Who Should Pay for In-Building Wireless Connectivity?
By Tom Leddo
Traditionally, wireless operators would build cellular networks that covered the overwhelming majority of the places that their subscribers live, work and visit while these same subscribers would frequently switch to private Wi-Fi networks at home, coffee shops, hotels and other places to lower their data charges or when the cellular network was congested. There were few in-building “cellular” systems.
The occasional exception would be a third-party Distributed Antenna System (“DAS”) system in a stadium, arena or other large venue such as a shopping mall that was installed and managed by either an operator, a venue owner or a third party that charged operators access to the DAS.
However, the exponential increase in demand for wireless data is now causing this traditional model to evolve. Cellular operators are racing to deploy DAS systems in large venues as fast as possible but these systems are expensive, often well in excess of $1 million. While this capital outlay makes sense for a Super Bowl stadium, campus environments or other high profile facilities, the economics simply do not work when scaled across multiple facilities, particularly office buildings and multi-family residential. And, while the still developing metro-cell and small-cell technology will make many more deployments more economical, it is still not yet serving as a single solution for all facilities that are beginning to have capacity issues. The economics of a small cell system are not yet fully developed but it is becoming apparent that it will work in some, but not all, buildings. And even if it did, the operators simply cannot build out every sports arena, concert venue, hospital, hotel, tourist area, office building (both large and small) and apartment complex in time to keep pace with demand.
Four General Categories for In-Building Coverage
Generally, the facilities that need in-building coverage fall into four categories.
- Large venues such as stadiums arenas and campus environments.
As mentioned above, there are certain venues that wireless operators are just going to build-out such as a football stadium that is hosting the Super Bowl. While it is not accurate to say that cost does not matter in a venue of this type, carriers are going to spend what is needed to make sure they have the capacity needed to make events at these types of venue seamless. There is no way a major operator that often sponsors events at stadiums and arenas is going to let tens-of-thousands of customers have a negative experience due to lack of capacity in an arena where they often even own the naming rights.
These are covered with a neutral host DAS. One carrier or a third party will build out the DAS with other carriers joining to share the network with some sort of cost sharing or other financial arrangement.
DAS networks of these types are common in facilities ranging from large stadiums and arenas to large office buildings and shopping malls.
Who Pays: – Typically the cellular operators pay either directly or through a recurring payment to the owner of the DAS system. However, some venues still have their own self-funded Wi-Fi installed as well.
- Large and medium-to-large buildings.
One step below the large venue, where providing enough capacity is a business necessity, are large hotels and office buildings where operators certainly would like to offer in-building coverage but simply may not have the time and/or budget to get to all of them. They will get to them if and when they can.
The challenge with buildings of this nature is that there are just so many of them. The owners and operators of these buildings realize they have capacity issues that may be affecting their customers and tenants.
Operators that are facing capacity issues do not need to build them all at this time. If an operator is having capacity issues in a particular area of town, they can build out a handful of in-building systems in the area and thereby reduce capacity on the macro network. The remaining buildings will need to either survive off of the existing macro coverage and/or install their own private Wi-Fi system.
Some of these buildings may in fact be large enough to justify a DAS installation. Others may be good candidates for the rapidly evolving small cell systems that can be installed for less money. But if the building owners know they need to improve connectivity and have no visibility into an operator’s build plan, they may opt to take measures into their own hands by developing a more robust, private Wi-Fi network.
They are faced with either waiting for the operators to come or building it themselves. And in a world where connectivity is now the fourth utility, they are finding it harder to wait.
Who Pays: – The operators do in some cases; the building owners do in others.
- Medium and small buildings
This category includes medium to small office buildings, apartment complexes, retail, restaurants, etc. They are starting to see the need for connectivity beyond that provided by the traditional macro network.
For example, the Md7 office in San Diego is on the third floor of a three story, 75,000 square foot building that overlooks the I-5/I-805 “merge” with 10 lanes of traffic. We are also next door to an apartment/condo complex with several hundred units that were recently constructed. We have seen a significant drop in bandwidth in the last year but our building is simply not large enough to justify an operator installing a DAS and we are probably several years away from an in-building small cell. Hopefully we will get a few adjustments to the macro sites near by, particularly as the new apartments begin to lease-up. In the meantime, we have to closely manage our Wi-Fi.
