Monday, June 6, 2011

The Impact of Tower Revenue Projections on Private Landlords

An article was recently published at Fiercewireless.com (Towering Revenue Projections for 2011, June 4, 2011) which stated that United States tower companies such as American Tower and Crown Castle were gearing up for an increase in revenue this year. This is a surprise to many in the industry given the fact it was widely accepted that new site builds were going to be significantly lower than in years past due to various factors, most importantly, the merger between AT&T and T-Mobile. In fact, some of our clients were recently informed that leases that were under negotiation had been placed on hold. In addition, we received emails from leasing agents in various markets throughout the country confirming that both AT&T and T-Mobile were not leasing new sites for the near future.


The article explained that the increase in revenue is attributable to the expansion of existing sites as a result of LTE or next generation technology deployments. Tower companies are very sophisticated landlords and purposely negotiated their original leases with carriers to require amendments and accordingly, additional compensation for the right to expand the leased premises and/or collocate additional equipment on the tower. Based on the foregoing, industry forecasters predict that revenue growth from amendments for site expansion and additional equipment will far exceed revenue growth from new tower additions.

Generally speaking, this is good news for our clients as the carrier expansions on tower company-owned structures will also find their way to private tower owners and landlords with carriers on their rooftop. The question then is if your cell tower tenant is interested in placing additional equipment on the tower on your property or on your rooftop, are you entitled to additional compensation? Clearly, if the carrier is looking to expand the leased premises, the landowner’s consent is required and you are entitled to additional compensation. In cases where the carrier is looking to add equipment within the leased premises, the answer is not a simple one. Rather, it depends on the language in your specific cell tower lease. Accordingly, the first thing we always ask our clients do is review their existing cell tower lease and determine if site modifications are covered in the lease. In some leases, site modifications are not covered and therefore, the carrier most likely has the right to add equipment without your consent and without paying additional compensation. In other instances, the carrier has the right to make such modifications, however, they are subject to the landlord’s consent which may not be unreasonably withheld, conditioned or delayed. Some States have interpreted such language to mean that you cannot ask for compensation for your consent. In other States, it means that you simply can’t ask for an unreasonable amount of compensation. In other leases, the language clearly states that the carrier does not have the right to make the modifications under the existing lease and the landowner may deny the consent in its sole discretion. Accordingly, the landowner may demand additional money in exchange for providing consent. Unfortunately, we find that in most cases when a landowner is approached to consent to site modifications, the carrier does not provide sufficient details about the proposed modifications nor do they offer compensation or justification for the consent. At Cell Tower Attorney, we can review your existing lease and determine what rights or obligations you have regarding a request for a site modification.

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