AB57 Amended: First Baby Tooth Added

As I predicted in yesterday’s post, AB 57 was, in fact, amended to start adding teeth.  The first tooth is a innocuous…adding a representative of the League of California Cities and a representative of the California State Association of Counties to the board of the California Broadband Council.

But in the best hide-the-ball tradition, the real bite of this legislation, yet to be added (but surely it will), is related to this intent:

Existing law declares the intent of the Legislature that, consistent with this authorization, municipalities have the right to exercise reasonable control as to the time, place, and manner in which roads, highways, and waterways are accessed, but that for the control to be reasonable it must, at a minimum, be applied to all entities in an equivalent manner.

The “all entities” language just above suggests that a tooth about to pop through the gums will be a legislative requirement that telegraph or telephone corporations be treated like all entities in the right-of-way, which would include gas, water, sewer and most importantly electric utilities.  If this is the goal of AB57, yet to be disclosed in this legislation, then it does not well serve Assembly Member Quirk’s constituents or property owners in California.  The various utilities each have unique technical requirements for installation, operations, and the like for their equipment.  It is illogical to equate any of the utilities to any of the other in the right of way.  Trying to do so would only encourage the installation of cell sites in residential areas without suitable aesthetic controls simply by saying that 100 years ago PG&E installed a pole, overhead lines and facilities in the area, 100 years later a wireless carrier should be able to do the same thing.  There is a substantial difference between a 32,000 volt electrical circuit in the right-of-way and a cell site in the right-of-way.  Hopefully this legislation, as it continues to be amended, will not try to make them the same.

So far, the first amendment to add a representative of the League of California Cities and a representative of the California State Association of Counties to the board of the California Broadband Council is innocuous, but more teeth and sharper teeth are sure to come…soon.

Here is the bill as it stands today, March 28, 2015:

BILL NUMBER: AB 57 AMENDED
BILL TEXT

AMENDED IN ASSEMBLY MARCH 26, 2015

INTRODUCED BY Assembly Member Quirk

DECEMBER 2, 2014

An act to amend Section 8886 of the Government Code,
relating to communications.

LEGISLATIVE COUNSEL’S DIGEST

AB 57, as amended, Quirk. Broadband communications infrastructure.

The existing federal Telecommunications Act of 1996 preempts any state or local statute or regulation that may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service, but service. However, this provision does not prohibit a state from imposing imposing, on a competitively neutral basis, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. The prohibition also contains a “safe harbor” that does not affect the authority of consumers, nor does it prevent a state or local
government to manage from managing the public rights-of-way or to require requiring fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis.

Under existing law, telegraph or telephone corporations may construct lines of telegraph or telephone lines along and upon any public road or highway, along or across any of the waters or lands within the  state, and may erect related poles, posts, piers, abutments, and other necessary fixtures of their lines, but may not incommode the public use of the road or highway or interrupt the navigation of the waters. Existing law declares the intent of the Legislature that that, consistent with this authorization, municipalities have the right to exercise reasonable control as to the time, place, and manner in which roads, highways, and waterways are accessed, but that for the control to be reasonable it must, at a minimum, be applied to all entities in an equivalent manner.

Existing law establishes the California Broadband Council in state government for the purpose of promoting broadband deployment in unserved and underserved areas of the state and broadband adoption throughout the state, imposes specified duties on the council relating to that purpose, and specifies the membership of the council.

This bill would state the intent of the Legislature to enact legislation to promote the deployment of communications infrastructure by removing barriers to investment. The bill would add the President of the Board of Directors of the League of California Cities and the President of the Executive Committee of the California State Association of Counties, or their respective designees, to the membership of the council. 

Vote: majority. Appropriation: no. Fiscal committee: no
yes. State-mandated local program: no.

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

SECTION 1. The Legislature finds and declares all of the following:

(a) California consumers and businesses have adopted new, Internet-based technologies and mobile connections at an unprecedented rate. Internet-based products and devices, including smartphones and tablets, are providing consumers everywhere with new choices to connect, to communicate, and to access information and entertainment.

(b) The deployment of faster, more robust, and advanced wireless and wireline broadband infrastructure is essential to ensuring there is sufficient capacity and coverage to support the increasing reliance of California residents on broadband services.

(c) State and local review of broadband infrastructure deployment serves important interests, but at the same time, California must take steps to ensure that requirements do not hinder investment.  State and local permitting processes should be designed to eliminate unnecessary barriers and spur deployment of infrastructure. This includes streamlining permitting requirements to reduce delay and cost, and the creation of uniform processes.

(d) New and upgraded infrastructure delivers a vast array of consumer and community benefits, including important improvements to public safety, education, and healthcare. The power of mobile communications is a critical tool for first responders in emergency situations. According to the Federal Communications Commission, nearly 70 percent of 911 calls are made from mobile telephones, and that percentage is growing.

(e) As we continue the transition to a knowledge-based, technology-driven economy, California must invest in students and provide them with the proper tools and technologies to bolster academic achievement, starting with expanding access to high-speed broadband Internet and next-generation Internet Protocol-based networks.

(f) Facilitating broadband deployment additionally plays a key role in advancing telemedicine and mobile health applications, which can help Californians remotely monitor their health while reducing medical costs.

(g) Wireless broadband is also key to economic development and a driver for new business and jobs. Businesses increasingly depend on strong wireless broadband service to carry their employees through the work day. An estimated 94 percent of small businesses surveyed use smartphones to conduct business and mobile technologies are saving the country’s small businesses more than sixty-five billion dollars ($65,000,000,000) a year.

(h) Broadband infrastructure deployment creates jobs. A 2013 study conducted by the research firm Information Age Economics projects that wireless infrastructure investment will generate as much as one trillion two-hundred billion dollars ($1,200,000,000,000) in economic growth while creating over 1.2  million new jobs, nationally, over the next five years.

(i) It is the intent of the Legislature to enact legislation to promote the deployment of communications infrastructure by removing barriers to investment. Removing investment barriers is critical to meeting the surging demand by California residents for advanced wireless and wireline broadband technologies and services, supporting  and enhancing critical public safety needs, and bridging the digital divide by increasing access for more Californians to improved education, health care, and economic development opportunities.

SEC. 2. Section 8886 of the Government
Code
is amended to read:
8886. (a) The membership of the California Broadband Council shall include all of the following:
(1) The Director of Technology, or his or her designee.
(2) The President of the Public Utilities Commission, or his or her designee.
(3) The Director of Emergency Services, or his or her designee.
(4) The Superintendent of Public Instruction, or his or her designee.
(5) The Director of General Services, or his or her designee.
(6) The Secretary of Transportation, or his or her designee.
(7) The President of the California Emerging Technology Fund, or his or her designee.
(8) A member of the Senate, appointed by the Senate Committee on Rules.
(9) A member of the Assembly, appointed by the Speaker of the Assembly.
(10) The President of the Board of Directors of the League of California Cities, or his or her designee.

(11) The President of the Executive Committee of the California State Association of Counties, or his or her designee.

(b) Members of the Legislature appointed to the council shall
participate in the activities of the council to the extent that their
participation is not incompatible with their positions as Members of
the Legislature.


If you’re wondering about Government Code Section 8886, here’s what it says as of today:

8886. (a) The membership of the California Broadband Council shall
include all of the following:
(1) The Director of Technology, or his or her designee.
(2) The President of the Public Utilities Commission, or his or
her designee.
(3) The Director of Emergency Services, or his or her designee.
(4) The Superintendent of Public Instruction, or his or her
designee.
(5) The Director of General Services, or his or her designee.
(6) The Secretary of Transportation, or his or her designee.
(7) The President of the California Emerging Technology Fund, or
his or her designee.
(8) A member of the Senate, appointed by the Senate Committee on
Rules.
(9) A member of the Assembly, appointed by the Speaker of the
Assembly.
(b) Members of the Legislature appointed to the council shall
participate in the activities of the council to the extent that their
participation is not incompatible with their positions as Members of
the Legislature.

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Who is Dr. Jonathan L. Kramer?

Dr. Jonathan L. Kramer, Esq., AS, JD, LL.M, LP.D
Founder and Shareholder
at Telecom Law Firm, P.C.

Dr. Jonathan Kramer, Esq., J.D., LL.M, LP.D is Telecom Law Firm’s founder and senior attorney. He has  more than 40 years of wireless and broad telecommunications technology engineering and management experience.

Holder of the highest-grade FCC land-based commercial, digital marine, and amateur radio licenses, as well as the FCC’s highest grade marine radio maintainers license, Jonathan has also been licensed as a telecommunications contractor in California for over 30 years.

Jonathan is admitted to

  • the State Bar of California (2006);
  • the State Bar of New Mexico (2013);
  • the United States District Court for the Central District of California;
  • the United States District Court for the District of New Mexico;
  • the 9th Circuit Court of Appeals; and
  • the 10th Circuit Court of Appeals.

Jonathan is also a member of the International Municipal Lawyers Association, NATOA, SCTE (US), SCTE (EU), the SBE, and the ARRL.

Licensed by the Federal Communications Commission (General Radiotelephone Operator License PG-11-35289, with Ship Radar) (Previously licensed as a Second Class Radio Telephone Operator, Sept. 1975; First Class Radio Telephone Operator, Nov. 1977; General Radiotelephone Operator License, June 1987); GMDSS Radio Maintainer License DM00000680, with Ship Radar endorsement, May, 2008); GMDSS Radio Operator/Maintainer License DB00000530, with Ship Radar endorsement, May, 2008); Restricted Radiotelephone Operator License RR00066117.

Jonathan Kramer is also licensed by the Federal Communications Commission as an amateur radio operator since November 1970; currently licensed as an Extra Class operator (W6JLK). Formerly licensed as an Advanced class operator; Formerly licensed as a General class operator; Formerly licensed as a Novice class operator. (KD6MR, KP6AY, WB6FDE, WN6FDE).

Current member of the Executive Board of the Public Law Section of the  California Lawyers Association (“CLA”)(Term: September, 2023 through September, 2026).   The CLA is the successor to the state bar sections (see immediately below).

Former member of the Executive Board of the Public Law Section of the State Bar of California (Term: September, 2008 through August, 2011).  Since 2011, Jonathan was also an appointed advisor to the Public Law Section Executive Board.

Book article author and review editor on amateur radio cable television radio frequency (RF) interference matters.

Served as the advisor to the League of California Cities during the key negotiations and hearing regarding SB1627, California’s 2006 wireless co-location law.

Wireless technology advisor to and testifying expert before the FCC’s State & Local Government Advisory Committee (LSGAC).

Co-author, editor of wireless technology advisory to local governments based on OET Bulletin 65 published by the FCC, June 2000 titled, “A Local Government Official’s Guide to Transmitting Antenna RF Emission Safety: Rules, Procedures, and Practical Guidance”.  Mr. Kramer will be revising this federal publication during 2014.

Former National Board of Directors member, National Association of Telecommunications Officers and Advisors (NATOA), an affiliate of the National League of Cities (previous term: 1997-2000, 1992-1994).

Former Co-chair of National Technical Standards Committee appointed by NATOA, National League of Cities, and US Conference of Mayors to develop the national RF technical standards for cable television systems adopted by the FCC in February 1992.

Witness before the FCC’s State & Local Government Advisory Committee on OET 65, March 2000 (Washington, D.C.).

Invited witness before the FCC in Cable TV re-regulation hearings, March 1990 (Orlando, Florida).

Right of Way engineering and management expertise related to telecommunications networks and radio communications siting.

Testifying expert witness in federal and state court cases regarding cable television technology, and federal and state court cases regarding wireless technology.

Technology speaker at every NATOA National Conference 1988-2000; and 2002-2004. Technology speaker at many regional and local NATOA conferences and meetings.

Dr. Kramer is an Appointed Volunteer Counsel, American Radio Relay League, Southwestern Division.

Communications technology speaker at multiple Society of Cable Telecommunications Engineers conferences, and cable industry conferences Published author of book and magazine articles on communications technology, plant safety, construction and administration.

Cable system engineering and technical management experience six years: System Engineer/Chief Technician; Technical Manager; Regional Technical Manager.

Former Field Engineering Representative for Motorola Communications and Electronics, Area F Program Management team – Areas of experience include microwave radio; baseband RF and audio; digital signaling; UHF and VHF two-way radio (including high stability Simulcast® radio operations); telephony; and command and control communications.

Certified by APCO Institute as a Public Safety Radio Technician (2008-2025)

Dr. Kramer was awarded a Doctor of Law and Policy degree (LP.D) from Northeastern University in September, 2016.  He was awarded a Master of Law Degree (LL.M.)with distinction in Information Technology and Telecommunication law in June, 2013 by the University of Strathclyde School of Law.   He was awarded a Juris Doctor degree cum laude, from Abraham Lincoln University School of Law in 2001.  Mr. Kramer earned an AS Degree in Radio Communications with honors from Los Angeles Trade Technical College.

Dr. Kramer currently teaches regulatory law and policy at Northeastern University.

Founder/Shareholder

Telecom Law Firm, P.C.

Telecom Realty Corporation

Memberships and Registrations

State Bar of California. SBN No. 244074.

State Bar of New Mexico. SBN No. 145319.

Bar of the United States District Court – Central District of California

Bar of the United States District Court – District of New Mexico

Bar of the United States 9th Circuit Court of Appeals

Bar of the United States 10th Circuit Court of Appeal

Member, International Municipal Lawyers Association

Member, California Lawyers Association – Public Law and Real Property Sections

Member, New Mexico Municipal League – Attorneys Section

Martindale ISLN: 919263404

California Contractors State License Board: License C7-433113 Class C7 – Low voltage systems Member, National Association of Telecommunications Officers and Advisors

Founding member and former Board of Directors member (also former President) of SCAN NATOA: States of California and Nevada Chapter of NATOA (SCANNATOA.ORG

Senior Member, Society of Cable Telecommunications Engineers (U.S. Society). SCTE Member since 1979; Elected to Senior Member status April 1993; Elevated to Senior Member – Emeritus in November 2019.

Senior Member, Society of Broadcast Engineers; member since 2008, elected to Senior status 2014.

Member, SCTE (U.S.) Professional Development Committee (2008-2009).

Member, SCTE (U.S.) Loyal Order of the 704 (Membership limited to those with 30 years or more in broadband engineering field)

Fellow of Society of Cable Telecommunication Engineers (United Kingdom society; elected 2001) (FSCTE designation)

Certified Broadcast Technologist (CBT designation) awarded by the Society of Broadcast Engineers

Life member of the American Radio Relay League (ARRL)

No, you silly goose, Jonathan and the firm do NOT work for wireless providers or cable operators.  Okay?  Duh.

Missouri Gov. Jay Nixon Signs Wireless Siting Degreg Bill (HB 331) into Law

Missouri local government and their residents will now be largely silenced as to the placement of wireless towers in communities.

Missouri Coat of Arms
Missouri Coat of Arms

Yesterday, Gov. Jay Nixon signed HB 331, including its “UNIFORM WIRELESS COMMUNICATIONS INFRASTRUCTURE DEPLOYMENT ACT” provisions.

HB 331 was lauded by the wireless  industry and strongly opposed by the Missouri Municipal League and many local governments.

Gov. Nixon’s office released a very brief statement on Friday saying that HB 331 and HB  345 together  “will provide the opportunity for expanded access and improved broadband and wireless service through more rapid deployment” of wireless and wired infrastructure.”

The Missouri Municipal League urged Gov. Nixon to veto HB 331, as did the  Missouri Association of Counties.

According to published reports, the Missouri Telecommunications Industry Association said the bill will “allow the industry to improve service more quickly and standardize a sometimes slow and plodding approval process.”

As summarized by the state legislature, the UNIFORM WIRELESS COMMUNICATIONS INFRASTRUCTURE DEPLOYMENT ACT will have the following effects:

UNIFORM WIRELESS COMMUNICATIONS INFRASTRUCTURE DEPLOYMENT ACT

The bill establishes the Uniform Wireless Communications
Infrastructure Deployment Act to encourage and streamline the
deployment of broadband facilities and to help ensure that robust
wireless communication services are available throughout Missouri.
The bill:
(1) Prohibits an authority as specified in the bill with
jurisdiction over wireless communications infrastructure from
taking specified actions that could result in a non-uniform market
for wireless service in Missouri. The prohibition does not include
state courts having jurisdiction over land use, planning, or zoning
decisions made by an authority. The prohibitions include:

(a) Requiring an applicant to submit information about or evaluate
an applicant’s business decisions with respect to its designed
service, customer demand for service, or quality of its service to
or from a particular area or site;

(b) Evaluating an application based on the availability of other
potential locations for the placement of wireless support
structures or wireless facilities including, without limitation,
the option to add wireless infrastructure to existing facilities
instead of constructing a new wireless support structure or for
substantial modifications of a support structure or vice versa;

(c) Dictating the type of wireless facilities, infrastructure, or
technology to be used by the applicant by requiring an applicant to
construct a distributed antenna system in lieu of constructing a
new wireless support structure;

(d) Requiring the removal of existing wireless support structures
or wireless facilities, wherever located, as a condition for
approval of an application;

(e) Imposing environmental testing, sampling, or monitoring
requirements or other compliance measures for radio frequency
emissions on wireless facilities that are categorically excluded
under the Federal Communications Commission’s rules for radio
frequency emissions under 47 CFR 1.1307(b)(1) or other applicable
federal law;

(f) Establishing or enforcing regulations or procedures for RF
signal strength or the adequacy of service quality;

(g) Rejecting an application in conformance with 47 U.S.C. Section
332(c)(7)(b)(4), in whole or in part, based on perceived or alleged
environmental effects of radio frequency emissions;

(h) Imposing any restrictions with respect to objects in navigable
airspace that are greater than or in conflict with the restrictions
imposed by the Federal Aviation Administration;

(i) Prohibiting the placement of emergency power systems that
comply with federal and state environmental requirements;

(j) Charging an application fee, consulting fee, or other fee
associated with the submission, review, processing, and approval of
an application that is not required for similar types of commercial
development within the authority’s jurisdiction. Fees imposed by
an authority for or directly by a third-party entity providing
review or technical consultation to the authority must be based on
actual, direct, and reasonable administrative costs incurred for
the review, processing, and approval of an application. In no case
should total charges and fees exceed $500 for a collocation
application or $1,500 for an application for a new wireless support
structure or for a substantial modification of a wireless support
structure. An entity with jurisdiction or any third-party entity
cannot include within its charges any travel expenses incurred in a
third-party’s review of an application, and in no event can an
applicant be required to pay or reimburse an authority for
consultation or other third-party fees based on a contingency or
result-based arrangement;

(k) Imposing surety requirements, including bonds, escrow
deposits, letters of credit, or any other type of financial surety,
to ensure that abandoned or unused facilities can be removed unless
the authority imposes similar requirements on other permits for
other types of commercial development or land uses;

(l) Conditioning the approval of an application on the applicant’s
agreement to provide space on or near the wireless support
structure for authority or local governmental services at less than
the market rate for space or to provide other services via the
structure or facilities at less than the market rate for the
services;

(m) Limiting the duration of the approval of an application;

(n) Discriminating or creating a preference on the basis of the
ownership, including ownership by the authority, of any property,
structure, or tower when establishing rules or procedures for
siting wireless facilities or for evaluating applications;

(o) Imposing any requirements or obligations regarding the
presentation or appearance of facilities including, but not limited
to, those relating to the kind or type of materials used and those
relating to arranging, screening, or landscaping of facilities if
the requirements are unreasonable;

(p) Imposing any requirements that an applicant purchase,
subscribe to, use, or employ facilities, networks, or services
owned, provided, or operated by an authority, in whole or in part,
or by any entity in which an authority has a competitive, economic,
financial, governance, or other interest;

(q) Conditioning the approval of an application on, or otherwise
requiring, the applicant’s agreement to indemnify or insure the
authority in connection with the authority’s exercise of its police
power-based regulations; or

(r) Conditioning or requiring the approval of an application based
on the applicant’s agreement to permit any wireless facilities
provided or operated, in whole or in part, by an authority or by
any entity in which an authority has a competitive, economic,
financial, governance, or other interest, to be placed at or
connected to the applicant’s wireless support structure;

(2) Allows authorities to continue to exercise zoning, land use,
planning, and permitting authority within their territorial
boundaries with regard to the siting of new wireless support
structures, requirements, and with regard to applications for
substantial modifications of wireless support structures. The
authority must review, within 120 days of receiving an application
to construct a new wireless support structure or within the
additional time as may be mutually agreed to by an applicant and an
authority, the application as to its conformity with applicable
local zoning regulations and advise the applicant in writing of its
final decision to approve or disapprove the application.
Applications will include a copy of a lease or other agreement from
the property owner evidencing a right to pursue the application.
The authority must, within 120 days of receiving an application for
a substantial modification of wireless support structures, review
the application as to its conformity with applicable local zoning
regulations and advise the applicant in writing of its final
decision to approve or deny the application. Procedures for
extending these deadlines and fixing deficiencies are also
specified in the bill. A party aggrieved by the final action of an
authority or its inaction may bring an action for review in any
court of competent jurisdiction;

(3) Requires an application for additions to or replacement of
wireless facilities to be reviewed for compliance with applicable
building permit requirements. Applications will include a copy of
a lease or letter or agreement from the property owner evidencing
the applicant’s right to pursue the application. The authority
must, within 90 days, review the application as to its conformity
with applicable building permit requirements and consistency with
the provisions of the act and advise the applicant in writing of
its final decision to approve or deny the application. However,
procedures for expediting or extending the deadline and for fixing
deficiencies are also specified in the bill. With regard to
collocation applications the overall deadline is 45 days with
procedures for notification and remedy of deficiencies specified in
the bill;

(4) Specifies that the provisions of the bill do not authorize an
authority, except when acting solely in its capacity as a utility,
to mandate, require, or regulate the placement, modification, or
attachments of any new wireless facility on new, existing, or
replacement poles owned or operated by a utility or expand the
power of an authority to regulate any utility;

(5) Prohibits an authority from instituting a moratorium on the
permitting, construction, or issuance of approval of new wireless
support structures, substantial modifications of wireless support
structures, or attachments to existing facilities of wireless
communication infrastructure if the moratorium exceeds six months
and if no good cause is shown. A moratorium must not affect
pending applications;

(6) Prohibits an authority from charging a wireless service
provider or wireless infrastructure provider any rental, license,
or other fee to locate a wireless support structure on an
authority’s property in excess of the current market rates for
rental or use of similarly situated property. An authority may not
offer a lease or contract to use public lands to locate a wireless
support structure on an authority’s property that is less than 15
years in duration. A process for the resolution of any disputes
over fair market value lease payments using appraisers appointed by
both parties is also specified in the bill; and

(7) Prohibits applicants for wireless facility permits from having
the power of eminent domain or the right to compel any private or
public property owner, the Department of Conservation, or the
Department of Natural Resources to lease or sell property or locate
wireless facilities on existing structures.

Here is a link to the full text of the Bill:  CLICK HERE.

I know of no other enacted legislation so far reaching to exclude local participation in the wireless siting process.

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Sprint to Dish and Clearwire: Your Marriage is Not Gonna Happen

Perhaps the new corporate logo? (Yeah, this is a parody.)
Perhaps the new corporate logo?  Not if Sprint has its way in court.  (Yeah, this logo is my parody.)

Sprint today filed suit in the Court of Chancery in Delaware to block the sale of Clearwire to to Dish Network.  The 45-page verified complaint aims to not only stop the sale, but to ding Dish for tortious interference with Sprint’s rights under its merger agreement with Clearwire.

Most telling in the complaint is Sprint’s assertion that “DISH wants spectrum.” (para. 3.)   How very true of both suitors.

Sprint’s complaint is summarized in the press release below.

Below the press release is the “Nature of the Action” section of the complaint. Below that is a link to the 45-page complaint.

As of the initial posting of this message, neither Dish nor Clearwire has yet released any public comments on Sprint’s complaint.  I’m sure Dish’s reply will be most entertaining.

June 17, 2013

Sprint Files Lawsuit Against DISH Network Corporation and Clearwire Corporation Citing the Illegality of the DISH Tender Offer for Clearwire

If Completed, Tender Offer Would Violate Delaware Corporate Law, Sprint’s Bargained-For Rights and the Rights of the Strategic Investors Under the Charter and Equity Holders Agreement

Lawsuit Contends that the Tender Offer is Structurally and Actionably Coercive

OVERLAND PARK, Kan. (BUSINESS WIRE), June 17, 2013 – Sprint (NYSE:S) announced today that it has filed a complaint in the Delaware Court of Chancery against DISH Network Corporation (NASDAQ:DISH) and Clearwire Corporation (NASDAQ: CLWR) asking the Court to prevent the consummation of the DISH tender offer for Clearwire. Sprint believes the transaction violates Delaware law and the rights of both Sprint and Clearwire’s other strategic investors under Clearwire’s charter and under the Equity Holders Agreement (“EHA”). In addition to seeking to enjoin the tender offer, Sprint’s lawsuit seeks to rescind certain parts of the tender offer agreement and seeks declaratory, injunctive, compensatory and other relief.

In its complaint, Sprint outlines why DISH’s tender offer violates the rights of Sprint and other Clearwire stockholders under Clearwire’s governing documents and Delaware law. It also details how DISH has repeatedly attempted to fool Clearwire’s shareholders into believing its proposal was actionable in an effort to acquire Clearwire’s spectrum and to obstruct Sprint’s transaction with Clearwire. Among the points the suit makes:

  • Sprint and the strategic investors invested billions of dollars in cash and assets to form Clearwire. They entered into a shareholders agreement that established their governance rights (the Equity Holders Agreement (EHA)) as to nominating and electing directors, amending the charter and bylaws, issuance of stock, and other governance matters.
  • Under Clearwire’s charter and the EHA, the DISH Tender Offer (together with the Investors Rights Agreement (IRA) and a related Note Purchase Agreement (the “NPA”)), cannot be completed without the approval of holders of at least 75% of Clearwire’s outstanding voting securities, nor without the approval of Comcast Corp., neither of which approvals have been obtained. Completion of the tender offer without such approvals is unlawful.
  • DISH’s Tender Offer, if completed, would violate Delaware corporate law and Sprint’s and the strategic investors rights under the Charter and EHA by vesting DISH with a veto power over fundamental corporate events that Delaware law places in the control of the directors or shareholders and that the EHA details how many directors and shareholders are required for action.
  • The IRA requires Clearwire to place and maintain a number of DISH designees on its board of directors in breach of the provisions in the EHA permitting Sprint to nominate 7 directors, the Significant Investors Group to nominate several other directors, and the nominating committee to nominate the remainder.
  • The IRA violates the Charter by purporting to grant DISH pre-emptive rights that are explicitly prohibited by the Charter.
  • The DISH Tender Offer is unlawfully coercive because it threatens to leave non-tendering shareholders holding shares in a company subject to governance deadlocks or substantial damage awards to DISH if Clearwire is unable to deliver on the unenforceable promises set forth in the IRA and NPA.
  • Sprint is asking for Clearwire’s Charter and the EHA to be enforced by not letting Clearwire sign the IRA or the NPA and by enjoining the tender offer.

Here’s the “Nature of the Action” section of Sprint’s complaint:

1. This action seeks declaratory, injunctive, compensatory and other relief arising from a tender offer launched by DISH for the stock of Clearwire (the “DISH Tender Offer”). The DISH Tender Offer is structurally and actionably coercive and is conditioned upon an agreement with Clearwire that is set to be approved by the Clearwire board of directors (the “Clearwire Board”) that violates and converts the rights of Sprint and other Clearwire stockholders under Clearwire’s governing documents and Delaware law. This action also seeks compensatory relief for DISH’s tortious interference with Clearwire’s performance of its merger agreement with Sprint.

2. Sprint has been a substantial stockholder of Clearwire since its formation in 2008. After lengthy negotiations, on December 17, 2012, Sprint and Clearwire announced a merger agreement whereby Sprint would acquire the outstanding Clearwire stock that it does not already own (the “Sprint Merger Agreement”). Sprint and Clearwire also entered into a financing agreement under which Sprint would provide Clearwire with much-needed financing (the “Interim Financing Agreement”).

3. DISH wants spectrum. Clearwire has spectrum but has struggled financially. Before entering into the Sprint Merger Agreement, Clearwire sought to engage DISH in discussions, but DISH refused to negotiate and did not make a meaningful proposal. After the announcement of the Sprint Merger Agreement, however, DISH feared that by solving Clearwire’s financial problems, a combination of Sprint and Clearwire would eliminate DISH’s negotiating leverage to acquire spectrum on the cheap, so DISH embarked on a plan to tank the merger.

4. Because the Sprint Merger Agreement was conditioned on the approval of a majority of Clearwire’s minority shares, DISH’s strategy focused on fooling Clearwire’s minority stockholders into believing they might obtain a better price from a transaction with DISH. Thus, starting in late December 2012, DISH began making a series of public proposals to make tender offers for a minority position in Clearwire at prices higher than that offered under the Sprint Merger Agreement – in exchange for Clearwire selling DISH key spectrum assets at a bargain price. DISH also insisted that it obtain substantial governance rights from Clearwire. The Clearwire Board rightly recognized that its fiduciary duties did not permit it to sell key assets at a discount in exchange for a tender offer that would benefit only a minority of stockholders, and also rightly recognized that it could not grant DISH the governance rights DISH sought without violating the rights of Sprint and other Clearwire stockholders under Clearwire’s governing documents and Delaware law. So Clearwire repeatedly rejected DISH’s proposals as “not actionable.” DISH appeared to give up on Clearwire and instead turned its attention to making a public proposal to acquire Sprint. Nevertheless, DISH’s repeated public proposals to Clearwire had fooled many Clearwire minority stockholders into believing a higher price might be available from DISH.

5. On May 29, 2013, just two days before Clearwire stockholders were set to vote on Sprint’s proposed merger with Clearwire (the “Sprint-Clearwire Merger”), DISH re-appeared with a publicly announced tender offer at a higher price – the DISH Tender Offer. The DISH Tender Offer was no longer conditioned upon a purchase of spectrum at a bargain price, but was still conditioned upon obtaining governance rights that Clearwire had previously recognized it had no power or right to give. Nevertheless, because DISH is successfully fooling Clearwire’s minority stockholders into voting against the Sprint-Clearwire Merger, leaving Clearwire with no solution to its looming financial crisis, the Clearwire Board panicked and its changed position.

6. Thus, Clearwire reversed course and intends to execute agreements containing the very same governance provisions that it previously recognized it could not legally grant. As described further below, Clearwire is set to enter into an Investor Rights Agreement (the “IRA”) and a Note Purchase Agreement (the “NPA”) with DISH that violate Sprint’s rights under an Equityholders’ Agreement entered into by Sprint, Clearwire and others in 2008 (the “EHA”) and also violate Delaware law and Clearwire’s governing documents – facts previously acknowledged by the Clearwire Board and communicated to DISH.

7. Execution and delivery of the IRA is a condition to the DISH Tender Offer. The IRA purports to grant DISH governance rights, including the purported right to force the Clearwire Board to nominate a slate of directors with guaranteed DISH representation, the purported right to veto amendments to Clearwire’s charter (the “Clearwire Charter”) and bylaws, the purported right to veto any change of control of Clearwire, and purported preemptive rights over any new issuance of Clearwire securities, with certain exceptions. The IRA is invalid and unenforceable because it violates Sprint’s rights under Delaware law and the EHA, which is incorporated into the Clearwire Charter.

8. The NPA is also invalid and unenforceable. Clearwire intends to enter into the NPA in connection with the DISH Tender Offer. The NPA purports to compel Clearwire to issue either exchangeable or non-exchangeable notes, with a structure designed to coerce Sprint to vote to amend the Clearwire Charter. The issuance of exchangeable notes by Clearwire would not be permitted without an amendment to the Clearwire Charter, which could not be accomplished without Sprint’s approval. The nonexchangeable notes (that Clearwire would issue to DISH if Sprint does not approve an amendment to the Clearwire Charter) pay an enormous 12% interest rate, require a commitment fee payable in cash, and carry priority in bankruptcy. Combined with DISH’s other holdings of Clearwire debt, the non-exchangeable notes would give DISH the ability to drive Clearwire into bankruptcy so DISH can take control of Clearwire’s spectrum assets. Thus, not only are Sprint and the other parties to the EHA being deprived of their preemptive rights under the EHA, but Sprint is also being coerced into amending the Clearwire Charter to allow for the issuance of more Clearwire shares in order to avoid the issuance of the non-exchangeable notes.

9. All that is bad enough. But the DISH Tender Offer is also structured to coerce Clearwire’s minority stockholders, to the detriment of Sprint, to tender their stock to DISH or else be left holding stock in a corporation that will be handicapped by unlawful corporate governance restrictions, onerous debt provisions, and potentially be subject to massive money damages claims payable to DISH – an entity which has everything to gain from a failure of Clearwire. Because Sprint owns a majority of Clearwire stock and, as stated, is not a seller, the DISH Tender Offer cannot be followed by a back-end merger with the same consideration and therefore is structurally coercive.