A second example is a new, fairly large, trendy restaurant and bar in downtown San Diego that was built in a very old, historic building where there was no 3G or LTE coverage available. While on a recent date night with my wife, the server gladly offered us the restaurant’s Wi-Fi password so we could post and tweet photos of our food and tell the world how much fun our date night was in their restaurant. Social media is key to driving their business and the new reality is that if people can’t use their smartphone in an establishment, they’ll leave.
While in both of these examples, the renting tenant is paying for Wi-Fi, many building owners are starting to acknowledge connectivity as a utility and are funding it themselves to keep their tenants satisfied.
Who pays: The building owners and/or their tenants.
In 2009, I bought a new Femtocell device from my cellular service provider. My family had noticed that we had begun having problems connecting to the network and calls were dropping more frequently so I swallowed my pride and paid $250 to solve my carrier’s coverage problem. I expected to get maximum “bars” in my house easily and seamlessly. But my experience was far from plug and play. Actually when I called the carrier’s help desk they said something to the effect of “oh it doesn’t work with data plans yet. You’ll need to turn off the data portion of your Blackberry each time you walk in the house.” I promptly packaged it back up and returned it to the retail store.
Since that time two things have changed, I no longer use a Blackberry and my high hopes for a private femtocell in my home have dissipated. But Apple has solved both of those problems for me. I replaced the Blackberry with an iPhone and my femto with an Airport Extreme. I even solved my extended coverage problem by buying an Airport Express to stretch the Wi-Fi to the back of the house and backyard. I rarely make traditional phone calls at home; I generally text, post and use FaceTime. All of which are easy on my apple devices and free over Wi-Fi.
Who pays: The resident of course.
Wireless operators are obviously enhancing capacity with the largest venues first and then working their way down from there. But it is simply not realistic to expect them to completely underlay their entire macro network with a variety of microsites, aka the HetNet.
Even if they could reach every building, the capital expenditure required would be enormous and the operators already have to learn to operate in a new environment of 100% penetration and intense price competition.
The insatiable demand for bandwidth by smartphone users will not cease.
Building owners need to consider the reality about the new “fourth utility” – connectivity. Whether residential or commercial, tenants and customers within these buildings will continue to demand connectivity and begin to factor it into their decision about where they choose to live, work, shop, eat and all other daily habits.
Connectivity is now an expectation. We need to develop connectivity everywhere and, if not, consumers will begin avoiding the areas that don’t.
If you do not build it, they will not come.
Is there a doctor in the house…or a smart phone?
By Harry Kapp
My friend who lives alone recently had some surgery and spent the weekend with my family after her surgery so as not to be alone. Over the weekend, she experienced some discomfort and, without going into details, decided to call her doctor. It was the weekend and she called the on-call physician who was covering for her surgeon. I started to get ready to take her to the doctor’s office or the hospital but wait! After a bit of discussion about the symptoms, rather than being told to go to the hospital emergency room to be examined, the doctor asked if a picture could be taken and sent to him. My wife took the picture on her smart phone and sent it to the doctor who only minutes later said not to worry about it but, just to be cautious, he prescribed an antibiotic. Although he was off for the weekend, her own surgeon called as well (to his enormous credit). The photos were also sent to him. He saw the pictures and confirmed the diagnosis.
When I think of the not so “old” days, the only choice would have been to drive 25 miles to the hospital emergency room and wait to be seen. It would have taken hours of time not to mention an uncomfortable drive for my friend and the stress of not knowing what the doctors would find. And there is the additional stress of a hefty hospital and emergency physician’s bill as well.
There are so many uses for smart phones which have become indispensable but I would not have thought of this one. Of course, I jokingly wonder if medical schools will incorporate the use of smart phones into their curriculum. And I’m afraid the health care industry may soon catch on to this and try to charge thousands of dollars for a smart phone diagnosis or “scan” which, after contractual adjustments and insurance, will be $99.
The bottom line is that smart phones have been and will continue to be used in new and different ways that may be hard to predict. In this instance, the smart doctor’s smart phone came to the rescue!
California Governor Signs Legislation Aimed at Accelerating Wireless Deployments
By Cynthia Hanson
Land Use Counsel
On October 9, 2015, California Governor Jerry Brown signed Assembly Bill 57 (“AB 57”) into law. As you may recall from the July edition of the Md7 Communique, AB 57 will put teeth into the FCC’s Shot Clock Order of 2009. Beginning January 1, 2016, if a city or county does not timely approve or disapprove a wireless facility siting application, the application will be deemed approved by operation of law. The new law will not apply to projects located on fire department facilities or those eligible facility requests covered by Section 6409.
