While some microwave incumbents are being unreasonable, others are negotiating fairly, reaching agreements and making plans to move their microwave links from the 2 GHz spectrum, according to telecom and utility people involved in the process.
“It’s unfair to tarnish the image of the microwave community because some are being unreasonable,” said Thomas Stroup, president and chief executive officer of Columbia Spectrum Management. The Vienna, Va.-based company is working on more than 100 microwave relocations for personal communications services licensees who purchased 2 GHz spectrum earlier this year to provide wireless phone service.
Businesses with microwave links at 2 GHz are being asked to move, with the PCS provider obligated to provide the microwave operator with a comparative system at a 6 GHz site. Microwave users are primarily utilities, petroleum companies, state and local governments and railroads.
“Most incumbents are being reasonable and negotiating in good faith, but some are requiring significantly enhanced systems or that the whole system be moved, and those are the bad apples that can create costly scenarios for our clients,” Stroup said.
In one extreme instance, microwave incumbents reportedly sought an equity position in the PCS company in exchange for relocation. But Stroup said he hasn’t encountered such a request.
“But an unlimited number of issues are raised in negotiations, through different approaches. I can’t say there’s one common characterization that would generalize the approach. But we have relocated some systems and signed agreements, so deals are being cut,” he said.
San Diego Gas & Electric Co. has agreed to relocate a point-to-point digital link from one mountaintop to another in a digital-to-digital transaction. The company said it moved most of its microwave links to 6 GHz about eight years ago when the utility was upgrading to fiber optics and digital technology. San Diego Gas & Electric has two or three analog links at 2 GHz that are under negotiation, mostly in unpopulated areas, the company said.
Utilities use microwave communications to gather continuous information from substations and plants, as well as for employee communications. Because the service is tied directly to operations, reliability is critical.
Nevertheless, just because a microwave path crosses that of PCS doesn’t mean the microwave has to be moved, said Loyce Hurley with the Energy Telecommunications and Electrical Association.
“There’s an interest in work-around technology, which can be a partial solution in lightly loaded situations where there isn’t much traffic,” Hurley said.
American Personal Communications has a proprietary, frequency-sharing technology, PathGuard, that allows PCS operators to share spectrum with microwave users. PathGuard is installed at base station antenna sites.
Work-around engineering and other options are considered by some PCS groups if relocation costs climb too high or the parties can’t reach agreement, Stroup said.
Some negotiations become grounded at the point of “comparable” system. Incumbents with analog systems may ask that the replacement system be digital, at the PCS operator’s expense. The turning point then may be whether the incumbent is moving one link or 40. Relocation estimates range from $50,000 to $500,000 per link, plus tower costs.
“When you get more than 10 links, that’s a big system and could be more than $1 million,” Stroup said.
American Electric Power Co. Inc. has 160 microwave links, but only 27 are at 2 GHz and only 11 are in the PCS band. The company has reached agreement on two analog links and is in discussions concerning five others. Four links will involve C-block auction winners.
The Columbus, Ohio-based holding company, which has operations in seven states, said it was in the process of rebuilding its microwave system to digital; converting old links to digital is part of the company’s plan.
For some wireless companies, negotiations give them the chance to make inroads into a relationship with utilities, which are facing deregulation and increased competition. Access to utility towers can be a factor in the discussions.
If the telecom industry finds these relocations difficult, what will happen following the specialized mobile radio auction in November? asked UTC General Counsel Jeffrey Sheldon. UTC represents the telecom interests of electric, gas and water utilities and natural gas pipelines.
“I’m not sure that all PCS operators have a strong incentive because the trade association is saying it will get the rules changed. When they paid $7 billion, they knew this property was encumbered,” Sheldon said.
Licensees who purchased 2 GHz spectrum earlier this year to provide wireless phone service.
Businesses with microwave links at 2 GHz are being asked to move, with the PCS provider obligated to provide the microwave operator with a comparative system at a 6 GHz site. Microwave users are primarily utilities, petroleum companies, state and local governments and railroads.
“Most incumbents are being reasonable and negotiating in good faith, but some are requiring significantly enhanced systems or that the whole system be moved, and those are the bad apples that can create costly scenarios for our clients,” Stroup said.
In one extreme instance, microwave incumbents reportedly sought an equity position in the PCS company in exchange for relocation. But Stroup said he hasn’t encountered such a request.
“But an unlimited number of issues are raised in negotiations, through different approaches. I can’t say there’s one common characterization that would generalize the approach. But we have relocated some systems and signed agreements, so deals are being cut,” he said.
San Diego Gas & Electric Co. has agreed to relocate a point-to-point digital link from one mountaintop to another in a digital-to-digital transaction. The company said it moved most of its microwave links to 6 GHz about eight years ago when the utility was upgrading to fiber optics and digital technology.
Utilities use microwave communications to gather continuous information from substations and plants, as well as for employee communications.
Nevertheless, just because a microwave path crosses that of PCS doesn’t mean the microwave has to be moved, said Loyce Hurley with the Energy Telecommunications and Electrical Association. “There’s an interest in work-around technology, which can be a partial solution in lightly loaded situations where there isn’t much traffic,” Hurley said.
Work-around engineering and other options are considered by some PCS groups if relocation costs climb too high or the parties can’t reach agreement, Stroup said.
Some negotiations become grounded at the point of “comparable” system. Incumbents with analog systems may ask that the replacement system be digital, at the PCS operator’s expense. The turning point then may be whether the incumbent is moving one link or 40. Relocation estimates range from $50,000 to $500,000 per link, plus tower costs. “When you get more than 10 links, that’s a big system and could be more than $1 million,” Stroup said.
American Electric Power Co. Inc. has 160 microwave links, but only 27 are at 2 GHz and only 11 are in the PCS band. The company has reached agreement on two analog links and is in discussions concerning five others.
For some wireless companies, negotiations give them the chance to make inroads into a relationship with utilities, which are facing deregulation and increased competition. Access to utility towers can be a factor in the discussions.