Video is the largest technology difference spurring wireless infrastructure growth over the last several years, according to Jason Caliento, executive vice president of network strategy at Mobilitie. That is not surprising, considering that every grandparent expects a daily update on junior on his or her cell phone, and teenagers now routinely watch feature length movies on their phones. Caliento creates partnerships with cities, venues and carriers to design and build advanced wireless solutions that can handle this traffic.
Mobilitie owns, operates and has deployed billions of dollars’ worth of wireless infrastructure, making it the largest privately held owner of wireless infrastructure and one of the largest wireless service firms in the United States.
Increasing consumption of video and other high-bandwidth applications led Mobilitie to focus on finding how to participate in that the heterogeneous network of towers, small cells, in-building wireless systems and fiber-optic cable routes that connect wireless devices with the internet, Caliento said. He spoke at the AGL Local Summit in Newport Beach, California, on Jan. 24.
“As the iPhone developed and as our use of Netflix and other video-based applications continues to grow, wireless carriers faced a big problem,” Caliento said. “It is important for our business and our strategy to participate in the entire wireless infrastructure ecosystem to ensure that customer requirements are taken care of seamlessly.”
Mobilitie owns the distributed antenna system (DAS) network at Arrowhead Stadium where the Kansas City Chiefs played the Indianapolis Colts on Jan. 11 in a divisional playoff football game. “The traffic on our DAS in the last couple of minutes of the game was all upload,” Caliento said. “Fans wanted to show that they were at the game and wanted to send video highlights. That is an example of how we interact with devices and social media.”
Towers Still Have Value
Even with growth in DAS and small cells, Mobilitie continues to build telecommunications towers. Caliento said towers offer the most efficient way to deploy broadband wireless services. He said that rural areas especially rely on towers for network services, including backhaul. Some challenges include accessing adequate construction capital and making sure multiples are in line, he said, adding that good towers always will have value. “Multiple” refers to a number used to multiply a tower’s cash flow to establish the tower’s value. Higher prices for towers imply higher multiples.
DAS remains a robust business for Mobilitie, Caliento said, although it presents different challenges than it did a few years ago. He said the challenges come with fans wanting to upload and download information and with the use of virtual reality video applications. Meanwhile, the wireless carriers find that they are unable to fund all of the DAS development, Caliento said. Outside of large public venues that are fairly unique, he said, DAS development includes commercial buildings and large public spaces.
Whether landlords pay for DAS equipment and installation comes down to what Caliento called nuanced deal-making based on specific needs. “Most enterprises today have a rise of mobile work applications,” he said. “They want their people to be enabled with really good cellular reception. Many enterprises will ask for in-building wireless service as a condition of a lease. When that happens, you will see more DAS development flow from enterprise demand. How that gets paid for winds up being the question.”
A large player in the small cell business, Mobilitie has built more than 1,000 small cells in Los Angeles and several hundred in San Diego and Santa Monica, California, Caliento said. He said Mobilitie builds small cells throughout the United States, from the largest cities to the smaller cities. In developing small cells, Caliento said what has been successful for Mobilitie is collaborating with the cities and making public-private partnerships, especially in the larger cities.
Another step that leads to successful deployment is communicating with city officials about small cell height, location and design early on in the permit application process.
How much cities charge to process permit applications plays a role in how wireless carriers use their capital most efficiently. If the carriers cannot be capital-efficient, Caliento said, their businesses fall apart.
“Mobilitie’s position has always been that application fees and recurring fees for using space in the cities’ rights of way needs to be tied to what it costs the cities,” Caliento said. “When those fees are in line, that’s the right public policy.”
Caliento discussed the small cell order adopted by the FCC on Sept. 26, 2018, that addressed what fees cities may charge. He said that opinions differ on the FCC’s position. “The dollar amounts the FCC specified may be proper for some cities, but in other cities, that’s not the case,” he said. “The fees need to be higher because the city’s true costs of processing are higher.” Mobilitie, he said, pays the fees when it is clear that they are in line with the cities’ costs.
Early Communication Is Key
Caliento said Mobilitie has achieved success by ensuring early communication with city officials about permit applications and the payment of fees. “There are still places where I’m confounded by resistance, where there are cities that resist even the notion of outside investment,” he said. “But that is a smaller and smaller population each year that we do this.”
Sometimes resistance comes from a specific leader, Caliento said, or from a specific group that is vocal. Mentioning Southern California because he was speaking in Newport Beach, he said the region has communities with robust business environments, and they clamor for advanced services from wireless carriers. He said resistance is what led the carriers to push the matter with the FCC, resulting in the small cell order.
“We will see it play out in the U.S. Court of Appeals for the Ninth Circuit,” Caliento said. “But in terms of bringing this back to the business fundamentals, we’ll be committed to building small cells throughout the United States in partnership with the cities.”
The next two AGL Local Summits are scheduled for Sept. 26 in Washington, D.C., and Nov. 14 in Dallas. Visit www.aglmediagroup.com/localsummits