Good Musings
Good Musings from Ken Schmidt (internal link) and Mark van der Hoek (internal link)
Ken: There's been some terrible language lately going into certain wireless ground lease contracts. The carriers are actually trying to get through clauses like these:
1. One carrier's lease now states they may increase the size of the compound and the landowner must consent, such consent not contingent upon monetary gain. By the terms of the lease they could expand to the whole parcel and the landowner could not object.
2. A certain tower company now includes in its lease that it does not pay ground rent until the second carrier comes on the tower. Outrageous. This is a blanket clause for them, not an exception for expensive sites.
3. In the same lease the same carrier now allows the landowner to request a tower and compound move once during the lease at the carrier's expense after the first term has expired. Still trying to figure that one out.
Lastly, about practices. I cannot stand the lease purchase entities (internal link, more on buying cell ground leases) like Wireless Capital Partners and others. The salesmen are getting downright misleading. Satellites will cut your lease short or consolidation means your tower is coming down, and so on. Yet we will be happy to buy your lease and take those same risks.
Mark:
Those land grab clauses are indeed outrageous, I hope you help your clients negotiate out of them. One thing I know well is that upcoming technology and consolidation won't reduce the number of base stations needed, in fact, we'll need thousands more every year.
Satellites replacing terrestrial cellular radio? Liars! One acronym proves it: RTD. Round Trip Delay. Satellite communications stink because of it. Until some laws of physics are repealed it will stay that way. A radio wave has a finite speed, close to the speed of light, and without some earth shaking breakthrough in quantum physics, that finite speed will limit the user friendliness of satellite phones. Yes, they are usable, but no, they aren't as good. The delay is annoying. You can work with it, but it's still annoying. Then there's the capacity problem, the ability to handle many calls with a limited amount of spectrum.
The whole reason cellular became practical is the concept of frequency reuse. We took single, large antennas off of mountain tops and put smaller ones on rooftops and towers. Now we can use frequencies several times across a metropolitan area, instead of only once. Since satellites have such a huge footprint, they don't have that advantage. For this reason, ground based systems will always offer superior capacity. Any new coding or compression developments that allow more capacity on satellite systems will also be available to ground systems, so satellites can't get ahead of the game.
Then there's the matter of battery life. I'm sorry -- it's just always going to take more power to talk to a satellite than it does to talk to a cell site a quarter mile away. Basic physics again. Oh, did I mention you have to almost always be outside to use them? Barring some nationwide political development, I can't see satellite services EVER replacing terrestrial based services. Augmenting, yes, replacing, no.
Consolidating, yes, another reason used to get people to sell their cell site lease. We lose a tower here and there, but not many. And if it's a multi-carrier tower, the probability drops dramatically. You'd have to get all of the carriers to reach the conclusion that they don't need and will never need that site. I think you're more likely to get a cell site shut down by some lawsuit revolving around a zoning issue or nuisance claim. And we know that's not likely once the site is on the air. It can happen, but it's a rare event.