Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Cellphone Tower Regulation: Maximizing Revenue While Protecting Local Interests Structuring Leases, Navigating Siting Challenges, and Complying With Supreme Court's Ruling on Notice THURSDAY, MAY 14, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Gerard Lederer, Partner, Best Best & Krieger, Washington, D.C. Joseph Van Eaton, Partner, Best Best & Krieger, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

2 Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial and enter your PIN when prompted. Otherwise, please send us a chat or sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

3 Continuing Education Credits FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: In the chat box, type (1) your company name and (2) the number of attendees at your location Click the SEND button beside the box If you have purchased Strafford CLE processing services, you must confirm your participation by completing and submitting an Official Record of Attendance (CLE Form). You may obtain your CLE form by going to the program page and selecting the appropriate form in the PROGRAM MATERIALS box at the top right corner. If you'd like to purchase CLE credit processing, it is available for a fee. For additional information about CLE credit processing, go to our website or call us at ext. 35.

4 Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to Conference Materials in the middle of the lefthand column on your screen. Click on the tab labeled Handouts that appears, and there you will see a PDF of the slides for today's program. Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon.

5

6 Cellphone Tower Regulation: Maximizing Revenue While Protecting Local Interests Joseph Van Eaton Gerard Lederer Best Best & Krieger LLP Strafford Webinars - May 14,

7 Part I: Local Regulation of Wireless Facilities Part II: Leasing Facilities to Wireless Providers 7

8 Part I: Local Regulation of Wireless Facilities 8

9 Section 332(c)(7) (cont d) 47 U.S.C. 332(c)(7) (Preservation of Local Zoning Authority) 47 U.S.C (Section 6409) (Collocation/Modification of Existing Facilities) Section 332(c)(7) applies to personal wireless service (PWS) facilities, which includes commercial mobile services, unlicensed wireless services, and common carrier wireless exchange access services Generally preserves local zoning authority, but imposes five limitations. Shall not unreasonably discriminate among providers of functionally equivalent services (332(c)(7)(B)(i)(I)) Prohibit or effectively prohibit provision of PWS (332(c)(7)(B)(i)(II)) Locality must act on request within reasonable period of time 9 9

10 Section 332(c)(7) (cont d) Generally preserves local zoning authority Decision to deny must be in writing and supported by substantial evidence No regulation of RF except may require applicant to satisfy FCC rules Limitations do not apply to proprietary property. Supreme Court has recently ruled on meaning of in writing requirement: Denial and substantial evidence need not be in same document, but must be essentially contemporaneous. See, T-MOBILE SOUTH, LLC v. CITY OF ROSWELL U.S., 135 S.Ct. 808 (2015)

11 FCC Report and Order 155 Page Report and Order Adopted October 17, 2014 Released October 21, 2014 Published in Fed. Register on January 8, 2015 Appeal Underway Argument Expected in 4 th Cir. by October Partial Effective Date April 8 11

12 12

13 Section 6409(a) (47 U.S.C. 1455) (a) Facility modifications. (1) In general. Notwithstanding any other provision of law, a State or local government may not deny, and shall approve, any eligible facilities request for a modification of an existing wireless tower or base station that does not substantially change the physical dimensions of such tower or base station. (2) Eligible facilities request. For purposes of this subsection, the term eligible facilities request means any request for modification of an existing wireless tower or base station that involves (A) collocation of new transmission equipment; (B) removal of transmission equipment; or (C) replacement of transmission equipment. 13

14 FCC Rules 47 CFR Definitions 1. Substantial Change Towers other than RoW towers, modification: Increases height by more than 10% or 20 feet whichever is greater Appurtenance added protrudes from body of structure more than 20 feet or width of tower at pt. of attachment All other support structures, modification Increases height by 10 feet or 10%, whichever is greater Appurtenance added protrudes more than 6 feet Height measured from facility as it exists as of date of passage of Act (2012) 14

15 FCC Rules 47 CFR Definitions (cont d) 1. Substantial Change For towers and base stations in RoW: New equipment cabinets if there are none, or involves placement of cabinets 10% greater in height or overall volume than other cabinets associated with structure All other eligible support structures: Installation of more than four equipment cabinets It entails any excavation or deployment outside of site It would defeat concealment elements of the eligible support structure 15

16 FCC Rules 47 CFR Definitions (cont d) 1. Substantial Change It does not comply with conditions associated with siting approval but limitation does not apply to any modification that is non-compliant only in a manner that would not exceed thresholds identified in (i)-(iv). 2. Tower: structure built for sole or primary purpose of supporting FCC licensed or authorized antennas and associated facilities. 16

17 FCC Rules 47 CFR Definitions (cont d) 3. Base Station Equipment associated with wireless comm. service Antennas, coax, backup power supplies any structure other than a tower that at time of application was supporting or housing the above. 4. Existing: A constructed tower or base station that has been reviewed and approved under the applicable zoning or siting process or under another State or local process, except towers not in a zoned area when built, but lawfully constructed (non-conforming uses?). 17