10. As a result, this action seeks equitable relief to prevent consummation of the DISH Tender Offer, and to enjoin or rescind the execution and delivery of the IRA  and the NPA.

11. This action also seeks compensatory and other relief to remedy DISH’s wrongful interference with Sprint’s contractual rights, economic advantage and business relations. DISH intentionally and improperly interfered with the performance of the Sprint Merger Agreement and the Interim Financing Agreement between Clearwire and Sprint, thereby preventing performance, causing performance to be more expensive and burdensome, and ultimately threatening the wrongful termination of the Sprint Merger Agreement.

12. Defendants’ acts already have injured Sprint and Sprint’s rights which will further be irreparably injured without immediate relief from this Court.

Click here to download Sprint’s Complaint.

*     *     *

Separately but related to the Clearwire deal, DISH Network announced earlier today the expiration last Friday of the mandatory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR”) in connection with the tender offer by DISH Acquisition Holding Corporation, a wholly-owned subsidiary of DISH, to purchase all outstanding shares of Class A Common Stock of Clearwire Corporation , including any shares of Class A Common Stock issued in respect of outstanding shares of Class B Common Stock, for $4.40 per share.

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AT&T’s “Uniform Wireless Communications Infrasturcture Act” in Missouri

Missouri Coat of Arms
Missouri Coat of Arms

Salus AT&T suprema lex esto

The latest attempt by the wireless industry, and specifically AT&T, to bypass any rational zoning process, is in Missouri.

House Bill 331,  “[t]o repeal sections 67.1830, 67.1836, 67.1838, 67.1842, 392.415, 392.420, and 392.461, RSMo, and to enact in lieu thereof twenty-two new sections relating to telecommunications” is a massage land grab the likes of which have not been seen elsewhere.

The Bill, which flew through the state legislature and is now sitting on Governor Nixon’s desk, would effective deregulate wireless communications from any effective local review or public participation.

Yesterday (Sunday, June 16), the Kansas City Star newspaper’s editorial urged Governor Nixon to veto the bill, saying “As much as Missouri needs to encourage a robust technology infrastructure, the placement of towers shouldn’t run roughshod over the wishes of communities or property owners. Yet that’s exactly what a bill on Gov. Jay Nixon’s desk enables cellphone service providers to do.” “There is no evidence that cities and counties in Missouri were making it unduly difficult to erect towers. House Bill 331 is simply a proactive move by corporate interests to have their way.”  Read the entire editorial here.

The following is the legislature’s analysis of the bill as sent on to Governor Nixon.

SS HB 331 — UTILITIES

This bill changes the laws regarding infrastructure facilities deployment.

PUBLIC UTILITY RIGHT OF WAY PERMITS

The bill allows public utilities to have permit denials by political subdivisions heard in court if they believe a violation of existing law has occurred. Courts must act in an expedited manner by moving disputes over public right of way under Sections 67.1830 to 67.1848, RSMo, to the front of the docket. If a political subdivision does not act on a permit application within 31 days, then the application will be deemed approved. If a public utility has legally been granted access to a political subdivision’s right of way since August 28, 2001, they are not required to obtain a new permit.

UNIFORM WIRELESS COMMUNICATIONS INFRASTRUCTURE DEPLOYMENT ACT

The bill establishes the Uniform Wireless Communications Infrastructure Deployment Act to encourage and streamline the deployment of broadband facilities and to help ensure that robust wireless communication services are available throughout Missouri. The bill:

(1)    Prohibits an authority as specified in the bill with jurisdiction over wireless communications infrastructure from taking specified actions that could result in a non-uniform market for wireless service in Missouri. The prohibition does not include state courts having jurisdiction over land use, planning, or zoning decisions made by an authority. The prohibitions include:

(a)    Requiring an applicant to submit information about or evaluate an applicant’s business decisions with respect to its designed service, customer demand for service, or quality of its service to or from a particular area or site;

(b)    Evaluating an application based on the availability of other potential locations for the placement of wireless support structures or wireless facilities including, without limitation, the option to add wireless infrastructure to existing facilities instead of constructing a new wireless support structure or for substantial modifications of a support structure or vice versa;

(c)    Dictating the type of wireless facilities, infrastructure, or technology to be used by the applicant by requiring an applicant to construct a distributed antenna system in lieu of constructing a new wireless support structure;

(d)    Requiring the removal of existing wireless support structures or wireless facilities, wherever located, as a condition for approval of an application;

(e)    Imposing environmental testing, sampling, or monitoring requirements or other compliance measures for radio frequency emissions on wireless facilities that are categorically excluded under the Federal Communications Commission’s rules for radio frequency emissions under 47 CFR 1.1307(b)(1) or other applicable federal law;

(f)    Establishing or enforcing regulations or procedures for RF signal strength or the adequacy of service quality;

(g)    Rejecting an application in conformance with 47 U.S.C. Section 332(c)(7)(b)(4), in whole or in part, based on perceived or alleged environmental effects of radio frequency emissions;

(h)    Imposing any restrictions with respect to objects in navigable airspace that are greater than or in conflict with the restrictions imposed by the Federal Aviation Administration;

(i)    Prohibiting the placement of emergency power systems that comply with federal and state environmental requirements;

(j)    Charging an application fee, consulting fee, or other fee associated with the submission, review, processing, and approval of an application that is not required for similar types of commercial development within the authority’s jurisdiction.   Fees imposed by an authority for or directly by a third-party entity providing review or technical consultation to the authority must be based on actual, direct, and reasonable administrative costs incurred for the review, processing, and approval of an application. In no case should total charges and fees exceed $500 for a collocation application or $1,500 for an application for a new wireless support structure or for a substantial modification of a wireless support structure. An entity with jurisdiction or any third-party entity cannot include within its charges any travel expenses incurred in a third-party’s review of an application, and in no event can an applicant be required to pay or reimburse an authority for consultation or other third-party fees based on a contingency or result-based arrangement;

(k)    Imposing surety requirements, including bonds, escrow

deposits, letters of credit, or any other type of financial surety, to ensure that abandoned or unused facilities can be removed unless the authority imposes similar requirements on other permits for other types of commercial development or land uses;

(l)    Conditioning the approval of an application on the applicant’s agreement to provide space on or near the wireless support structure for authority or local governmental services at less than the market rate for space or to provide other services via the structure or facilities at less than the market rate for the services;

(m)    Limiting the duration of the approval of an application;

(n)    Discriminating or creating a preference on the basis of the ownership, including ownership by the authority, of any property, structure, or tower when establishing rules or procedures for siting wireless facilities or for evaluating applications;

(o)    Imposing any requirements or obligations regarding the presentation or appearance of facilities including, but not limited to, those relating to the kind or type of materials used and those relating to arranging, screening, or landscaping of facilities if the requirements are unreasonable;

(p)    Imposing any requirements that an applicant purchase, subscribe to, use, or employ facilities, networks, or services owned, provided, or operated by an authority, in whole or in part, or by any entity in which an authority has a competitive, economic, financial, governance, or other interest;

(q)    Conditioning the approval of an application on, or otherwise requiring, the applicant’s agreement to indemnify or insure the authority in connection with the authority’s exercise of its police power-based regulations; or

(r)    Conditioning or requiring the approval of an application based on the applicant’s agreement to permit any wireless facilities provided or operated, in whole or in part, by an authority or by any entity in which an authority has a competitive, economic, financial, governance, or other interest, to be placed at or connected to the applicant’s wireless support structure;

(2)    Allows authorities to continue to exercise zoning, land use, planning, and permitting authority within their territorial boundaries with regard to the siting of new wireless support structures, requirements, and with regard to applications for substantial modifications of wireless support structures.  The authority must review, within 120 days of receiving an application to construct a new wireless support structure or within the additional time as may be mutually agreed to by an applicant and an authority, the application as to its conformity with applicable local zoning regulations and advise the applicant in writing of its final decision to approve or disapprove the application. Applications will include a copy of a lease or other agreement from the property owner evidencing a right to pursue the application. The authority must, within 120 days of receiving an application for a substantial modification of wireless support structures, review the application as to its conformity with applicable local zoning regulations and advise the applicant in writing of its final decision to approve or deny the application. Procedures for extending these deadlines and fixing deficiencies are also specified in the bill. A party aggrieved by the final action of an authority or its inaction may bring an action for review in any court of competent jurisdiction;

(3)    Requires an application for additions to or replacement of wireless facilities to be reviewed for compliance with applicable building permit requirements. Applications will include a copy of a lease or letter or agreement from the property owner evidencing the applicant’s right to pursue the application.   The authority must, within 90 days, review the application as to its conformity with applicable building permit requirements and consistency with the provisions of the act and advise the applicant in writing of its final decision to approve or deny the application.   However, procedures for expediting or extending the deadline and for fixing deficiencies are also specified in the bill. With regard to collocation applications the overall deadline is 45 days with procedures for notification and remedy of deficiencies specified in the bill;

(4)    Specifies that the provisions of the bill do not authorize an authority, except when acting solely in its capacity as a utility, to mandate, require, or regulate the placement, modification, or attachments of any new wireless facility on new, existing, or replacement poles owned or operated by a utility or expand the power of an authority to regulate any utility;

(5)    Prohibits an authority from instituting a moratorium on the permitting, construction, or issuance of approval of new wireless support structures, substantial modifications of wireless support structures, or attachments to existing facilities of wireless communication infrastructure if the moratorium exceeds six months and if no good cause is shown. A moratorium must not affect pending applications;

(6)    Prohibits an authority from charging a wireless service provider or wireless infrastructure provider any rental, license, or other fee to locate a wireless support structure on an authority’s property in excess of the current market rates for rental or use of similarly situated property. An authority may not offer a lease or contract to use public lands to locate a wireless support structure on an authority’s property that is less than 15 years in duration. A process for the resolution of any disputes over fair market value lease payments using appraisers appointed by both parties is also specified in the bill; and

(7)    Prohibits applicants for wireless facility permits from having the power of eminent domain or the right to compel any private or public property owner, the Department of Conservation, or the Department of Natural Resources to lease or sell property or locate wireless facilities on existing structures.

RAILROAD FACILITY UTILITY CROSSINGS

The bill establishes procedures for utilities regulated by the Missouri Public Service Commission or rural electric cooperatives, municipal utilities, and specified nonprofit electrical corporations in third classification counties, to construct a facility as specified in the bill through a railroad right-of-way.

The bill specifies that a utility must be deemed to have authorization to commence a crossing activity 30 days from the mailing of the notice, completing the engineering specifications, and payment of the fee, absent a claim of special circumstances. The utility may propose an amended crossing proposal if special circumstances exist.     The land management company and the utility must maintain and repair its own property within the railroad right-of-way and bear responsibility for its own acts and omissions, except that the utility must be responsible for any bodily injury or property damage that typically would be covered under a standard railroad protective liability insurance policy.  A utility must have immediate access to a crossing for repair and maintenance of existing facilities in case of emergency. Applicable engineering standards must be complied with for utility facilities crossing railroad rights-of-way.    The engineering specifications must address the applicable clearance requirements as established by the National Electrical Safety Code and the American Railway Engineering and Maintenance of Way Association.

Unless otherwise agreed by the parties and subject to Section 389.588, a utility that locates its facilities within the railroad right-of-way for a crossing, other than a crossing along a state highway, must pay the land management company a one-time standard crossing fee of $1500 for each crossing plus the costs associated with modifications to existing insurance contracts of the land management company. The standard crossing fee must be in lieu of any license, permit, application, plan review, or any other fees or charges to reimburse the land management company for direct expenses incurred by the land management company as a result of the crossing. The utility must also reimburse the land management company for any actual flagging expenses associated with a crossing in addition to the standard crossing fee.

The provisions of the bill cannot prevent a land management company and a utility from otherwise negotiating the terms and conditions applicable to a crossing or the resolution of any disputes relating to the crossing and cannot impair the authority of a utility to secure crossing rights by easement through the exercise of the power of eminent domain.

If a utility and land management company cannot agree that special circumstances exist regarding a particular crossing, the dispute must be submitted to binding arbitration in accordance with the commercial rules of arbitration in the American Arbitration Association.  However, each party may also pursue relief in a court of proper jurisdiction and the winning side must be awarded attorney fees. If a dispute involves only compensation associated with a crossing, the utility may proceed with the installation of a crossing while the arbitration is pending.

The bill does not modify any power of condemnation or grant the exercise of eminent domain power to any entity.

The provisions of the bill apply to a crossing commenced prior to August 28, 2013, if an agreement concerning the crossing has expired or is terminated and to a crossing commenced on or after August 28, 2013.

EMERGENCY INFORMATION REQUESTS

The bill provides immunity from suit for providers of communication related services for providing information to law enforcement officials or agencies under Section 392.415.

PRICE CAP WAIVERS

The bill allows specified telecommunications companies that are currently regulated by the Missouri Public Service Commission and have maximum price caps to seek a waiver from the commission for the price cap regulations in the same manner waivers are currently granted for other rules and regulations.

MISCELLANEOUS TELECOMMUNICATION PROVISIONS

The bill also makes the following changes to telecommunication regulations:

(1)    Allows a telecommunications company to include any, all, or none of its rates for any, all, or none of its retail services in a tariff filed with the commission;

(2)    Exempts specified telecommunications companies that hold a state charter or are licensed to do business under Chapter 392 from most rules and regulations relating to the retail services under Chapter 386, except the companies may voluntarily comply with the commission’s orders, rules, or statutes by notifying the commission. Telecommunications companies are still required to collect the universal service fund surcharge; report the intrastate telecommunications service revenues necessary to calculate the commission assessment, universal service fund surcharge, and telecommunications programs under Section 209.255; and comply with the emergency location requirements;

(3)    Exempts broadband and other Internet protocol-enabled services from the regulations under Chapters 386 and 392 except that voice over Internet protocol services must comply with the fees and registration requirements enforced by the commission under Section 392.550;

(4)    Specifies that the commission retains jurisdiction over all matters delegated to it by federal law and the bill does not modify these duties in any way; and

(5)    Allows telecommunications companies to register with the commission and obtain certification using the same process as used for voice over Internet protocol service under Section 392.550.3.

Click here for the full text of HB 331.

If Governor Nixon signs this legislation into lex, the existing Missouri state motto “Salus populi suprema lex esto” should change to “Salus AT&T suprema lex esto”.

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Current Issues in Cell Tower Leases and Lease Buyouts

John Pestle and I will once again be presenting our very popular program, Current Issues in Cell Tower Leases and Lease Buyouts.  If you read through this entire post, you’ll find out how to get 20% off the registration fee!

This live-via-the-web program, presented through Lorman Education Services, will be presented twice in June: First  on June 4, 2013, and second on June 20, 2013.  Both presentations will span from 1:00 pm – 2:30 pm Eastern Time (10:00 a.m. – 11:30 a.m. Pacific Time).  If you live in Arizona or some part of Indiana, you’ll have to figure out the conference time for yourself.

Attorneys will get 1.5 hours of CLE credit (subject to your state Bar rules).  AICP, CC, ENG, and PMI credits may be available, as well.

Now we move on to the presentation description!

The wireless industry has built more than 250,000 cell sites in the United States in the past 20 years. But many more cell sites are needed as i-things, Droids and the like strain existing wireless network capacity. New cell sites and significant modifications to existing cell sites will also be needed to meet the government’s goal of using wireless to increase broadband speeds and coverage. At the same time, ‘tower management’ companies are offering to buy existing cell leases and lease sites for large sums of money.

This live audio conference, supplemented with lots of of written materials, will help level the playing field by providing private and municipal property owners with the expertise of two faculty members highly experienced in cell tower leases and buyouts. This will help property owners who usually are negotiating such leases or buyouts for the first and only time, while the companies have teams of lawyers who work exclusively on such matters.

We will focus on key business issues in wireless site leases, including lease rates, who gets the revenues from additional antennas or carriers being co-located at a site, major rent increases for renewals and avoiding lease terms which can restrict or prevent an owner’s use or development of its own property – – or trigger a mortgage default. An emphasis will be on the industry specific elements and terms of modern cell site leases, as well as why property owners can achieve very large rent increases on the renewal or extension of existing leases. Comparable issues on lease buyouts will be addressed, as well as why buyouts often are not good deals financially. You will be better able to identify and resolve issues that are unique to wireless leases and buyouts, including what municipalities can include in a lease that cannot be included in a government-issued permit, site location and value, lease term and terminations, access requirements, interference regulation and mitigation, design and camouflage, and radio frequency emissions issues.

Learning Objectives:

  1. You will be able to explain the revenues the property owner receives, and discuss the common elements of private wireless site leases on developed and undeveloped land.
  2. You will be able to identify practice pointers, including key concepts, for owners of private property and their attorneys, as well as municipalities and municipal attorneys.
  3. You will be able to discuss the basics of wireless technology and the real property, technical and technology issues that drive a wireless carrier’s siting and leasing process.
  4. You will be able to review insurance and indemnity provisions to protect the property owner.

Agenda

  • Lease Rates, and How Property Owners Can Increase Revenues If Another Provider Adds Its Antenna to the Tower
  • How Rents Can by Greatly Increased at Lease Renewal, and How to Avoid Losing Such Increases
  • Avoiding Lease Terms Which Limit or Prevent the Owner’s Use and Development of Its Property or May Trigger a Mortgage Default
  • Why Leases That Put Antennas on Buildings Are More Complicated Than Leases for Stand-Alone Towers, What Different Lease Terms Are Needed
  • Buyout Offers for Cell Tower Leases and Lease Sites, How to Evaluate Them, Key Legal Considerations
  • Issues Unique to States, Municipalities, Units of Government as Cell Tower Lessors
  • Camouflage Options for Property Owners, to Protect the Value of Their Property
  • Provisions Allowing the Property Owner to Relocate the Tower, If Necessary
  • Backup Power and Generators, Key Issues and Concerns
  • Insurance and Indemnity Provisions to Protect the Property Owner
  • Restrictions on Changes in Who Owns the Tower to Protect the Property Owner
  • Protecting the Owner If the Provider or Buyout Company Goes Bankrupt

Faculty

smallerjwp.photoJohn W. Pestle, Esq., Varnum

  • Chair of the Telecommunications Group at the Varnum LLP law firm
  • For more than 15 years has represented property owners (companies, municipalities, schools, churches, farms, etc.) on cell tower leases, amendments and buyouts
  • Provides model cell tower leases, currently to more than 500 organizations nationwide
  • For more than 25 years has represented clients on cable, telecommunications and other utility matters
  • Represented municipalities on 1996 statute adding cell tower zoning provisions to Federal law, received Member of the Year award from national municipal group for same
  • Represented National League of Cities and other municipal groups opposing Federal Communications Commission limits on local zoning, permitting for cellular and broadcast towers
  • Received Special Award of Merit from the Michigan Municipal League for his work representing municipalities on cable and telecommunications matters
  • Past chair of both the Municipal Lawyers Section of the State Bar of Michigan and the Legal Section of the American Public Power Association
  • Held FCC First Class Radio Telephone license to work on radio, TV and ship radar transmitters
  • Admitted to practice in Michigan and Arizona
  • Graduate, Harvard College, Yale Graduate School and the University of Michigan Law School
  • Can be contacted at 616-336-6000 , ext. 6725, or jwpestle@varnumlaw.com

smallerjlk.imageJonathan L. Kramer, Esq.

  • Heads the Telecom Law Firm, P.C. based in Los Angeles
  • Radio frequency engineer, and an attorney admitted to practice in California and New Mexico
  • Concentrates on law and technology issues of broadband and wireless telecommunications
  • Wireless siting planner and radio frequency engineer, and wireless lecturer for hundreds of local governments throughout the United States for 18 years
  • Testifying expert or trial consultant in wireless cases
  • Published feature articles on wireless tower siting in government and wireless industry journals
  • Co-wrote and edited the FCC’s publication, A Local Government Official’s Guide to Transmitting Antenna RF Emission Safety: Rules, Procedures and Practical Guidance
  • National member of NATOA for more than 20 years and its only twice-honored Member of the Year
  • Fellow member of the Society of Cable Telecommunication Engineers, U.K. Society, and an elected senior member of the Society of Cable Telecommunications Engineers, U.S. Society
  • Licensed by the FCC, holding its highest grade licenses for commercial radiotelephone, radar and marine digital communications, as well as its highest grade amateur radio license, and licensed as a low-voltage communications contractor in California
  • Can be contacted at 310-312-9900 , ext. 121, or Kramer@TelecomLawFirm.com

These Materials are Designed For…

This live audio conference is designed for attorneys, planners, directors of development, project managers, government administrators, council and board members, land use officials, public works and utilities directors, municipal government officials, engineers, architects, surveyors and real estate professionals.

Download the attached brochure for a 20% Discount Code:  FULL BROCHURE IN PDF FORMAT

To register online for the June 4th lecture, click here.

To register online for the June 20th lecture, click here.

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Assembly Bill 162 Wireless Bill Amended – Analysis

Assembly Bill 162, The Wireless Collocation Bill, Amended by its Author –

BILL IS NOW FAR WORSE FOR THE PUBLIC AND LOCAL GOVERNMENTS

[Updated 4/24/13 7:28 p.m. – Added link to PDF version of this analysis.  See link at bottom of this page]

As a reminder, on March 21, 2013, Assembly Bill 162 was dropped into the hopper in Sacramento to impose severe new rules requiring mandatory and lightning fast wireless collocation approvals or defaults by California local governments.  Assembly Member Holden is the Bill’s sponsor.

Yesterday, Assembly Member Holden amended AB 162 to facially address some of the concerns raised by local governments. The proposed changes, however, are largely cosmetic and in most cases legally ineffective as to actually addressing local government concerns, as I will discuss in detail below.  That said, Mr. Holden also took the opportunity to go beyond the cosmetic changes by introducing new language to his Bill that would actually extend the impact of the proposed state legislation far beyond that intended by the federal legislation, Section 6409(a) of the Middle Class Tax Relief Act of 2012.

To view the past and current versions of the bill, visit http://tinyurl.com/wireless162.

Here is my analysis [1] of each of yesterday’s amendments to AB 162:

1. Added a new section readjusting the numbering of the subsequent sections. The new Section 1 provides a legislative purpose and intent for the Bill:

SECTION 1. The Legislature hereby finds and declares all of the following:

(a) Nearly one in every three Californians communicates only via a cellular device and does not own or operate a landline telephone.

(b) Of the 240,000,000 calls to telephone number 911 for emergency assistance placed nationwide each year, 70 percent now originate from cellular devices.

(c) In 2010, 5 percent of all 911 calls originating from cellular devices were dropped, resulting in 8,400,000 dropped 911 calls.

(d) Recognizing the public’s shift toward cellular telephone use, the Legislature passed Senate Bill 1375 (Chapter 332 of the Statutes of 2010), authorizing telephone corporations to deactivate 911 emergency service from any landline telephone not subscribing to paid telephone service.

(e) Given the increased reliance on cellular phones, maintaining signal strength and call reliability for 911 calls from cellular telephones is critical to protecting public safety and saving lives of Californians.

(f) The Final Report of the National Commission on Terrorist Attacks Upon the United States (known as the 9/11 Commission Report) identified the lack of coordination among first responder agencies and communication challenges in the 9/11 attacks and emphasized the need for uniform and reliable communications for all first responders.

(g) The federal Middle Class Tax Relief and Job Creation Act of 2012 (Public Law 112-96) creates a framework for the public sector to partner with commercial providers to leverage the private sector’s investments in broadband technologies to efficiently deploy an interoperable broadband network for public safety.

(h) The federal Middle Class Tax Relief and Job Creation Act of 2012 (Public Law 112-96) allocated seven billion dollars ($7,000,000,000) for grants to states to build the nationwide public safety broadband network.

(i) The Federal Communications Commission has found that delays by local governments in approving ministerial requests have delayed the implementation of next-generation broadband services for consumers and first responders.

(j) It is the intent of the Legislature to increase network capacity on existing wireless structures in order to serve the needs of safety personnel and the people of the state.

AB 162 now seems to also benefit public safety services, but as will be discussed below, the benefit is illusory.

2. Section 2(a) of the bill has been amended to read,

Notwithstanding any other law, and pursuant to Section 6409 of the federal Middle Class Tax Relief and Job Creation Act of 2012 (47 U.S.C. Sec. 1455), a local government shall approve and may shall not deny any eligible facilities request for a modification of an existing wireless telecommunications facility or structure that does not substantially change the physical dimensions of the wireless telecommunications facility or structure.

The bolded changes now make this section inconsistent with Section 1455(a) by replacing “may” with “shall,” but far more importantly, the addition of “or structure” extends the definition of a wireless telecommunications facility to include the structure below the base station and/or antenna.

Why is the reference to ‘structures’ so important to the wireless industry? Because by adding “or structure” the overall height of an existing office building with wireless antennas on the roof must now be counted towards the 10% increase permitted for the wireless site.  Say that there is a 10 foot tall antenna enclosure on the roof of a 15 story building (call the building 150 feet tall). Under the prior language of AB 162, the height of the antenna enclosure could increase by 10 percent, or only 1 foot.  By including the “or structure” language, the non-discretionary increase in height would be 16 feet (10% of the 150 foot building plus the 10 foot tall antenna enclosure above the roof).

3. Section 2(b) is amended to read:

The failure to act on an eligible facilities request within 45 90 days of receipt of a request shall be deemed an approval of the request. The 45 90 days shall be tolled if the request is determined to be incomplete. If the request is determined to be incomplete, the local government shall comply with subdivision (c) of Section 65943 of the Government Code.

4. Section 2(d)(1) is added to the definitions:

(1) “Collocation” means the mounting of the wireless telecommunications facility and related equipment on an existing tower, building, or structure for the purpose of transmitting or receiving signals for telecommunications or public safety services.

The new definition above extends the reach of collocation to include buildings and structures, with the negative impact already described.  However, this definition goes far beyond the prior poorly crafted language to extend AB 162’s reach to all “telecommunications or public safety services.”

Neither “telecommunications” or “public safety services” are defined in AB 162, but would arguably extend AB 162’s collocation provisions and benefits to any type of radio communications (telecommunications) including without limitation AM/FM/TV stations, commercial two-way radios, point-to-point microwave, WI-FI, amateur radio, radar, CB radio, etc.

5. Section 2(d)(2) of the definitions now reads:

“Public safety broadband communications system” means any regional interoperable communications system, the nationwide public safety broadband network, the first responder analog-D block, or any other government-operated communications system used by first responders or emergency management systems.

Given that the Section 2(d)(2)(D), just discussed, has no real new value to local governments, Section 3 merely acts as a limitation on—rather than an extension of—local government authority.  General government radio communications, such as between permit inspectors and the permit department, or between any non-emergency personnel are excluded by the limiting language in Section 3.

6. Section 4(A) and 4(C), defining “Substantially change” are amended to read:

(A) The mounting of the proposed antenna on the wireless telecommunications facility or structure would increase the existing height of the wireless telecommunications facility by more than 10 percent, or by the height of one additional antenna array with separation from the nearest existing antenna not to exceed 20 feet, whichever is greater, except that the mounting of the proposed antenna may exceed the size limits set forth in this subparagraph if necessary to avoid interference with existing antennas.

(C) The mounting of the proposed antenna would involve adding an appurtenance to the body of the wireless telecommunications facility or structure that would protrude from the edge of the wireless telecommunications facility more than 20 feet, or more than the width of the wireless telecommunications facility at the level of the appurtenance, whichever is greater, except that the mounting of the proposed antenna may exceed the size limits set forth in this subparagraph if necessary to shelter the antenna from inclement weather or to connect the antenna to the wireless telecommunications facility via cable.

As before, the addition of “or structure” in (A) and (C) operationalize the expansion of AB 162’s height benefit for wireless carriers by including the height of an underlying structure or building into the calculation of the permitted 10% increase.   Interestingly, by adding “or structure” to (C), antennas will now be permitted to extend horizontally from the roof and perhaps as far as to violate setbacks and even property lines.

Section 4(D)’s former language is struck and replaced as shown below:

(D) The mounting of the proposed antenna would involve excavation outside the current wireless telecommunications facility site, defined as the current boundaries of the leased or owned property surrounding the wireless telecommunications facility and any access or utility easements currently related to the site.

 (D) The eligible facility request fails to comply with all existing aesthetic requirements imposed by a local government for the specific facility subject to the request. Nothing in this section shall be construed to require that any new aesthetic enhancements to be made to an eligible facility that were not existing requirements at the time the eligible facility request was made.

The deletion of the former (D) language now means that any excavation outside the current wireless telecommunications facility site, defined as the current boundaries of the leased or owned property surrounding the wireless telecommunications facility and any access or utility easements currently related to the site, would not constitute a substantial change to the existing site thereby pulling a collocation project out of the scope of AB 162’s mandatory approval requirement.  Accordingly, if an excavation outside the current wireless telecommunications facility site is proposed as part of a collocation—even if the excavation extends to another property—a local government would be barred from denying the otherwise qualifying project.  This new language is a backdoor way of adding new utility routes to the mandatory approval requirement of AB 162.

Turning now to the replacement (D) language, it says in essence that a collocation is not one that “fails to comply with all existing aesthetic requirements imposed by a local government for the specific facility subject to the request.”

Translated into English, the language just discussed appears to say that if a current site that was required by its original approval to be camouflaged is not, in fact, constructed to meet the aesthetic requirements set out in the original permit, then the site is not subject to AB 162.

On its face, the new (D) language would be a good provision for the public were it not for the fact that this new language is completely preempted by 47 U.S.C. 1455(a), the federal law.

Recall that AB 162 will be subject to the sweeping preemption of Section 1455(a), which begins by saying “Notwithstanding section 704 of the Telecommunications Act of 1996 (Public Law 104–104) or any other provision of law…” (emphasis added).  As the federal law would clearly preempt any non-compliant provision in state law, a wireless applicant would likely successfully argue that AB 162 notwithstanding, it has a preemptive federal right to modify a site taking it from camouflaged to bare steel, if the carrier so elects, and therefore AB 162’s aesthetic protection language is without legal effect.  The choice would be with the applicant as to whether it wishes to comply with this provision of AB 162, not that it must comply with this provision.  Should the applicant so choose to avoid this provision of AB 162, it would be as if the new proposed (D) language was not even a part of AB 162.

To make the industry’s benefit clear by the camouflage provision in (D), even if the proposed (D) language were legally enforceable (or if an applicant elected not assert its federal rights preempting this portion of AB 162), any addition to an existing camouflaged site could not be required by a local government to be camouflaged.

To understand the scope and size of this massive loophole in the amendment to AB 162, consider the following before photograph and after-simulation of an existing wireless site in Los Angeles.  The simulated modification would be subject to a mandatory approval under AB 162 without the ability of a local government to condition the addition to be camouflaged:

 

Caption
Photo/Photo Simulation by Jonathan Kramer

The net result of the new (D) language is that the camouflage benefit of the existing project (the before photo above) would be destroyed by AB 162 as currently amended.

Conclusions and Recommendations

AB 162 as proposed in March was a massive attack on local government authority to control wireless siting.  As now amended in April, it is truly a wolf-in-sheep’s-clothing.  The Bill now appears to provide benefits to local governments and the public, yet each of those benefits is either without value, or illusory.  The wolf part is the inclusion of the “structure” element far-and-away exceeding the scope of the existing federal law.

This Bill, as now amended, is also far worse than the federal law, 47 U.S.C. § 1455(a), in the new privileges it would grant.

Ultimately, AB 162 is fatally flawed, inconsistent with federal law, and cannot be saved by amendments.  It should be vigorously opposed by local governments and their constituents who are interested in remaining engaged in wireless siting matters in California.

Please feel free to share this analysis with interested local government parties and the public at large.

Continuing updates regarding AB 162 will be available at here at http://CellTowerSites.com.  For now, and especially now, I continue to call this legislation the WIPE ACT (the Wireless Industry Public Exclusion Act).

Finally, please download a PDF of the bulk of this message and share it with your friends and elected officials:  Please  CLICK HERE.
Jonathan


[1] Note: The opinions contained in this communication are solely those of Jonathan L. Kramer, Esq., and do not necessarily reflect those of any client or friend of this firm.  I’m pretty sure they don’t reflect the views of the wireless industry.

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AGL Magazine’s Wireless Infrastructure Conference: Irvine 4/18/13

AGL Magazine LogoAGL Magazine‘s Wireless Infrastructure Conference will be coming to Irvine Marriott in Irvine, California on April 18, 2013. If you want to know about what’s happening in the trenches of wireless, and where those trenches lead, this is the conference to attend.

AGL’s regional conferences are, in my opinion, one of the best sources of current industry information, and one of the most cost effective. This is the conference I would attend even if I were not a speaker. But as you’ve just figured out, I’ll be a speaker at this conference. I’ll be speaking about Assembly Bill 162, more properly called the “Wireless Industry Gift and Public Exclusion Act of 2013.”

The registration fee is only $95.00, and there is a substantially lower registration fee for government registrants.  Ask me for the government discount code; I’ll be glad to provide it.

Here is the current conference schedule (subject to change):

8:00 a.m. to 9:00 a.m. Networking Continental Breakfast Welcome: Rich Biby
9:00 a.m to 10:00 a.m. Site Acquisition: Where Will All the Wireless Go?You have all heard the statistics on wireless growth, but where will all these antennas and nodes be located? This session will teach you how to meet the zoning challenges and take advantage of the opportunities in innovative antenna siting. Stay on top of the trends in siting macrocells, microcells and DAS, whether it is a greenfield development or on rooftops or on street furniture. Our panel of experts will fill you in on the best practices in siting on federal properties, churches and schools.
10:00 a.m. to 10:55 a.m. Wireless Business Trends Roundtable This session will scrutinize the business side of the wireless industry, from tower brokerage to Wall Street to carrier class Wi-Fi. Stay up to date on the critical factors that have an impact on our industry, whether it is the latest mergers, cash infusions or LTE deployment news. You will learn where the opportunities are to increase your profits, whether you own towers or integrate wireless systems.
11:00 p.m. to 12:00 p.m. LTE and the Art of Achieving and Maintaining Tower Integrity With LTE systems rolling out at a furious pace, can proper equipment installations keep up? This session will teach you a wide range of best practices for deploying equipment on towers and keeping them in working order. Plus, keys for keeping tower climbers safe.
12:00 p.m. to 1:00 p.m. Lunch
1:00 p.m.to 2:00 p.m. Small Cell, DAS, Wi-Fi – the New Wireless Frontier While it goes by different names – metrocell, picocell, microcell, DAS node and carrier-grade Wi-Fi – the result is the same, increased capacity and coverage enhancement. You will learn the latest technology trends in the deployment of multiple, smaller coverage area nodes. Additionally, you will learn the market drivers. All of which are critical to playing in this quickly evolving space.
2:00 p.m. to 4:00 p.m. Small-cell Vertical Market Breakout Sessions: You will be able to take advantage of being a part of a small group, which will engage in a deeper discussion of the various wireless vertical markets. Speakers dealing with four verticals in small-cell wireless –– health care, campus/stadium, commercial real estate and municipal Wi-Fi –– will move from group to group every 30 minutes, answering questions and giving opinions on the opportunities and challenges each vertical represents. Using this more intimate setting, this session gives you time to talk with our experts about your particular interests in the topics and to share ideas with others.Vertical 1:  Tracking the Heartbeat of Wireless in the HospitalModerator will lead a discussion on the role of wireless in today’s health care organizations. Hospitals offer possibilities for numerous wireless applications, and hospitals represent one of the most complex environments in which to introduce new technologies.Vertical 2:  From the Campus to the Stadium, Wireless Goes Small Bringing smaller cells – whether DAS, Wi-Fi or small cell – to campuses and stadiums is a challenging, high-profile venture.  Moderator will lead a discussion of this unusual mix of outdoor and indoor deployments that must be geared for large influxes of users who are there only for short periods.

Vertical 3:  Municipal Wi-Fi –– The Key to the Intelligent City? Municipalities can be an integral part of the wireless superhighway and if they embrace that role, they will improve their cities on multiple fronts, including revenue and business development. Moderator will explain two critical components –– wireless infrastructure and fiber backhaul –– that cities must have to stay current with mobile technology development.

Vertical 4:  Commercial Real Estate — Connections Trump Locations. In-building wireless networks have elevated the provisioning of wireless communications from an afterthought to the status of an intelligent amenity for commercial real estate development. Corporate site selection committees now list broadband connectivity among the top three criteria. Learn how wireless is helping real-estate developers gain new tenants and increase revenue by marketing their properties to smartphone users.

4:00 p.m. to 4:45 p.m. Conference Wrap up Moderator: Richard P. Biby, P.E., Publisher, AGL magazine

Following is a link to the online registration site…If you’re a government, call me first for the discount code: CLICK HERE TO REGISTER.

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Urgent: California 6409(a)/Shot Clock Law Floated in Sacramento

California Assembly Bill 162California Assembly Bill 162

[Updated March 28, 2013]
[Updated March 24, 2013]
[Updated March 23, 2013]
[Original March 22, 2013]

[Update/Heads-Up: I’ve received a copy of Assembly Member Holden’s Fact Sheet on AB 162, which has been christened the “Broadband Expansion Act.” I’ve rechristened it the “Wireless Industry Gift and Public Exclusion Act of 2013.” In the next day or two I’ll be posting the Fact Sheet, and my point-by-point analysis, rebuttal and corrections to the Fact Sheet.]

The wireless industry has quietly dropped an awful bill, Assembly Bill 162, into the hopper in Sacramento to impose severe new rules requiring mandatory and lightning fast wireless collocation approvals by California local governments.

Assembly Bill 162 is a combination Super Section 6409(a) coupled with a Super Shot Clock.  To add icing to the wireless industry’s cake, the bill would effectively eliminate any consideration of whether the applicant has a significant gap in its service, and would define its key terms so broadly as to make nearly every component part of a wireless tower or site (including components not now considered to be either).

Well, really, there’s nothing super about this bill if you’re either a concerned citizen or a local government.

Assembly Bill 162, sponsored by Assembly Whip Chris Holden D-41, started as a housing bill in January.  It was gutted yesterday, on March 21, to become an 8-figure gift to the entire wireless industry.

In its now-morphed form, Assembly Bill 162 would add Section 65964.5 to the Government Code to do the following:

1.  Parrot the opening of Sec. 6409(a) of the Middle Class Tax Relief Act of 2012 by saying,

(a) Notwithstanding any other law, and pursuant to Section 6409 of the federal Middle Class Tax Relief and Job Creation Act of 2012 (47 U.S.C. Sec. 1455), a local government shall approve and may not deny any eligible facilities request for a modification of an existing wireless telecommunications facility that does not substantially change the physical dimensions of the wireless telecommunications facility.

2. Then the next section would make the failure of a Local Government to act on such a request within 45 days result in the project being deemed approved. 

(b)The failure to act on an eligible facilities request within 45 days of receipt of a request shall be deemed an approval of the request. The 45 days shall be tolled if the request is determined to be incomplete. If the request is determined to be incomplete, the local government shall comply with subdivision (c) of Section 65943 of the Government Code.

Section (b) would effectively eliminate any possibility of public hearings in advance of mandatory approvals.  The 45 day shot clock would cut in half the time determined by the FCC to be adequate to process collocations.  The effective result would be that wireless collocation projects would take priority over virtually every other project considered by a local government.

Section 65943(c) of the Government Code provides for a formal appeal process for projects deemed incomplete by a local government.   Since this is already state law, it seems redundant here.

3.  Forget about coverage gap proof for collocations.  Subsection (c) of Assembly Bill 162 would kill that:

(c) A local government shall not require proof of gap in coverage as part of the approval of an eligible facilities request.

4.  Next, the proposed legislation goes on to define key terms:

(d) For purposes of this section, the following definitions shall apply:

(1) “Eligible facilities request” or “request” means any request for modification of an existing wireless telecommunications facility that involves any of the following:

(A) Collocation of upgraded transmission equipment.

(B) Removal of transmission equipment.

(C) Replacement of transmission equipment.

(2) “Substantially change” means any of the following:

(A) The mounting of the proposed antenna on the wireless telecommunications facility would increase the existing height of the wireless telecommunications facility by more than 10 percent, or by the height of one additional antenna array with separation from the nearest existing antenna not to exceed 20 feet, whichever is greater, except that the mounting of the proposed antenna may exceed the size limits set forth in this subparagraph if necessary to avoid interference with existing antennas.

(B) The mounting of the proposed antenna would involve the installation of more than the standard number of new equipment cabinets for the technology involved, not to exceed four equipment cabinets, or more than one additional equipment shelter.

(C) The mounting of the proposed antenna would involve adding an appurtenance to the body of the wireless telecommunications facility that would protrude from the edge of the wireless telecommunications facility more than 20 feet, or more than the width of the wireless telecommunications facility at the level of the appurtenance, whichever is greater, except that the mounting of the proposed antenna may exceed the size limits set forth in this subparagraph if necessary to shelter the antenna from inclement weather or to connect the antenna to the wireless telecommunications facility via cable.

(D) The mounting of the proposed antenna would involve excavation outside the current wireless telecommunications facility site, defined as the current boundaries of the leased or owned property surrounding the wireless telecommunications facility and any access or utility easements currently related to the site.

(3) “Wireless telecommunications facility” means equipment and network components, including towers, utility poles, transmitters, base stations, and emergency power systems that are integral to providing wireless telecommunications services.

The definitions in Assembly Bill 162 are so broad as to encompass nearly every portion of a wireless system, including DAS networks.  Moreover, the definitions are in conflict with the plain words of the proposed statue as to what constitutes a substantial change in the physical dimensions of the wireless telecommunications facility.

The definitions (and in part the lack of definitions) would also open the door to the conversion of fully camouflaged sites to morph into ugly monopoles or visible sites.  Moreover, the definitions would allow for the mandatory installation of any type of emergency power system (including diesel powered generators and hydrogen fuel cells) at any cell site.

Assembly Bill 162 is one of the worst bills that would essentially kill public input into wireless siting process for collocations in California.  It would speed up the process to the point where the public would be denied any effective opportunity to have any meaningful review, much less input, on proposed wireless collocations (which seem to be the bulk of wireless projects in California now).

The sponsor of Assembly Bill 162 is one of the most powerful members of the Assembly, and the owner of CHMB Consulting Firm (a real estate consulting firm in Pasadena).  No doubt Mr. Holden’s goal is to promote the rapid deployment of more wireless service in California, but Assembly Bill 162 in its current form is anti-constituent and anti-government.  As it is now set out, the Bill amounts to a massive gift to the wireless industry at the expense of the public and local governments.

Members of the public will need to directly communicate with Assembly Member Holden about Assembly Bill 162, as well as their own local governments and elected representatives, if there is to be any chance to maintain meaningful community and local government involvement in wireless tower collocation siting matters in this state.

To read the original housing bill, now struck, with the replacement wireless industry gift language, click to open the PDF: AB 162 Assembly Bill – AMENDED

Here is a link to the current version of Assembly Bill 162 making its way through the California Legislature: http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=ab_162&sess=CUR&house=B&author=holden

To express your views about Assembly Bill 162 directly to Assembly Member Holden, you can use his web site’s comment form:  https://lcmspubcontact.lc.ca.gov/PublicLCMS/ContactPopup.php?district=AD41

Check back here often to find out what’s happening with Assembly Bill 162.  Share this post with your friends and your local elected officials (who I hope are also your friends).


Thanks to J.D. for his help making this post even better!
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Clearwire: “You’re Such a Dish!”

Now it gets interesting.

