Wireless Revolution Spells Opportunity

Wireless Revolution Spells Opportunity

By Carolyn Hirschman
Contributing Writer

From water tanks to church steeples, wireless carriers have found a variety of places to put antennas and other equipment needed to run their ever expanding telecommunications networks. Now state governments are cashing in on the wireless revolution by leasing their highway rights of way and other property.

As the number of subscribers rises for cellular, personal communications services (PCS) and other wireless services, so does the number of antennas needed to transmit the low-power radio signals that carry the calls. A specialized real estate niche, called wireless antenna siting, has arisen to meet the need.

In general, carriers seek to place antennas on building rooftops and sides, highway rights of way and other locations - anywhere that's needed to provide an uninterrupted signal as callers move about.

Equipment varies in size and shape and includes round dishes 1 to 2 feet in diameter atop 6-foot poles and 12-by-20-foot prefab shelters with several panel antennas.

Although privately owned buildings hold the vast majority of wireless antennas, governments at all levels are starting to seize opportunities to carry them, too. It's a competitive business, though, and most public entities are behind the curve, said local wireless experts.

"Most government agencies aren't as organized as they should be on this issue. They're missing out on an excellent opportunity for revenue and to develop their own wireless communications network," said Varinia Paige, Bell Atlantic Mobile manager of project implementation for the Washington area.

Added Chris Doherty, a spokesman for AT&T Wireless: "In Maryland and Virginia, the one word I would not use is convenient. We use state property as a last resort. The states typically take longer to deal with, but sometimes they're the only choice."

States are often burdened by time-consuming laws, rules and procedures that don't apply to the private sector. As a result, they sometimes lose business to private landlords who can strike a deal faster.

More than one wireless company has walked away from a negotiation with the state of Maryland because "we couldn't move quickly enough to meet their building schedule," said Ed Ryan, director of wireless communications for Maryland's Department of Budget and Management.

For example, AT&T Wireless offered to rebuild a crumbling tower owned by the University of Maryland on Route 29 in Burtonsville, said Doherty. But the university resisted, the process dragged on, and AT&T ended up leasing nearby private land from a farmer. The company built a new tower - 50 feet away from the state's site.

That's not to say the public sector hasn't made progress. The General Service Administration's wireless siting program could generate $1.5 billion for the federal government during the next few years, said CTIA spokesman Tim Ayers.

On the state level, the Virginia Department of Transportation and Maryland are considered leaders in wireless real estate deals.

Bell Altantic Mobile cellular antennas are the three vertical bumps at the roof line, top left, of this Alexandria, Va., building. They've been painted and placed to blend in with the architecture of the building. This is a typical "surface mount" installation.

So far, VDOT has leased about 40 sites, including about a dozen in Northern Virginia on Interstates 95 and 66 and other locations, said Richard Bennett, assistant director of right of way and utilities. Bell Atlantic Mobile, Cellular One and Sprint PCS, among others, are using lighting towers, overhead signs and roadside video cameras, often to collocate their equipment with VDOT's, he said.

"They approached us. We have not put out a solicitation," Bennett said. "Once we came to a business understanding [in six to nine months], sites were developed fairly quickly," in less than 60 days, he added.

VDOT has collected about $80,000 since the program began last year, Bennett said. Specific leases vary, but the basic starting agreement is for companies to pay a total of $70,000 for the first 10 years, then $12,000 per year after that.

The process is not so easy at other Virginia agencies. As in many other states, each agency negotiates its own leases according to state policy and law.

The Department of General Services reviews all leases and plans and issues permits. A Virginia real estate division employee said she had no information on the number of wireless antennas or revenue generated by these leases.

Maryland, in contrast, brings all wireless leasing activity under one authority, the Department of Budget and Management. This organized approach has helped the state sign 16 to 18 agreements with various wireless carriers for sites such as building rooftops, highway lighting poles and free-standing poles in state parks, said Ryan of the state budget and management office. Previously, each state agency handled its own arrangements.

"We were one of the first [states] in the country to have a program like this," he said. Initially, Maryland offered rights of way along state roads for underground fiber optic cable; it issued a request for proposal for wireless sites in July 1995.

Maryland's wireless siting program has enjoyed moderate success, bringing in about $1.6 million since inception for the state's Information Technology Investment Fund, which funds information technology projects by state agencies.

Still, "we had hoped to generate more revenue," Ryan said. The main stumbling block is the relatively lengthy negotiation process. "It takes a while because there are provisions written in [state] law we can't get around. The companies don't like it," Ryan said.

For example, Maryland has a unilateral right to terminate contracts. In addition, all leases must be approved by the Board of Public Works, which has never rejected a deal but has slowed them down by raising questions, Ryan said.

For some states, the wireless real estate business is best left to others.

A coalition of six New York agencies, for example, outsourced the whole shebang to a tower manager - Crown Communications of Pittsburgh - in October. The goals are to control proliferation of wireless antennas on state property while ensuring New York gets the best deal on the sites it does lease, said Tom Campbell, a project director for the New York State Office for Technology.

Under the program, Crown inventoried about 300 state property sites and will handle all marketing and leasing activities and costs. New York will get 30 percent of revenues for newly built towers and 50 percent for antennas erected on existing property.

The wireless siting program has attracted "immense interest" from other states, including Florida, Nevada and Washington, Campbell said.