Cellular Antennas on Special District Property: The Opportunity and the Risk

Telecommunications Law

Telecommunications Law

Cellular Antennas onSpecial District Property:

The Opportunity and the Risk

Gail A. KarishMatthew K. Schettenhelm

Best Best & Krieger LLP

September 17, 2013

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Do you have any obligation to licenseyour property to cell-phone companies?

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No.

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(Or, you shouldn’t.*)

*FCC rulemaking?

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Do you “regulate” cell towerplacements?

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No.

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You are a property owner.

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It is the company’s obligation to ensurethat it has all regulatory approvals.

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This talk will have two parts.

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(1) regulatory framework

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(2) how you protect yourself as aproperty owner

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What regulations apply here?

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Typically, local zoning approval

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(May be easier to get zoning approvalon special-district property than

elsewhere)

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47 U.S.C. § 332(c)(7)

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Generally preserves local zoningauthority, subject to five limitations

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1. A State or local government may not“prohibit” the provision of service.

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2. It may not unreasonably discriminateamong providers.

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3. Any decision to deny must be inwriting and supported by “substantial

evidence.”

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4. A local government must act within a“reasonable period of time” in light of

the nature of the application.

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The FCC reasonably imposed90 and 150-day “shot-clocks”

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The Supreme Court upheld the FCC

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City of Arlington v. FCC,No. 11-1545

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5. The local government must notregulate based on the effects of

radiofrequency emissions

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47 U.S.C. § 1455

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A State or local government “may notdeny, and shall approve, any eligible

facilities request” for a modification ofan existing wireless tower or basestation that does not substantially

change the physically dimensions ofsuch tower or base station.

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“Eligible facilities request” is anyrequest to modify an existing tower or

base station that involves:“(A) collocation of new transmission

equipment; (B) removal of transmissionequipment; or (C) replacement of

transmission equipment.”

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Congress left all the other key termsundefined

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&

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Didn’t clarify if it intended to reachproprietary, or only regulatory, action

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In January, FCC issued non-binding“guidance”

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• Defines “substantially change” throughcriteria developed in a different context(historic preservation).

• no “substantial change” if an additionextends a facility less than 20 feet in anydirection.

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Defines “substantially change” through criteriadeveloped in a different context (historicpreservation).• For example, no “substantial change” if an addition

extends a facility less than 20 feet in any direction.

Offers broad definition of “base station” thatcould make statute apply to many facilities.

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Historic Site – Post Guidance?Illustration showing potential impact of co-location of an additional approximately 20’-high pole mounted antenna array.

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Stealth Site –Now

100’ monopole disguised as a flagpole constructed toconceal six panel antennas within its exterior. Locatedon Brightseat Road alongside I-95 in Prince George’sCounty, Maryland.

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StealthSite – PostGuidance?

Illustration shows the potential impact of anapproximately 20’- high extension to support a co-location of antennas in a typical triangular platformarray (partially shown at top of frame) and smaller co-location in a flush-mount attachmentconfiguration atop the existing monopole.

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Rooftop Stealth Site – NowTwo-story office building located on Layhill Road at Bonifant Road in Montgomery County with antennas fromthree carriers permitted by Special Exception and either concealed within the faux screening atop the penthouseon the roof, or painted to match the exterior of the screening or brick walls.

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Rooftop Stealth Site – Post Guidance?Illustration of a tower-like structure constructed to support co-location antennas approximately 20’ above existingantennas.

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We expect the FCC to launch arulemaking, perhaps within the month

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Educating the FCC could be important

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Part II:How should you structure the deal?

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10 points1. Control the drafting process2. Establish the structure (lease/license)3. Define what you are granting4. Establish the term5. Set the rent6. Address subletting and assignment7. Forbid interference8. Clarify removal responsibilities9. Address termination10.Include standard terms

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(1) Control the drafting process

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Company’s form agreements likely willbe highly slanted in their favor

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Consider developing your own

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(2) What are you granting the company?

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Usually ok to structureas a license or a lease

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(3) What access are you granting?

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Define specifically what facilities maybe placed, and where

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Do not freely allow “improvements”:require specific plans, subject to your

approval.

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Avoid: “approval will not beunreasonably withheld, delayed, or

conditioned”

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If you allow replacement of existingfacilities, clarify that new equipment

cannot differ in size, impact, aesthetics,etc.

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Address how the company may accessits facilities – and when it will do so . . .

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May the provider use common areas?

Must it obtain supervised access?

Must it provide advanced notice?

May it use your access roads or obtainits own?

Are there other security risks that needto be addressed?

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Address how the provider will obtainand use electricity at the site

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If you have aesthetic concerns,address them directly

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(4) What is the term?

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Typically structured as consecutiveseries of 5-year terms,

spanning 20 or 30 years total

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Avoid “options to lease” particular sites,which may prevent you from recovering

full fees for a particular location

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Avoid long delivery or constructionperiods pre-payment; begin payments

immediately

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If provider requests a “due diligence”period, don’t give this time away for

free – and ensure that providerindemnifies you.

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(5) What should you charge in rent?

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Two elements:

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(1) Base rent

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(2) Collocation fees

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Base rent for tower typically between$2,000 - $5,000/month

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Companies often offer low annualescalators

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Can collect collocation fees from initiallicensee or directly from later

subtenants

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Address late fees (interest)and hold-over fees

(100%-200% of then-current rent)

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(6) Subletting and Assignment

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Do not permit subletting/collocationwithout your permission

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• Have licensee waive rights under CivilCode §§ 1995.260, 1995.270

• 47 U.S.C. § 1455 should not affectcontractual restrictions*

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(7) Interference

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Ensure that tenant cannot interfere withyour operations – or those of any

existing tenants.

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Burden should be on newcomers

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Be sure that it is not on you

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(8) Removal

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May depend on type of facility

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In some cases, you might assumeownership.

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In others, licensee shouldbear the duty to remove, at its cost.

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(9) Termination

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Establish events of default justifyingtermination:

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Non-payment

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Habitual late payment

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Violation of any term, if not cured

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Bankruptcy

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Carefully define when the provider canterminate

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Either prohibit volitional terminations orrequirement payment

(e.g. rent for remainder of term or 12-24 months of rent)

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(10) Standard terms

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Insurance: check with risk-assessmentTypical: general liability, auto liability,employer’s liability, all-risk property,

and workers’ compensation

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Hazardous substances:strictly prohibit

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Require indemnification

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No relocation assistance

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What to do after you contract?

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Monitor compliance, and . . .

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. . . after you have a great deal . . .

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don’t change it.

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Be wary of offers:• To purchase lease/license rights• To extend agreements• To alter terms

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Matthew K. Schettenhelmmatthew.schettenhelm@bbklaw.comBest Best & Krieger LLPWashington, DCPhone: (202) 785-0600

Thank you

Gail A. Karishgail.karish@bbklaw.comBest Best & Krieger LLPOntario, CAPhone: (202) 785-0600