The Upgrades are Coming (or For Your Site, Maybe They’re Already Here)

2010 will be the year of the cell site upgrade.  Whether on a roof-top or a water tank, all of the wireless carriers are busy adding new components, or changing out old parts, to increase the capability of the site.

Has the Tenant Requested Approval?

Most wireless leases were originally drafted by carriers.  True, most landlords ask for and receive changes to the original lease language, but few landlords were ever prepared for upgrades.  At the most, there may be a clause requiring that a landlord would ”not unreasonably withhold approval of a request” for an upgrade or any other form of modification.

But a requirement for the landlord’s approval may not mean that the tenant needs to describe the modification in terms of what it really is.  All it takes to substantially upgrade the cell site is a new cabinet (or filling one labeled “Future” in the lease exhibits), a change-out of some antennas or a few more cables.  Let’s take a look at what the four national carriers are set to do (or are already doing).

Verizon

The leading wireless carrier in the U.S. is expanding most of its cell sites, sometimes by a factor of doubling its capability or, at least, expanding it by 50%.  The new ingredient will be 700 MHz bandwidth, which will allow Verizon to launch LTE (Long Term Evolution) services and eventually migrate to 4G (Fourth Generation) technology.

Look for additional cabinets or equipment racks, another set of cables and a change-out of antennas.  These may not be installed all at once, which might arouse landlords’ suspicions, but a little at a time.  A cable here, an antenna there and pretty soon we’re talking major upgrades.

Verizon has already started upgrading its cell sites and, in the cases Kreines & Kreines, Inc. has seen, the carrier does not announce that a major upgrade is underway.

AT&T Mobility

Similar to Verizon, AT&T is investing heavily (though not as much) into 700 MHz equipment.  AT&T is a little behind Verizon in the upgrade race, so if you have AT&T as a tenant, the real action is yet to begin.

AT&T has had two major experiences with upgrades:

·         Like Verizon, AT&T may have purchased PCS licenses or spectrum and added the equipment to existing cell sites (did they ask the landlord’s permission for that?).

·         AT&T’s major expansion occurred with Cingular’s purchase of AT&T Wireless (a different company) and then the new AT&T’s purchase of Cingular.  In both sales, the old company had licenses and spectrum which were then added to the buyer’s cell site (did they ask the landlord’s permission for that?).

For AT&T Mobility, more cables, at least one more equipment rack or cabinet, and a major change-out of antennas will be needed.  When you see the changes occurring, ask about what might be going on.  The answer may be that they are just replacing a few cables. With the manual described in the front-page article, it becomes easier for the landlord to understand that AT&T Mobility is installing its 700 MHz equipment.

Sprint Nextel

Sprint Nextel might tell anyone who asks that they are a single carrier and, like AT&T/Cingular, Sprint can install its equipment at Nextel sites and Nextel can install its equipment at Sprint sites.  However, the Federal Communications Commission (FCC) regards these as two separate carriers and so should landlords.  A second carrier at a site should be covered by a second lease or at least an amendment to the existing lease.

Sprint Nextel, trying to beat the top two carriers to 4G, has turned to a third carrier, Clearwire.  For its part, Clearwire may approach a landlord who has a site with Sprint or Nextel and announce that Clearwire is part of the company called Sprint Nextel.  Here are the facts:

·         Clearwire is a separate, independent company with its own stock, its own Board of Directors and its own staff.

·         Clearwire is a Broadband Radio Service (BRS) and not, by definition of the Telecommunications Act of 1996, a personal wireless service like Sprint and Nextel.

·         Clearwire has a strategic alliance with Sprint Nextel, but deploys its equipment separately although nearby Sprint or Nextel.

·         Clearwire combines its frequencies with Sprint Nextel and that gives the strategic alliance more bandwidth and faster service than any other competitor.

The problem is that Sprint Nextel keeps losing subscribers.  They need more cell sites with Clearwire co-located.  Do you have a lease ready for them?

T-Mobile (aka Omnipoint, VoiceStream, etc.)

T-Mobile is still trying to deploy 3G, which every other carrier has.  The problem, until 2006, was that T-Mobile didn’t have sufficient bandwidth.  In 2006, T-Mobile doubled its spectrum by purchasing most of the Advance Wireless Services (AWS-1) spectrum put up for auction by the FCC.  Now, T-Mobile is busy placing AWS-1 equipment at its cell sites.  This means a doubling of equipment but, if you’re looking for antennas, you won’t see twice as many panels.

T-Mobile, like the others, uses dual-banded antennas, allowing the carrier to place both PCS and AWS-1 frequencies in “combining” antennas.  Yet the antennas, though changed out from the old PCS antennas, look about the same.  However, the power density coming from those antennas will double.

A manual tells the landlord what to look for at upgraded sites like T-Mobile’s.  If you have an improved lease per a manual, you’ll know how to negotiate for an increased rent.

That Isn’t the End of Upgrades; It’s the Beginning

2010 is a watershed year for the wireless industry.  The upgrades during 2009 and 2010 signal the quantum change in cell site upgrades that must continue on for at least five years.  Look at it this way:

·         There is about 600 MHz of spectrum in the U.S. that personal wireless service carriers can buy or use with a partner for their cell sites.

·         But the most any single cell site can consolidate in any given market is less than 200 MHz, way short of the spectrum needed for mobile data.

·         CTIA, the Wireless Association, wants the FCC to release another 100 MHz of spectrum by the end of 2010, by auction or any other means in order to expand bandwidth.

·         Cisco Systems, a company betting its future on mobile data, states that the carriers will need another 800 MHz available by 2015.

That’s a lot of upgrades.  Are your leases ready?

To learn more, subscribe to the PlanWireless newsletter...

Top of
page

Kreines & Kreines, Inc.
58 Paseo Mirasol, Tiburon, CA 94920
Phone: (415) 435-9214
Fax: (415) 435-1522
e-mail: mail@planwireless.com