18 FCC Rules 47 CFR Definitions (cont d) 5. Eligible Support Structure is any Tower or Base Station Key Notes: Does not preempt generally applicable safety and health codes Does not apply to proprietary property of community Reaches all wireless facilities including Wi-Fi deployments Does reach Distributed Antenna Systems (DAS) & Small Cells 18

19 Application Review General rule: may not deny and shall approve any eligible facilities request that does not substantially change physical dimensions Can require documentation reasonably related to determining whether request meets requirements of section Sixty days to approve UNLESS locality determines facility is not covered Time frame tolled by agreement; or if notice provided of incompleteness (30/10) with detailed citation to requirements Failure to Act = application deemed granted Deemed grant becomes effective after applicant notifies community that time has passed 19

20 20

21 Do s Examine whether your laws and forms are consistent with new order (Hint: Probably not). Clarify in your ordinance/government practice manual that DAS/small cell applications are entitled to Shot Clock. Consider enactment of an ordinance that prefers government property for cell locations. Remember: the first cut is the deepest 21

22 30 Days 60 Days 90 Days 150 Days Incompleteness for 6409 (a) & 332(c)(7) 6409 Collocations Collocation Do s New Site Proprietary You Belong to Me Rule: Ensure everyone in your organization understands that this order does not grant right of free collocations on government property. Ensure that you don t grant that right in your leases /licenses by requiring approval in writing of municipality/special District. Ensure that industry does not use new rules as an excuse to install generators or switch out equipment at your sites. 22

23 Changes to Your Applications/Process Devil in Disguise Rule: More stealth? Require applicant provide documentation that is reasonably related to determining whether the eligible facilities request meets the requirements of Section 6409(a). Meets size change including cumulative limit Meets any stealth obligations Meets any building code/safety/non-discretionary structural code Complies with any condition of approval of construction or modification imposed on the applicable wireless tower or base station 23

24 Don'ts Impose a moratorium Commission is specific that moratoria will not toll 6409(a) or 332(c)(7) applications. Approve without understanding how a facility may expand the smallest facility may grow an additional 10 feet up and 6 feet out. Demand documentation for the business need for the proposed modification or require a business case for expansion. 24

25 Consider an Acknowledgement Ordinance Community is aware of new 6409 (a) standard as established by Federal Communications Commission in Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies, 80 Fed. Reg (Jan. 8, 2015) (amending C.F.R. Part 1 and 17). ( Report & Order ). Staff is directed to act in compliance with the timeframes and limitations outlined in the Report and Order. Might empower 1 person to review; nothing requires process to be ministerial or nondiscretionary; Might allow staff to require applicants to comply with extensive notice requirements and/or other procedural hurdles Should any part of the Order be struck down by a court of competent jurisdiction, staff are directed to amend community practices accordingly. 25

26 Model Ordinance Engage counsel. See National Orgs model. Please make sure not to incorporate into local law obligations not in place in federal law or subject to appeal. 30 day, 10 day and deemed granted are all subject to OMB approval. Other sections that may be overturned on appeal. 26

27 Part II: Local Regulation of Wireless Facilities 27

28 Control the Drafting Process Try to avoid using anyone else s standard form Wireless carriers standard forms are unbelievably lopsided Wireless carriers can and will take advantage of you if you aren t careful Developing and using a standard form saves time and helps avoid overlooking issues 28

29 Premises & Grant of Authority Include an exhibit with legal descriptions, drawings and/or photos. The more detail you have, the easier it is to police the agreement, especially regarding illegal collocations and subleases. Use of common areas and access points. Control signage. 29

30 License/Lease Not Easement Granting an easement may be granting others access to same property. License is all the legal authority a wireless carrier needs. Lease structure is also an acceptable alternative (but grants exclusive use, not shared use). 30

31 Term For general leases, define term and renewal options. For wireless sites, typically series of 5 year terms 20 to 30 years total. Strategic decision re auto renewals or affirmative notice required. If notice is required, keep a database of renewal dates. 31

32 Term (cont d) Beware of options to lease tying up sites with no guarantee of rent. Avoid long delivery or construction periods for permitting with no rent begin term. immediately and add construction period to overall term days or commencement of construction, whichever comes first. 32

33 Due Diligence Period Limited time in which wireless carrier has to obtain legal clearances and ensure that site works for them. DON T give this time away for free. Be sure to get indemnity for any activities on site by licensee/consultants and require prior consent for any borings; require copies of any consultant reports be provided to you. 33

34 Rent/License Fee Basic fee Collocation fees (or address this later) Late Fees, Interest and Hold-Over fees Late fees are what you can get. Interest limited by law (be sure to include savings clause to avoid usury claim). Hold-over rent should be in the range of 125% to 150% of then-current rent. 34

