Rooftop antenna sites: a primer for owners.

As cellular phones, pagers, and multiple forms of personal communications systems have become a major component of everyday personal life as well as business life, landlords and owners find themselves with a valuable asset - rooftop antenna space, and sometimes other areas of their properties, that are suitable as locations for antennas and related transmitting equipment.

In a city like New York, where telecommunications providers compete aggressively with one another a favorable antenna location can be a critical component affecting the providers' ability to provide competitive quality service at a competitive price. Because of the intense level of the competition among telecommunications providers in the New York metropolitan area, New York landlords frequently find themselves being approached with respect to the leasing of their rooftops.

Given the unique characteristics of rooftop antenna use and the equipment involved, there are a number of issues and areas of critical concern that landlords must recognize and to which they must be sensitive. The following abbreviated case study points out in a question and answer format some of the major areas and basic issues landlords need to consider and address.

When entering into an agreement governing the use of a rooftop or other building area for wireless transmission through the air waves each case needs to be viewed in light of its particular parameters, consequently we have approached these issues in a way that suggests general guidelines and options a landlord should consider.

Our intent is that our case study and Q&A will serve as a primer for landlords to help them understand their options when telecommunications companies come calling.

Case Study

Two companies have agreed to pay one and a half billion dollars for the right to the airwaves for their wireless networks in the New York metropolitan area. Having spent that kind of money for the licenses to the spectrum, they are now approaching landlords for the right to place their antennas on roofs or other parts of private property.

Questions & Answers

Q - Who are the companies?: Traditional cellular companies - ATT Wireless (formerly Cellular One); NYNEX-Bell Atlantic Mobile. PCS companies - Sprint Spectrum L.P., Omnipoint Corp., and Nextwave Telecom. Paging companies like Nextel and microwave services like Winstar.

In many cases, landlords will be approached by middlemen who are agents for the major telecommunications companies. They have no signing authority and are more like brokers or finders than company representatives. However, they tend to represent one particular company or client and have more knowledge of that particular client's requirements.

Q - What is the difference between PCS and cellular?

PCS is a purely digital service, meaning it has greater capacity and clarity. It consists of smaller cells and will consequently require more antenna sites.

Q - What are the rents being charged? The range for rooftops is $1,500 to $2,500 per month, with prime Midtown locations going for much more. Some companies will pay in advance for a year.

Q - How long are the leases typically? Generally, five years with three or four five-year options.

Q - What is the equipment being placed; how much equipment; where does it go; what kind of access is needed?

The equipment consists of one or more antenna arrays on a roof, with wiring from the roof typically to a basement room of 200-300 square feet. The companies generally seek 24-hour access in case of service disruptions and repairs.

Q - What about the health issues?

These are generally low power antennas and are within the health standards issued by the federal government. Cell sites function from 0 to 100 watts per channel, not much more than a light bulb.

Q - What about direct broadcast dishes?

The FCC has ruled that all local building regulations or local zoning requirements are preempted or voided to the extent they impair or prevent a viewer from receiving signals from a DBS antenna. The FCC is conducting a rule-making to decide what rules to apply to owners of rooftops such as landlords.

Q - What special terms should landlords be prepared to consider and evaluate?

The right of the telecommunications company to terminate prior to the end of the lease or license. Also, the right of the telecommunications company to sublet its space or antenna.

Conclusion

Landlords are presented with the opportunity to turn dead space into "rooftop revenue." As a marketing concept, the new technologies on site may be leveraged into value-added services for existing tenants. Landlords can take advantage, if they are properly counseled and familiar with the concepts, of the rollout of new technologies and new competing telecommunications networks.

By David E. Bronston and Steven E. Friedberg Of Counsel and Partner Lowenthal, Landau, Fischer & Bring, P.C.