So, you want to build a wireless telecommunications network. Then you must be thinking about how to leverage the infrastructures of existing cellular and PCS systems. After all, you figure, the more collocating you do, the sooner your system is on the air.
But what makes you think the wireless carriers already operating in your market, or which are at least closer than you are to being on-air, want you there? What if they perceive you as a threat to their business, regardless of whether you collocate your antennae and equipment at their facilities? Even if you aren’t a direct competitor, what motivation do they have to negotiate collocation agreements with you?
Private thoughts on collocation
In public, established carriers and new players alike are fond of promoting the collocation concept. The industry seems warm to the idea of cooperating with local communities as they attempt to control the proliferation of wireless antenna structures. But in practice, collocation agreements can be hard to come by, and there are a number of reasons for this.
First, though the industry presents a unified front in many ways, it is nonetheless highly competitive. And the spirit of competition is found not only among the sales and marketing departments, but among system development personnel as well. Whatever the title of the department to which they are assigned (real estate, system development, site acquisition, site management, etc.), the folks charged with building and improving wireless systems often possess a fierce, if subconscious, desire to protect their competitive advantages.
The carriers that have been in-market the longest possess some huge advantages. The two cellular companies in each market have had more than a decade to build out their systems, and have been able to place antennae in locations no longer accessible to new entrants. Most PCS A- and B-license holders are well-capitalized and have made significant progress toward deploying mature systems in the last couple of years.
In contrast, most other PCS licensees have done little to develop their markets. Some of these, mainly the C- and F-license holders, can ill-afford protracted planning-department and community-group fights against new antenna structures. Paging companies and others attempting, or that will soon seek, to bring new uses of wireless technology to the marketplace-such as LMDS, point-to-multipoint, Internet access, utility meter reading, and retail transaction processing-also will need to use existing antenna towers to expedite system buildouts. All these companies hope for cooperation from entrenched players in their prospective markets.
Second, existing carriers don’t have as much need for collocation as new entrants do. Sure, incumbents encounter resistance to new sites just like newcomers do. But cellular companies aren’t looking to build 100, 200, 300-plus new sites per market just to get into the game.
Third, cellular site-development personnel are focused mainly on maintaining and improving their own systems. Each collocation request generates telephone inquiries, application and lease-language review, and negotiations detract from the amount of time a cellular employee can devote to the performance of tasks on which his compensation is based. It’s easy to see how collocation agreements make their way to the bottom of a pile.
And finally, carriers seeking to collocate have to blend not only differing frequencies and technologies, but varying processes, requirements, and standards as well. Cellular companies that have had more than 10 years to adopt a system-development approach are firmly entrenched in their ways, and are reluctant to modify the approach to accommodate a possible competitor.
With these obstacles, is it a miracle that wireless carriers are able to collocate antenna sites at all? While it may seem so, there are a couple of reasons why incumbent carriers are willing to enter into collocation agreements.
Why carriers like to collocate
For Steve Montoya, a California property manager for GTE Wireless, collocation with other carriers has benefits in two important areas.
“Collocation helps spread site-development costs between all parties, rather than each party bearing 100 percent of the development costs for separate sites of their own. Moreover, proactive collocation activity between carriers is typically received well by a local community as evidence of industry cooperation and sensitivity to public interests,” Montoya said.
Emily Vaughan, manager of site acquisition and development with Los Angeles Cellular Telephone Co., identifies additional financial benefits in collocating.
“Collocation can sometimes be done quicker and more cost-efficiently than developing a new site,” Vaughan said. “But, in addition to recapturing infrastructure costs and reducing operating costs, it’s an opportunity to optimize existing sites at the collocator’s expense.”
Improving your chances
Even with the clear benefits to the incumbents, the proper approach to initiating and negotiating collocation agreements is required to achieve the desired result. Whether you’re a direct competitor to the established carriers, or a purveyor of a another use of wireless technology, following some simple guidelines can improve your chances.
Become familiar with the terms and steps common to the collocation process before making the initial inquiry to a carrier. Don’t allow yourself to be caught off guard by six-page applications that must be accompanied by detailed structural analyses and application fees. These and other requirements are normal, and your counterparts have too little time available to explain them to someone inexperienced with them.
Project a pleasant disposition to your collocation counterpart(s). Establishing a rapport can help move your application from the bottom of someone’s pile to the top, while making yourself difficult to stomach can mire your negotiations in personality conflicts.
“In order for a collocation to be successful, all parties need to be reasonable and cooperative,” Montoya said.
Remember your counterpart has done site-acquisition work also. Because he is familiar with the site-approval process, he knows when his time is being wasted. Don’t put your counterpart through the tedium of providing all the information on sites you know you can’t use just to meet your quota of site candidates.
