Cell site leasing information (1) (2) (3) (Help with cell site questions) (Government agencies) (Selling a lease?)

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Ken Schmidt here. The most frequent question we receive at Steelintheair.com (external link) is "How can I get a cell tower on my property and start receiving money?"

The real and often disappointing answer is that in most cases, the average landowner cannot. Perhaps the reasons for this could be better understood by asking a similar question, "How can I get a McDonalds on my property?" Both McDonalds and Towers are everywhere, both sometimes lease land, and both pay very good lease rates. But most landowners understand that McDonalds build their locations where they are going to serve as many hamburgers as possible. They build in high traffic locations along busy high-ways and in the middle of small towns. They don't build within a few miles of an existing location unless there is enough foot and driving traffic to support each location fully. McDonalds can also only build where the local city or county development office allows them to build, typically in commercial zoned areas.

So how does this McDonald's analogy apply to how I get a tower on my property? Wireless cellular and PCS companies like AT&T Wireless and Sprint are also corporations that exist to make a profit. They make profit from MOUs' or Minutes of Use. Every time you make or receive a phone call from your cell phone, you use up Minutes. Depending upon the wireless plan you have, that minute of use costs anywhere from 5¢ to 50¢. Wireless companies build their towers for essentially two reasons:

• To provide coverage in areas where customers will use the most MOU's
• To provide coverage where customers travel between those areas

To further describe this, carriers essentially use a phased build out process:

In Phase 1 they first cover large population areas like cities.

In Phase 2 they build out the outlying areas of cities such as suburban areas and major roadways leading out of the cities.

In Phase 3 they build out the highways and corridors that connect the large cities.

In Phase 4 they build towers or sites in smaller cites or large towns between the large cities.

In Phase 5 they build in those rural areas that connect the smaller cities or large towns with the large cites.

You probably see how this relates to McDonalds. McDonalds does not build stores in areas where it is not profitable. Nor do they build near existing McDonalds stores. Where the analogy fails is that McDonalds will build where their competitor has built. You'll often see a McDonalds next door to a Burger King or other fast food location. There is, however, a difference with towers. Wireless companies and tower owners do not often build towers near existing cell towers.

There are a couple of reasons for this. The main one is that a tower is like a shopping mall in that it can accommodate multiple Stores. Sprint and AT&T Wireless can "Colocate" or both lease space on the same tower. While five to six years ago, they would sometime choose to build their own tower, that does not occur as often today. Many cities and counties do not allow towers to be built near another tower unless it can be proven that the existing tower cannot accommodate the additional antennas.

Wireless companies (we call them "carriers") design their systems based around the phases listed above. The system is a relatively complicated one that often takes 6-9 months to complete. Carriers start with a Radio Frequency Design where they figure out the optimal way to provide coverage over a given area of corridor. This design takes into account a number of factors such as population density, terrain, traffic counts, existing site locations, zoning requirements, and FAA height restrictions.

Using expensive and complicated radio frequency engineering software, each carrier designs "search rings" or areas where they would like to place antennas on an existing structure if there is one or build a new structure. It is important to note that every carrier has different engineering standards as they use different equipment and operate on different frequencies. Thus, they can each have very different designs.

These search rings are "issued" to a site acquisition agent whose is responsible for finding suitable candidates for the placement of antennas within the search ring. Search rings can be as small as 1/10th of a mile in diameter to as large as 1 mile in diameter depending upon how if the area is urban or rural.

The property candidates will almost always be one of the following three types.

• Raw Land -- a vacant location for a tower
• Collocation -- an existing tower that has space for antennas
• Existing Structure -- Non-tower structures like buildings, water towers

Obviously, if you are reading this, then you either have a existing structure such as a building or you have land you would like to be a candidate in one of these search rings. This is where the problem starts. Even for industry veterans it's pretty difficult to figure out where these search rings are. If your property is not inside a search ring, then there is little to no chance that a wireless company would be interested in it. To make matters worse, even if your property is in a search ring, if there is a suitable tower or existing building that is tall enough, the carrier will typically collocate. Sorry to sound so pessimistic but I have to be honest with you.

Now, if you do have a lease or have been offered one, please feel free to visit our website at Steelintheair.com (external link) We would be happy to help you evaluate each individual offer on its own merits to help you or your agency arrive at a lease rate that maximizes your return while minimizing the risk that the carrier goes elsewhere.

But, please do not contact us with land that you would like to lease to a tower company, unfortunately, we cannot help and we would be wasting your time if we told you we could. If you have a building taller than 50 feet or a tower that you own, we may be able to help.

Thanks, Ken Schmidt

E-mail us: ken@steelintheair.com

Steelintheair.com (external link)

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Cell site leasing information (1) (2) (3) (Help with cell site questions) (Government agencies) (Selling a lease?)