The clock is ticking for wireless carriers as they race to secure urban locations for small cells. Carriers need to add outdoor small cells to handle the exponential growth in demand for mobile data on busy city streets.
“The right of way deployments are absolutely necessary for volume … especially in these urban areas that are high density population and data traffic,” said Tom Kane, president of NB+C. NB+C has worked on more than 2,500 east coast small cell deployments during the last three years. “The right of way is absolutely necessary, but you are dealing with utilities on top of municipalities and many times even departments of transportation and other governmental authorities on top of that,” Kane explained. He said carriers crave predictability when they try to budget for large numbers of small cells in various cities. But every city is different. “They’re literally all over the map on schedule and budget,” Kane said.
Some cities are requiring wireless carriers to pay more than power companies or wireline telecom providers pay to attach to poles or access fiber in the right of way. Mobilitie, the company deploying small cells for Sprint, is classified as a utility in all 50 states, but has faced higher fees in some cities than power utilities pay. The company has also scuffled with municipalities over permitting procedures, prompting at least one state government to intervene on the cities’ behalf.
Mobilitie CEO Gary Jabara thinks cities that delay small cell applications are shortchanging their citizens, and said those that overcharge are at risk of depriving some of their most vulnerable constituents. Jabara said that if a city charges too much for the right of way, “there is no budget for … the tough side of town … and that’s where it needs to be installed.”
Cellular service can make a huge difference to people who do not have Wi-Fi or a landline at home. Some cities, including New York and Austin, are looking at rules that will require carriers to improve coverage in underserved neighborhoods as a condition of installing small cells in the downtown right of way.
Moving to private property
For wireless carriers, the ideal arrangement with a city is often a master lease agreement. This gives the carrier access to many locations under the same terms. But when master lease agreements don’t fall into place, carriers often end up doing a series of smaller deals with commercial landlords.
“I think the original thought was it was going to be a 75% – 25% split [between] right of way [and] commercial, and I would bet now it will be far closer to 50-50,” said Greg Tully, managing director of engineering services at NB+C. “In certain cases they have no choice. The commercial solution is really the only solution that’s going to provide the necessary capacity. The other thing that is important to understand about the right of way, just from a practical perspective, is that in the power industry there’s quite a bit of trending towards underground utilities to protect from the elements and to protect from the maintenance cost associated with weather and things like that. So the fewer pieces of existing utility infrastructure you have [available] to modify, the more often the small cell solution has to be a new freestanding structure, which then just further compounds potential zoning issues and things of that nature.”
AT&T has said that more than one half the outdoor small cells it has deployed to date are on new structures. The carrier has also said the number of nodes it has built so far is small in comparison to the number it hopes to construct. All the carriers are planning to build in urban corridors in the months ahead, and all of them want access to the public rights of way.
“Verizon, Sprint, T-Mobile, AT&T, all of them, they would all love to spend $5 billion this year with small cell attachments across the country, but nobody can,” said Jabara. He blames municipalities for causing delays, and said Mobilitie has been a “huge force with the FCC,” in arguing for federal intervention.
The FCC’s role
This week, Mobilitie filed a petition calling on the FCC to adopt a declaratory ruling interpreting Section 253(c) of the Communications Act of 1934 to specify that cities cannot charge carriers more than they charge other providers who access the right of way. The petition also calls on the FCC to define “fair and reasonable compensation” for cities as the amounts jurisdictions need to charge to recoup the costs associated with permitting and managing the right of way.
For the most part, wireless carriers have not publicly called for federal intervention, and have instead focused on the need for cities, carriers, state governments and federal regulators to work together in the interest of citizens.
“It’s an exciting time,” said AT&T’s Paula Doublin, assistant VP for antenna solutions. “How we handle this is going to be a reflection on all of us, whether it be carriers, whether it be cities and munis, and of course the government regulators … It’s going to take all of us to make this happen.”
More on small cell networks:
Building Tomorrow’s Networks (webinar recorded 10/19 with AT&T’s Paula Doublin and Tony Perez, immediate past president of NATOA)
Best Practices for Deploying Hetnets (feature report)
Image source: AT&T photo simulation
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