Set realistic expectations for yourself, and your superiors, as to the time frame to complete collocation agreements. It doesn’t have to take forever, but realize your counterpart does not share your license-agreement milestone deadline. Projecting your deadline pressures onto others usually results in badgering and whining, which in productivity terms are inferior to polite reminders and inquiries. Besides, whatever time you lose attempting to lease a collocation site, you will likely gain back during the zoning and construction phases.
“Unrealistic processing expectations can be very detrimental to the negotiations,” Vaughan said.
Try to minimize the additional workload your collocation negotiations impose on your counterpart. Too often, consultants and carrier employees alike do the minimum, and transfer their workload from their own desks to someone else’s. Instead, pick up and drop off documents by hand so they can’t be lost. If you are requesting language changes to your counterpart’s form agreement, draft a memo explaining your reasoning for major changes, and create a “red-line” version of the agreement that clearly identifies additions and deletions. If it is too time-consuming for your counterpart to provide you with an electronic copy of his standard collocation agreement, take a hard copy and scan it. If it will help your counterpart review the documents, make your new electronic copy available via diskette or e-mail.
If necessary, remind your cou
nterpart that collocating with you can be beneficial to him later. When he needs to add or alter a sit
e in a jurisdiction where you now share an antenna structure, educating the jurisdiction on his past flexibility may improve his chances.
Both jurisdiction and community may be more willing to accept a new tower when it’s the third, instead of the fourth, thanks to your earlier collocation. If you find yourself unable to convince your counterpart of the benefits of collocation, planning-department personnel will sometimes lobby on your behalf.
Don’t assume your rental payments to a wireless landlord are a make-or-break contribution to his bottom line. Just as collocation revenue is not your company’s primary income source, it isn’t his either. Even if someone in his organization recognizes the potential of this new revenue stream, your counterpart may not have been correspondingly encouraged to expedite collocation agreements.
Be prepared to deal with business terms that are seemingly outlandish at first glance. Many cellular carriers don’t want to discuss collocation unless you have sites to exchange. However, if you have no sites to swap, you can still collocate if you can afford to defray your counterpart’s site development costs. Some carriers require significant upfront payments in addition to ongoing monthly or yearly collocation fees. If you think the required payments are unreasonable, erecting your own tower for less can be even more daunting.
“Collocations are driven by economics, and if the deal does not pencil out, it will fail,” said Vaughn. “Firms wanting to collocate sometimes expect too many concessions on business terms.”
Just because you have a collocation agreement in place does not mean you have covered all your bases. Sometimes, a collocation agreement does nothing more than provide you a location for antenna placement. Other things to be aware of when collocating:
The carrier may not have enough space in his lease agreement for you to easily install your equipment cabinets. A creative way of installing cabinets, like stacking, my solve this problem, or you may have to negotiate a separate ground or building lease for your equipment. You also may need to obtain your own utility and access easements, depending on the language in your carrier’s agreement with his landlord.
The incumbent carrier’s site lease or license agreement may include provisions that change the business terms of the agreement in the event of a sublease to another carrier.
“A collocation can trigger a rental increase by the landlord that is not offset by the terms of the collocation,” Vaughan said.
In most cases, collocation is a means by which zoning approval is expediently achieved. But not always. For example, a new zoning ordinance may have turned an existing and previously permitted tower into a nonconforming use. Any alteration to the tower may be viewed as an expansion of a nonconformity and thus frowned upon. However, many jurisdictions will allow a one-time height increase of 20 feet for collocation in order to curb the proliferation of towers. Such a height increase likely will require a lengthier process than the administrative review you expected when you first considered collocating on the tower.
Even if your prospective collocation site conforms to existing zoning ordinances, your attempt to place more antennae on it could have an impact opposite the one you expect.
“Strangely enough,” said Montoya, “there have been cases when local residents and/or planning officials would prefer two or more sites, with reasonably adequate spacing, rather than have one site with multiple users. Multi-user sites mean more maintenance traffic, more antennae, and more perceived exposure risks.”
If you have to replace an existing tower to accommodate your antennae, not only do you have to do it without interruption to the incumbent carrier, but you will have to navigate a fairly complex zoning process. Many codes allow tower replacement structures on a property for collocation, but with limitations. The replacement probably will have to be for the same, or an even less-intrusive type of structure (i.e. monopole for lattice, not lattice for monopole). The replacement may have to be within 50 feet of the old structure. The height increase will be limited, and setbacks from property lines will have to be maintained.
The key to siting in today’s land-use climate is the right to build. Collocation can help you clear this hurdle, but as these last points illustrate, even your best efforts to honor the tower-limiting wishes of the local jurisdiction and community can bring opposition. While the above guidelines can help you in your negotiations with the incumbent carriers, becoming familiar with the local zoning codes, especially any telecommunication-specific ordinance, will help you avoid surprises.
Bill Winn is director of Comcor Advisory Services, San Francisco.
