NEW YORK-With existing wireless carriers seeking to expand coverage and capacity and new spectrum poised for commercial use, building owners and managers must develop enhanced expertise in telecommunications before negotiating cell site leasing deals.
Landlords must deal with issues including: health hazards to equipment installers from radio-frequency emissions, avoidance of exclusivity contracts with individual carriers, transmission interference among different carriers’ radios, unanticipated energy use for cooling heat-generating telecommunications equipment, clandestine carrier additions of radios not covered by lease agreements and lack of carrier revenue sharing as existing cell sites serve more customers and carry more traffic inside and outside their premises.
Rooftops have grown increasingly desirable in recent years as the fixed and mobile wireless industry has become highly competitive and zoning regulations for towers more stringent in tandem with their proliferation, said Maria Scotti, director of Message Center Management, Hartford, Conn.
Local government regulations governing rooftop access also have become increasingly strict but not nearly to the degree as those governing new towers, she said last week at “AccessCom 2000,” sponsored by Shorecliff Communications Inc.
“The state of building access is that there are not laws or regulations at the federal level to mandate it. The [Federal Communications Commission] has four dockets pending, but the industry doesn’t expect rulings anytime soon. As an industry, we think [mandatory access] is unnecessary and unconstitutional,” said Gerry Lederer, vice president of government and regulatory affairs for the Building Owners and Managers Association International, Washington, D.C.
“Thirty states have examined this issue, but nothing has passed. Only one bill is still alive, here in New York state.”
In addition to rooftops, the exterior walls of buildings also have become necessary cell site locations for carriers needing to overcome the “canyon effect” that results from skyscrapers blocking transmissions, said Ric Prentiss, senior vice president of equity research for Raymond, James & Associates Inc., St. Petersburg, Fla.
On average, wireless carriers pay about 3 percent of their revenues for cell sites of all kinds, he said. This works out to an average flat fee of $1,500 monthly, regardless of the traffic a cell site carries or the airtime revenues it generates.
“I have not yet seen actual revenue sharing agreements between carriers and building owners. I know you would like to get these, but that’s not likely unless you have a great site, and all the best sites in existence already are in use,” Prentiss said.
“Operators are trying to stay away from revenue sharing because they don’t want to give anything away.”
However, short of revenue sharing, there are ways that building owners can maximize the rents they charge carriers, said Scotti, who is also a member of BOMA’s Telecom Task Force.
“Make sure telecommunications service providers understand your rooftop has been and will be made available to other carriers. There is a big legal question as to whether you can grant exclusivity, so it is dangerous legally to do so,” she said.
Some signals interfere with others, as is the case when two-way radio transmissions bump into AM radio waves.
“Carriers often offer to check this out themselves. Don’t go there. You do it. There is technology to limit interference if people are willing to use it,” Scotti said.
Both fixed and mobile wireless carriers have become as interested in the number of tenants inside a building with a cell site as in the number of users that can be served by deploying the base station as a hub for wireless communications off premises. Landlords must understand the value of their property through the eyes of carriers before negotiating leases with them, Scotti and Prentiss said.
Scotti added that she sees no reason why a landlord should not allow the largest tenant to choose for itself which fixed wireless carrier it wants. However, she cautioned against letting tenants provide or arrange for installation, partly because professionals trained in the potential hazards of high-level radio-frequency emissions at cell sites should do the work.
Because it is difficult for a building owner to tell whether carriers have added more radios to their racks than originally placed, Scotti advised stipulating upfront the number paid for in the lease.
She also said it is preferable to require carriers to obtain their own, separately billed electrical service. While the base stations themselves may not use much power, the heat they generate puts high demand on air conditioning systems.
“We’re just getting used to [personal communications services], but the FCC just closed 39 GHz auctions May 5 for fixed point-to-point and point-to-multipoint communications,” Scotti said.
While Winstar Communications Inc. took most of the licenses in the $500 million overall bidding, companies like AT&T Corp., Advanced Radio Telecom Corp., Hyperion and Nextband also gained 39 GHz licenses, she said.
On the near-term horizon are 700 MHz auctions, the re-auction of C-block broadband PCS licenses, two 800 MHz specialized mobile radio auctions and auctions of 4.9 GHz and 24 GHz licenses for “new and innovative services,” she said.
“The 800 MHz auctions are for a two-way, dispatch-like product, and there are a lot of people doing very well dispatching their own fleets,” Scotti said.
“These also might make some more room for Nextel (Communications Inc.), or there might be room for a Nextel competitor. It is a good time and about time for a Nextel competitor.”