35 Wireless Site Base Rent $1.8k per month to $5K + per month, paid in advance. Offer a direct deposit option. Carriers typically offer low escalators e.g., 15% every 5 years Try for 4%. Consider CPI with a floor of 3.5% and ceiling of 5%. 35

36 Assignment Require landlord approval Wireless carriers usually want to be able to shift sites to related corporate entities without landlord approval. Beware of assignments to affiliates, tower operating companies. No release of original entity 36

37 Assignment or Subletting No sublicensing without permission. Have licensee waive rights under Cal Civil Code , / 47 U.S.C regarding collocations does not affect contractual restrictions Licensor may refuse to consent to any proposed sublicense that involves the collocation of another carrier s facilities. Additional rent for sublicensees. 37

38 Interference Ensure that you do not cause any challenges for any existing tenants. Ensure that subsequent tenants/collocators do not cause interference. Burden is on newcomers to cure interference caused by their arrival (not existing users). Be sure licensor/landlord is not responsible for interference or cure. 38

39 Improvements Detailed plans with prior approval Do not agree to approval not be unreasonably withheld, delayed or conditioned Control appearance of improvements All work by licensee shall be performed in compliance with applicable laws and ordinances Licensee is not authorized to contract for or on behalf of licensor or impose any additional expense 39

40 Improvements & Utilities Be sure improvements will be maintained and upgraded to comply with laws, but any new installations must not be heavier, greater in capacity or more space than originally granted Licensee pays for utilities; licensor/landlord not responsible for any interruptions Do not agree to allowing licensee to use your electric connection with a submeter. 40

41 Removal of Improvements Think about how to handle this may depend on facility type Immediate ownership (e.g., of light pole) Automatic conveyance of ownership to licensor Option for licensor to retain improvements or require removal Require removal of footings and foundations 41

42 Technical Standards Licensee agrees to comply with all applicable governmental laws and regulations and with such technical standards as may from time to time be established by licensor for the premises, including, without limitation, technical standards relating to frequency compatibility, radio interference protection, antenna type and location and physical installation. 42

43 Limit Access (Think Post-9/11) 24 hour notice Escort Emergency conditions for access 43

44 Access Rights/Security If installation on roof, limit access to certain specific areas; require your roof contractor to approve; avoid roof penetrations which may invalidate roof warranties; limit cabling access to common shafts Limit size, weight and frequency of access to roof If installation across private or limited access land, limit access and protect fencing, private or municipal property or animals Put burden to maintain secure fencing on licensee 44

45 Events of Default / Termination by Licensor Non-payment Habitual late payments Violation of any term, including non-permitted collocations Bankruptcy 45

46 Termination by License Carefully define when licensee can terminate. Wireless carriers want ability to terminate for technological, economic, or environmental reasons. Either prohibit volitional terminations or require payment (e.g., rent for remainder of term or months of rent). 46

47 Casualty/Insurance/Indemnity Make sure to run by your risk assessment folks. Typical insurance is general liability, auto liability, employer s liability, all-risk property, and workers comp. Make sure insurance requirements apply to contractors and subs. Don t accept reciprocal indemnity. 47

48 Taxes Make sure it is clear that taxes due are in addition to rent. Address possessory interest tax (Revenue and Taxation Code 107.6) liability for licensee. 48

49 Notices All notices, requests, demands and other communications to be in writing and delivered to specified addresses Make sure to have your counsel copied. 49

50 Quiet Enjoyment, Title and Authority Traditional obligation of the landlord. Make sure you have authority i.e. make sure such use is permitted under your governing documents. 50

51 Hazardous Substances Strict language to prohibit any such uses. Batteries for back up and generators can trigger these terms. Check with your environmental folks for most recent terms pay special attention that these substances do not prejudice your ability to use the site. 51

52 Miscellaneous Attorney fees Entire agreement No liability for broker/agent fees Governing law and venue Severability 52

53 Miscellaneous (cont d) Mortgage subordination Limitation on liability RF signage and notices Amendments No relocation assistance Time IS OF THE ESSENCE 53

54 Selling Your Wireless Leases Numerous tower operators seeking to buy landlord lease rights. Typically offer fraction of NPV of lease payments. Will emphasize threat of nonrenewal, certainty of being paid. May ask for amendments allowing unlimited collocations. 54

55 55

56 Contact Information Joseph Van Eaton Best Best & Krieger 2000 Pennsylvania Avenue N.W. Suite 5300 Washington, DC Phone: (202) Fax: (202) Cell: (202) Website: Gerard Lavery Lederer Best Best & Krieger 2000 Pennsylvania Avenue N.W. Suite 5300 Washington DC Phone: (202) Fax: (202) Cell: (202) Website: