. Far more teaching than boasting occured (to the PCIA’s credit); and

3. The ‘quote of the meeting’ (relating to a local government’s limited ability to deny a Sec. 6409 project) was:

“If the tower doesn’t grow, they can’t say no!”

I’ll be sharing more from the PCIA’s webinar when I conduct mine (for local government attorneys/agencies) on April 5th. If you qualify, please sign up at http://bit.ly/sec6409.

About half the slots are now reserved, so please don’t wait until the last moment to sign up. One hour of MCLE credit has been applied for.

Protected: Private Post 393

Posted on March 17, 2012March 19, 2012 by Dr. Jonathan L. Kramer

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

Posted on March 14, 2012March 19, 2012 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.

One Industry View of 6409

Posted on March 3, 2012March 3, 2012 by Dr. Jonathan L. Kramer

Lisa Murphy, of LeClairRyan in Norfolk, Virginia is an attorney representing wireless carriers in land use matters (read: she represents carriers before government agencies). On February 24th, Lisa and I spoke on a panel at the AGL Conference in Las Vegas, which touched on Section 6409’s potential impacts on the siting process.

Not surprisingly, Lisa and I do not agree on how far 6409 will reach to change the siting process. That said, the views expressed in her recent blog post are well worth considering in the larger context of the national discussions now beginning on how to implement this new law.

At first glance, this would appear to require all state and local governments to approve collocation requests as well as any site upgrades. What is interesting about the language Congress chose is that it left open the possibility that state and local governments could still deny applications for collocation on structures that are not “existing towers”, as was indicated in a February 22nd blog post by Jonathan Kramer, with whom I presented a program last Friday at the AGL Western Regional Wireless Conference entitled, “What We Can Teach Municipalities About Wireless”. Jonathan advises local governments on how the 1996 Telecommunications Act impacts their authority to zone and permit wireless sites and assists municipalities in their review of wireless site applications. Jonathan’s position is that collocating antennas on structures that are not “wireless towers” could still be subject to denial by municipalities depending on the applicable local ordinances and how they define the term “tower”. Our other co-presenter, Robert Jystad, who represents carriers and tower companies on all facets of site development, and I disagreed with Jonathan on the practical impact the new law would have on site development and site upgrades, but all on the panel agreed that this will no doubt lead to interesting conversations at the local and state level, between lawyers for the industry and state and local government representatives.

I disagree with Jonathan and agree with Robert that Section 6409 will likely trump state and local ordinances to the extent that they prevent modifications to “grandfathered” sites, sites that were never zoned or that pre-date current wireless tower ordinances. I also agree with Robert that Section 6409 should apply to collocation on all structures. Unfortunately, there is no record of Congress’ intent with regard to the interpretation of the phrase “existing tower”, but given its plain meaning and Congress’ explicit intent to usurp the authority of state and local governments to deny collocation and site modification requests, the term arguably applies to any structure that can support wireless antennas. In that regard, Section 6409 may also trump zoning conditions imposed on towers that limit antenna collocation and placement. One thing that Section 6409 did not do was waive any existing requirements imposed by the National Historic Preservation Act (“NHPA”) or the National Environmental Policy Act of 1969 (“NEPA”). As a result, to the extent that a proposed collocation or antenna modification implicates NHPA or NEPA, compliance is still required. Interestingly, Congress did not carve out or exclude from Section 6409 environmental or historical reviews that may be required under state or local law, only federal law.

Lisa makes other interesting and informative points from the industry’s view. To read her entire blog post click here. Look around her blog while you’re there.

Recommended.

Congress Gifts Wireless Industry with By-Right Collocation…Or Does It?

Posted on February 18, 2012February 19, 2012 by Dr. Jonathan L. Kramer

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 for his signature. It seems likely that the President will sign the Act.

The California Wireless Association said about the Act in an email bulletin to its members (of which I am one): “In effect, Section 6409 exempts from local discretionary review collocations and modifications that do not substantially increase the size of the tower.” Well, that’s one view, but it’s not complete, and it’s not that simple.

Let’s review….

Congress’s Election Year Gift to the Wireless Industry

As I discussed in a prior post, the Act contains the following significant gift to the wireless industry, grafted on to this Act from its former home in the stalled S.911 :

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.

Since it appears very likely that Sec. 6409 will become the law of the land, let’s take some time to dissect it for impact, defenses, and results.

What Types of Sites Are Protected by Sec. 6409?

Sec. 6409 does not on its face apply to any structures other than existing wireless towers. The Act does not even define what constitutes a “wireless tower.”

Absent some local government code definition to the contrary, a building with an existing cell site on it is not a wireless tower; a park light standard with an existing wireless cell site is not a wireless tower; a church steeple with a cell site inside it is not a wireless tower; a billboard with an existing wireless site is not a wireless tower; a mono-cross is not a wireless tower.

In reality, relatively few physical structures should be called a “wireless tower” (especially by governments).

While it’s difficult to argue that monopoles are not wireless towers, if the monopole has a light standard on it located in a parking lot, and the monopole was put in to add wireless to a prior existing light standard, then it is straight-forward to argue that the monopole with the light standard is not a wireless tower. It was a replacement for a light standard that was not a wireless tower, and the original use was preserved. Yes, this is the wireless equivalent of “Who’s on First?! Who! Who?”

Let’s turn to the Act’s coverage of a “base station” (no pun intended). The term “base station” is also not defined in the Act. Since the term can mean different things depending on which side of the planning counter you normally stand, let’s take a closer look.

If the term “base station” means equipment cabinets, and a site presently has two cabinets, then doubling the number of cabinets to four would certainly be a substantial change in the physical dimensions of the base station. If the existing “base station” is contained within a closed room or building, then doubling the number cabinets of the base station might not be a substantial change. Context is important.

Since site configurations differ from site to site, carrier-to-carrier, and location-to-location, we can’t say in knee-jerk fashion whether an expansion of 5% of 50% of a wireless tower or base station is a substantial change in the physical dimensions for the purposes of the Act. This will take a case-by-case reasoned analysis to reach a sound answer.

“Or” v. “And” Makes a Big Difference

Next, let’s look at how Sec. 6409 requires we evaluate a change in physical dimensions.

Sec. 6409(a)(1) does not say, ‘…a modification of an existing wireless tower and base station…’ Rather, it bifurcates the analysis when it says, in fact, a “…modification of an existing wireless tower or base station…” (Emphasis added). This one word change unambiguously means that if a collocation proposal comes in for an existing wireless tower, then the government should conduct a two prong analysis.

The first prong is to determine whether the proposed expansion on the wireless tower will “substantially change the physical dimensions of [the existing] wireless tower.” The second prong asks whether the proposed collocation will “substantially change the physical dimensions of the [existing] base station.”

If the answer to either prong is yes, then the collocation would fall outside of the rights and protections granted under Section 6409. That said, then the government must still consider whether the project is one that should be permitted, conditioned, or barred under the local code governing wireless site installations.

An “Eligible Facilities Request” — Not As Obvious as it Might Seem

Turning to Section 6409(a)(2), now let’s look at what constitutes an “ELIGIBLE FACILITIES REQUEST.”

The term ‘eligible facilities request’ has three distinctly separate meanings, all of which are important to governments. The first is that it means any request for modification of an existing wireless tower or base station that involves “collocation of new transmission equipment.” This seems to be the main thrust of the Act, but it is interesting that the collocation of new transmission equipment does not mean the collocation of a new carrier or carriers on an existing tower. There may be some governments that look at the plain text and say that this subsection (a)(2)(A) only applies to the existing occupant(s) on the real wireless tower who are, for themselves only, collocating new transmission equipment.

Subsection (a)(2)(B) makes it clear that an existing carrier on the wireless tower may by right remove its transmission equipment on the tower or at the base station. Governments will like this section, since it will result in a reduction in the visual impact of a wireless site.

Subsection (a)(2)(C) makes it clear that an existing carrier on the wireless tower may by right replace its existing transmission equipment. Again, size matters, if the replacement will be substantially larger or smaller compared to the existing transmission equipment.

NHPA & NEPA: Status Quo

I’m not going to spill too much e-ink over (a)(3). The status quo is maintained and the as the FCC’s duties under the National Historic Preservation Act or the National Environmental Policy Act of 1969 are reaffirmed.

Recommendations to Governments

As a government wireless planner, you are about to have gleeful carrier reps–and even more gleeful carrier attorneys–telling you that Sec. 6409 makes your job soooo much easier now: Just say ‘yes’ to every collocation and your government won’t get sued. They might even suggest that you tell the public that Congress is to blame for all this, rather than the carrier, right? Well, no, it’s not that easy for you, the carrier, or the public.

A careful, informed, rational project analysis is absolutely required to insure that governments are not granting collocations “by right” where no “by right” truly exists.

Start by looking at your wireless ordinance. (You do have one, right?) Does your ordinance contain a provision that actually defines a “wireless tower” or a “tower” or a “base station”? You are certainly going to want to review and likely tighten up those definitions to limit undesirable spillover. For example, if you define wireless tower to mean every wireless site, then your definition will need to be changed pronto!

Use a detailed wireless application form (you should be using one, anyway). Don’t blow your FCC Shot Clock deadlines because you didn’t use a detailed application, and you didn’t review the complete application at the time it hit your planning counter. Consider requiring wireless applicants to make appointments to tender applications so you’ll block enough time to review project at the counter. If the application is incomplete, make sure the applicant leaves with an incomplete letter at the time so that the shot clock doesn’t begin to run.

Sec. 6409 does not preempt a local government’s right (and some think a duty) to evaluate current and planned emissions for compliance with the FCC’s standards at 47 C.F.R. § 1.1307 et seq. and FCC OET Bulletin 65. If the the by-right collocation project won’t comply with the FCC rules–and some don’t as proposed–then don’t be bullied into permitting a non-compliant project.

Especially consider legal non-confirming wireless towers and sites (a site that was legal under local law at the time it was constructed, but would not be permissible today under current local law…think “ugly monopole”). The Act’s language would suggest that a government cannot deny a proposed collocation on a legal non-conforming site. Your government may well want to amend your local code right now to indicate that other than maintaining or replacing existing antennas with like sizes and shapes, any other material changes would be deemed to be ‘substantial’ for the purposes of collocation under the Act. I’m sure that a lot of wireless industry attorneys will disagree, but most governments tolerate legal non-confirming uses only so long as they are not exacerbated or extended in term.

Speaking of term, some states (like California) permit local government to limit the length of wireless site permits to some term of years. In California, the shortest term is normally 10 years, but modifying by expansion a legal non-confirming site would likely fall within the exception permitted in the Government Code (I helped write this section of the California Government Dode…call me…I’ll tell you more).

If you face granting a mandatory collocation on a wireless site that will term out, say, in 7 years, then you’ll want to term-limit the collocation permit to expire at the same time as the underlying site permit. This will be especially important in legal non-confirming settings.

I’m sure that some governments will use the enactment of Sec. 6409 to justify adopting a siting moratorium. It may well be justified given the potentially drastic impacts the new law will have on a major sector of wireless siting. We’ll have to wait and see.

Recommendations to the Industry

Congratulations industry, you’ve earned a well-funded victory at Congress!

Now, don’t overstate the scope of your new rights when dealing with governments.

Please don’t say that diesel generators to provide standby power are somehow “transmission equipment.” It won’t fly, and you won’t get points for creativity, either.

Don’t make hollow threats of law suits, especially over technicalities such as trying to torture and graft favorable current meanings from ordinance terms created years ago for a substantially different purpose. You’ll find enough legitimate bad-actor cases to develop case law that will rationally guide governments…and carriers…how to use the new law as a surgical tool where truly needed, rather than a blunt force instrument to inflict trauma simply for trauma’s sake.

Remember that governments may consider using your blunt force instrument threats to justify a siting moratorium for up to a year, or even longer. Is that what you really want?

Work with governments to ease into this paradigm shift. You’ll both be happier, even if the public won’t be.

Please (don’t) let the games begin.

___________________________

About the author:

Jonathan Kramer is a California-based radio frequency engineer, wireless siting advisor, and an attorney working primarily on behalf of local governments and wireless site landlords around the U.S. Jonathan notes that the opinions expressed in this article are his own, and do not necessarily reflect those of any of his clients, friends or foes. Kramer’s main website is TelecomLawFirm.com.