Tower Companies Growing During Pandemic, WIA Told

U.S. carriers have kept up with unprecedented demand under COVID-19, American Tower CEO Tom Bartlett told the Wireless Infrastructure Association’s ConnectX virtual conference Tuesday. The conference's goal is to help explain what’s happening “on the ground” during the pandemic, said WIA President Jonathan Adelstein. “Everybody recognizes how essential having reliable wireless service is.”

“Washington is divided like we’ve never seen,” but everyone agrees the U.S. must lead the world on 5G, Adelstein said. Despite gridlock in Congress, there’s “bipartisan support for making sure that we get broadband to unserved areas” and on “eliminating unreasonable barriers to 5G,” he said. More than 30 states have passed infrastructure legislation, he said: “All of this is ushering in a great year of 5G investment.”

“We are all depending on these networks ... in ways we could not have imagined,” Bartlett said. He welcomed T-Mobile’s expansion since its buy of Sprint and the launch of a Dish Network's fifth-generation network: “All of this opens up more opportunity for our industry.”

American Tower operates 41,000 sites in the U.S. helping the company “cater” to the 450% increase over the past five years in data use by the average smartphone customer, Bartlett said. “5G is the next frontier” and will require spectrum across the RF, he said. With C-band and citizens broadband radio service auctions slated for this year, he's “confident that the carriers will have significant spectrum available.”

Traditional cell towers will continue to be “the most cost effective” way of reaching consumers “in the vast majority of the U.S.” and most towers have capacity to expand attached facilities, Bartlett said. “The FCC has made great strides toward ensuring that macro-towers remain the cornerstone of America’s wireless networks,” he said. Bartlett welcomed additional changes to infrastructure rules proposed for the June 9 FCC meeting (see 2005190058).

Tower companies are unique in not having significant effects from the pandemic, Wells Fargo’s Jennifer Fritzsche said during a panel. Delays in T-Mobile’s buy of Sprint slowed investments, but the deal is now complete, she said: “We are very bullish on the back half of the year.” Verizon increased capital expenditure spending by about $500 million for the year, tied to COVID-19, she said. AT&T “was a little bit more cautious, slightly delaying their 5G launch” and “has a lot of pulls” on its spending, she said. T-Mobile will “go guns blazing,” she said.

Cowen’s Colby Synesal said tower companies had a slowdown starting last summer. “The hope is we’ll see leasing start to accelerate in the back half of this year, largely on T-Mobile” investment “and that should drive an acceleration in the revenue growth,” he said.

The pandemic affected venture capital, and investments slowed, said Abhishek Rampuria with M/C Partners. Of sectors the firm is looking at, it’s probably “most comfortable” with infrastructure companies, he said. “This is a long-term business model, a sustainable business model, and … performs very well even in crises."

“5G is here,” said Ericsson North America CEO Niklas Heuveldop. “It’s no longer hype or a vision. … We need to come together as an industry to really accelerate the buildout.” Despite making C-band and CBRS spectrum available this year, “the U.S. is still behind global peers,” he said.

Ericsson is “optimistic” about the CBRS band, and expects deployments by mobile virtual network operators, wireless ISPs, cable operators, and business and neutral hosts, Heuveldop said. It's encouraged by the FCC 900 MHz order, he said. “The newly reconfigured 900 MHz band will help support existing LTE networks and new 5G networks, enabling a broad range of use cases."

State, Local Impact

States are unlikely to act on 5G small-cells bills near term due to the pandemic, said local and wireless industry officials. They said the coronavirus is forcing industry and governments to find new ways to work together at the local level.

Small-cells legislation isn’t likely to move “in the immediate future,” but state lawmakers are keeping the issue alive as they discuss parallel issues including rural broadband and distance learning, said WIA lobbyist Roxanne Gould, predicting California and other states will return to small cells after the crisis. NATOA General Counsel Nancy Werner agreed such bills will be delayed. When things get better, she expects legislators to demand that bills include buildout requirements or sunsets so industry has incentive to build immediately.

SBA Communications hasn’t had “any notable delays” upgrading towers or constructing new ones, said Zoning Litigation Manager Victoria Weidenthaler. Many municipalities are accepting filings online and offering other flexibility, she said. Some states stayed permitting timelines, and industry has been sympathetic to local governments on shot clocks, she said. "This is probably a time for more flexibility than we typically may have.”

The pandemic raised new issues for local zoning approvals, said Werner. Some local codes required application OKs be signed physically, and changing that rule required public meetings, she said. While needing time to adjust, many states and cities found ways to allow virtual meetings and adjust other policies, she said. Local governments could use stimulus funding to help their employees meet shot clocks for siting applications while working remotely, she said. With the pandemic increasing municipal costs, state and federal caps on application and other fees rules hurt more, said the NATOA official. “$270 isn’t going to cover it.”

With state budgets “hemorrhaging,” investing in rural broadband mightn't be “front of mind” for legislators, said Gould. “Right now, they’re talking about cuts,” she said. “The conversation will continue but not at the speed or depth that it was.” States could spread broadband by eliminating municipal preemption, at least to allow public-private partnerships, said Werner: Some communities have money for broadband but don’t want to run networks.

ConnectX Notebook

Millimeter-wave spectrum has a role to play in 5G, said Neville Ray, T-Mobile president-technology. “We've deployed material mmW in several markets now,” he said, in response to our question: “We see mmW as the top layer of the necessary spectrum layer cake -- primarily for use in urban areas and dense urban. It's just not great coverage spectrum.” T-Mobile has deployed more than 20,000 small cells, using high-band and other spectrum, he said. COVID-19 has had only “limited impact” on the carrier’s 5G build “but we are working with health and safety as our primary concern,” he said.

With FCC approval for its terrestrial network in hand (see 2004200011), Ligado is focused on rolling out terrestrial services and enhancing its mobile satellite service (MSS) network for IoT, CEO Doug Smith said. He said that involves deploying technology to support IoT devices so they can move seamlessly between terrestrial wireless and its MSS network, and working with IoT device makers on devices that can switch between the networks. He said his firm will work with companies like Nokia, Ericsson and Qualcomm to make its spectrum standardized for 5G. He said Ligado will offer an industrial IoT network that can be purpose-built and customized for users, and have a “spectrum partnership” with carriers, complementing existing wireless networks.

COVID-19 is increasing FirstNet usage, said CEO Edward Parkinson in a prerecorded keynote. It’s good public safety has a separate network, with commercial networks more constrained by teleworking and other things, he said. Hundreds of ambulances from outside jurisdictions entered New York City and were able to communicate with each other over the network, Parkinson said. 911 dispatchers in Alexandria, Virginia, use FirstNet to work from homes, he said. Many 911 call takers can’t work remotely (see 2003180033). Agencies are equipping mobile emergency operation centers with dispatching, Parkinson wrote in response to our question in a live chat. Raymond James analyst Ric Prentiss asked about reports people are attacking cell towers due to their belief that 5G and COVID-19 are connected (see 2005150022). “It's a complicated issue ... that will need the industry to come together to work on” to educate the public, replied Parkinson.

While it's early days, 5G benefits Verizon customers, said Heidi Hemmer, vice president-technology. “We’ve continued to build on what we learned” since the first launch in 2018, she said. The pilot provided “deep learnings” on the use of high-band spectrum, she said. Verizon is “encouraged by the pace of development in the industry,” she said. The company has 5G in 30 cities, she said. "Seeing nearly 2 Gbps download speeds is simply remarkable” and they will continue to improve. Such spectrum “can and does deliver a reliable, differentiated experience” and “is not just 4G capacities repackaged,” she said.