200px-Original_Dish_Network_logo.svgAs I previously reported, (Soft)Sprint is trying to buy up the shares of Clearwire not already owned by Sprint.  They offered $2.97 per share.

Enter, now, Dish Network with an unsolicited offer to purchase Clearwire at $3.30 per share.

Needless to say, Sprint’s not too impressed with the Dish offer.

Now it’s up to Clearwire’s “Special Committee” to evaluate the offers (and any other interlopers who happen along) to pick the winner.

Here’s Clearwire’s press release from a couple of hours ago:

January 8, 2013

Clearwire Corporation Provides

Transaction Update

BELLEVUE, Wash., Jan. 8, 2013 (GLOBE NEWSWIRE) — Clearwire (Nasdaq:CLWR) today announced that it has received an unsolicited, non-binding proposal (the “DISH Proposal”) from DISH Network Corporation (“DISH”). The DISH Proposal, as further summarized below, provides for DISH to purchase certain spectrum assets from Clearwire, enter into a commercial agreement with Clearwire, acquire up to all of Clearwire’s common stock for $3.30 per share (subject to minimum ownership of at least 25% and granting of certain governance rights) and provide Clearwire with financing on specified terms.

The DISH Proposal is only a preliminary indication of interest and is subject to numerous, material uncertainties and conditions, including the negotiation of multiple contractual arrangements being requested by DISH (some of which, as currently proposed, may not be permitted under the terms of Clearwire’s current legal and contractual obligations). It is also subject to regulatory approval.

As previously announced on December 17, 2012, Clearwire has entered into a definitive agreement with Sprint Nextel Corporation (“Sprint”) for Sprint to acquire the approximately 50 percent stake in Clearwire it does not already own for $2.97 per share (the “Sprint Agreement”). Clearwire’s ability to enter into strategic transactions is significantly limited by its current contractual arrangements, including the Sprint Agreement and its existing Equityholders’ Agreement.

The Special Committee of the Clearwire Board of Directors (the “Special Committee”) has determined that its fiduciary duties require it to engage with DISH to discuss, negotiate and/or provide information in connection with the DISH Proposal. The Special Committee has not made any determination to change its recommendation of the current Sprint transaction. Consistent with its obligations under the Sprint Agreement, Clearwire has provided Sprint with notice, and the material terms, of the DISH Proposal, and received a response from Sprint that is described below.

DISH had, prior to the announcement of the Sprint Agreement, provided Clearwire with a preliminary indication of interest solely with respect to acquiring certain of Clearwire’s spectrum assets, on substantially the same pricing per MHz-POP as the spectrum purchase included in the DISH Proposal described below, and entering into a commercial agreement. Although Clearwire worked with DISH prior to the execution of the Sprint Agreement to improve the overall terms of that proposal, the Special Committee of the Clearwire Board determined that the Sprint transaction was, for a number of reasons, a more-attractive alternative for Clearwire’s non-Sprint Class A stockholders than a transaction with DISH at that time and on the terms then-proposed by DISH.

Summary of DISH Proposal

The following is a summary of the material terms of the proposal:

  • Spectrum Purchase. DISH would acquire from Clearwire spectrum covering approximately 11.4 billion MHz-POPs (“Spectrum Assets”), representing approximately 24% of Clearwire’s total MHz pops of spectrum, for aggregate net cash proceeds to Clearwire of approximately $2.2 billion (the “Spectrum Purchase Price”). The net cash proceeds are prior to any adjustment for potential tax liabilities which are likely to arise from the sale of spectrum assets even after utilizing the existing net operating losses. At DISH’s option, Clearwire would also sell or lease up to an additional 2 MHz of Clearwire’s spectrum to DISH from a channel that is adjacent to the Spectrum Assets at a price to be calculated in the same manner as the Spectrum Assets.
  • Commercial Agreement. Clearwire would, at DISH’s request, provide certain commercial services to DISH, including the construction, operation, maintenance, and management of a wireless network covering AWS-4 spectrum and new deployments of 2.5 GHz spectrum.
  • Acquisition of Clearwire Shares; Governance. DISH would make an offer to Clearwire’s stockholders to purchase up to all of Clearwire’s outstanding shares at a price of $3.30 per share in cash. This tender offer would not be dependent on Sprint’s participation, but would be subject to a number of conditions, including DISH: (i) acquiring no less than 25% of the fully-diluted shares of Clearwire, (ii) being granted the right to designate Clearwire board members commensurate with its pro forma ownership percentage, (iii) receiving certain minority protections, including the right to approve material changes to Clearwire’s organizational documents, change of control and material transactions with related parties (unless these transactions were approved by an independent committee of the Clearwire board and, if over a certain threshold, supported by a written fairness opinion from a nationally recognized investment bank) and (iv) receiving preemptive rights. In addition, the DISH Proposal would require Clearwire to terminate the note purchase agreement under which Sprint has agreed to provide interim financing to Clearwire and is conditional upon the consummation of the spectrum purchase and Clearwire being in compliance with the commercial agreement (both as described above).
  • Spectrum Purchase Price Funding. DISH would pre-fund the Spectrum Purchase Price within three business days of signing through a senior Unsecured PIK Debenture (the “PIK Debenture”) bearing PIK interest at a rate of 6% per annum in the event the Spectrum Assets are sold to DISH or 12% per annum otherwise. Clearwire would be obligated to either apply the proceeds of the pre-funding to reduce outstanding long-term debt through the redemption or repurchase of the 2015 Senior Secured Notes and 2016 Senior Secured Notes of Clearwire Communications LLC or, in the event that a portion of the Network Build Financing described below is unavailable due to the failure to receive shareholder approval, to use an equivalent portion of the proceeds of the PIK Debenture to fund network build-out costs; in that case, any future make up draws on the Network Build Financing following shareholder approval would be applied to reduce debt as provided in this sentence. If Spectrum Assets are not acquired due to a failure to obtain required regulatory approvals, Clearwire would, within 30 days following termination of the spectrum purchase agreement, repay the PIK Debenture plus interest at 6% per annum. If Clearwire is unable to repay the PIK Debenture during this 30 day period, it would be entitled to convert the principal amount and accrued interest on the PIK Debenture into a note on terms comparable to the 2015 Senior Secured Notes previously repaid, having a maturity of December 1, 2015.
  • Network Build Financing. DISH proposes to provide additional capital to fund a portion of Clearwire’s network build-out through a credit facility for the purchase of exchangeable notes on substantially similar terms to those which Sprint has agreed to provide, subject to cancellation of the Sprint Financing Agreements (as described below).
  • Deal Protections. DISH expects appropriate deal protections, including a 5-day match right, similar to those included in the Sprint Agreement. DISH would match Clearwire’s termination rights as provided for in the Sprint transaction (including the possible forgiveness of a portion of the exchangeable notes upon certain termination events).
  • Sprint Financing. DISH has indicated that the proposal will be withdrawn if Clearwire draws on the financing under the Sprint Financing Agreements.

In connection with the Sprint Agreement, Clearwire and Sprint also entered into agreements that provide up to $800 million of additional financing to Clearwire in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share, subject to adjustment under certain conditions (the “Sprint Financing Agreements”). Under the Sprint Financing Agreements, Sprint has agreed to purchase, at Clearwire’s option, $80 million of exchangeable notes per month for up to 10 months beginning on January 2, 2013. The DISH Proposal indicates that it will be withdrawn if Clearwire draws on the financing under the Sprint Financing Agreements. As a result, in order to allow the Special Committee to evaluate the DISH Proposal, at the direction of the Special Committee, Clearwire has revoked its initial draw notice and has not received the first $80 million under the Sprint Financing Agreements. The Special Committee has not made any determination with respect to any future draws under the Sprint Financing Agreements.

Summary of Sprint Response to DISH Proposal

In response to the DISH Proposal, Clearwire has received a letter from Sprint stating, among other things, that Sprint has reviewed the DISH Proposal and believes that it is illusory, inferior to the Sprint transaction and not viable because it cannot be implemented in light of Clearwire’s current legal and contractual obligations. Sprint has stated that the Sprint Agreement would prohibit Clearwire from entering into agreements for much of the DISH Proposal. The following is a summary of Sprint’s statements in its letter regarding the material terms of the DISH Proposal:

  • Spectrum Purchase. Sprint has stated that, under the Sprint Agreement, Clearwire is prohibited from selling the Spectrum Assets without Sprint’s consent. In addition, Sprint has stated that Clearwire is further subject to various requirements under its commercial agreements with Sprint and the Equityholders’ Agreement applicable to selling Spectrum Assets, even if the Merger Agreement were not in place.
  • Commercial Agreement. Sprint has stated that, under the Merger Agreement, Clearwire is prohibited from entering into the commercial agreement proposed by DISH so long as the Merger Agreement is in place.
  • Acquisition of Clearwire Shares. Sprint has stated that the DISH Proposal may constitute a change of control under the Equityholders’ Agreement, which would require the affirmative vote of 75% of the issued and outstanding shares of Clearwire’s stock. Sprint has stated it would not vote in favor of the proposed transaction with DISH.
  • Governance. Sprint has stated that (i) it would be impermissible under Clearwire’s current Equityholders’ Agreement for Clearwire to agree to nominate DISH’s designees to the Clearwire Board, (ii) it would be impermissible under the Equityholders’ Agreement for Clearwire to create a new independent committee of the Clearwire Board and (iii) under Delaware law, certain governance rights requested by DISH (including the request for proportionate board representation) cannot be granted by Clearwire in a manner that does not require amendment of the certificate of incorporation or consent of Sprint to a shareholder agreement embodying what DISH has requested.
  • Funding.  Among other arguments, Sprint has stated that the complex financing provisions of the DISH Proposal must also be considered in light of the existing Clearwire contractual arrangements (including debt arrangements) and that it is not clear from Sprint’s review that such financing is permitted by or would comply with Clearwire’s existing arrangements. In addition, Sprint has stated that Sprint and the other parties to the Equityholders’ Agreement would have preemptive rights with respect to any issuance of exchangeable notes by Clearwire as contemplated by the DISH Proposal, and any issuance of such notes may also require Clearwire stockholder approval in accordance with the NASDAQ listing requirements.
  • Sprint Financing. Sprint has stated that it is concerned with Clearwire’s failure to consummate the January 2 tranche of funding under the Sprint Financing Agreements, that it does not believe Clearwire’s initial draw notice was revocable and that it has reserved its rights relating thereto.

Process

The Special Committee will, consistent with its fiduciary duties and in consultation with its independent financial and legal advisors, continue to evaluate the DISH Proposal and the letter from Sprint and discuss them with each of DISH and Sprint, as appropriate. The Special Committee and Clearwire will pursue the course of action that is in the best interests of Clearwire’s non-Sprint Class A stockholders. Neither Clearwire nor the Special Committee has any further comment on this matter at this time.

Evercore Partners is acting as financial advisor and Kirkland & Ellis LLP is acting as counsel to Clearwire. Centerview Partners is acting as financial advisor and Simpson Thacher & Bartlett LLP and Richards, Layton & Finger, P.A. are acting as counsel to Clearwire’s special committee.

<balance snipped>

Okay, now let’s see who’s got the bigger set of dishes!

jlk

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