As to be expected, AB 57 was supported by the wireless industry, with significant opposition from various municipalities, local agencies, and related advocacy groups. The full text of the new law can be found here.
How will AB 57 work? For modifications and collocations that do not qualify as an “eligible facilities request,” cities and counties must approve or deny a wireless siting application within 90 days of submittal. For new builds, the city or county will have 150 days. Upon the expiration of the applicable review time period or “shot clock” and, so long as you provided all required public notices of your application, you then must notify the city or county in writing that their review period has passed and your proposed modification or new build is “deemed approved.” After that, you pull your permit and begin your build. To stop your build or otherwise challenge the “deemed approved” status, the city or county will need to file a lawsuit within 30 days from the date of your letter notifying them of the deemed approved status.
There are two ways these review timeframes can be extended. First, if you do not submit a complete application package and the city or county timely requests the missing information, the review timeframe will be extended by the amount of time it takes you to get the requested information to the city or county. The second way the review timeframe can be extended is if you enter into a written tolling agreement with the city or county to extend the review period.
Eligible facility requests were specifically carved out from AB 57 and remain subject to the 2015 FCC shot clock of 60 days for review of minor modifications to existing sites. For sites not in the ROW, an eligible facility is defined as a modification that does not result in an increase of more than 10% in height or the height of an additional antenna array plus 20 feet, a modification that does not protrude from the edge of the tower by more than 20 feet, a modification that does not involve the installation of more than 4 new equipment cabinets at an existing site or a modification that does not involve excavation or deployment outside the current leased/owned area. To read more about the approval process for eligible facility requests and qualifying sites within the ROW, click here.
Many cities and counties will revise their codes and procedures to comply with this new law, although it remains to be seen which jurisdictions will do so before the New Year. Some cities and counties may choose to ignore the requirements of AB 57 and challenge the law in Court where these municipalities will hope to win relief from what they view as an illegal power grab.
As with any new law, you can expect a period of confusion about how to implement the new requirements and even different treatment among jurisdictions. It will be important to do your research and know the applicable requirements before submitting your siting application so you can make the best use of this new law.
In summary, you must do the following to obtain the deemed approved relief provided by AB 57:
- Submit a complete application package.
- Comply with all public notice requirements.
- Wait the applicable review time period – 90 or 150 days, if no extensions are agreed to – for approval or denial.
- If no response is received, notify the city or county in writing that the review time period has passed and your application is now deemed approved.
- Pull your building permit and proceed to build.
To make it easier to enforce a deemed approved resolution of your siting application, keep copies and get acknowledgement, if possible, from the city or county of your submittal date, all public notices, and of your deemed approved letter.
As cities and counties adjust their processes and procedures to reflect the new “normal” of this law, let’s hope that this law accomplishes its underlying purpose of truly accelerating wireless siting approvals in California.
What does the name “Md7” Mean?
By Tom Leddo
We get asked a lot “where did the name Md7 come from?” or “what does the name Md7 mean?”
Well before we answer that question, let’s countdown the top five things that are not related to our company name.
- We are not “seven doctors” – That would be “7 MD’s”
- We do not manufacture Cosmeceuticals – That’s “MD-7”.
- We are not located on Maryland Route 7. – That’s “MD 7”.
- We do not manufacture an Ultra Long Excursion High Power Dual 18″ Subwoofer – that is JBL.
- We are not “Moorish Delta 7” (aka MD7) – the UK Hip-Hop group from Birmingham, England.
Actually, the name comes from the initials of our Founder and CEO, Michael David Gianni, or MDG. But the “G” was changed to “7” because it is the seventh letter of the alphabet.
Eric LeVine, the graphic artist who also designed our logo came up with the name. Michael and Eric were friends who had taken a number of annual surf trips together along with several other friends that met at San Diego State University.
Michael approached Eric to create a logo and business cards, as he was about to incorporate the company but told him he was still working on the name. Shortly after, Eric sent Michael a draft of the logo. Michael really liked the logo but even he didn’t understand the play on his initials at first. Eric had to explain it to him too.
Quite often we get asked about the meaning of the name “Md7” from new employees on their first day on the job. Aaron Rodrigo, a Project Manager who focuses on the D-A-CH Region of Europe and works in our office in Dublin, Ireland recently emailed Md7’s CEO, Michael Gianni, with the following.
I would like share a funny story with you guys. You know that our office is in the post code area number 7 of Dublin, right? This area has a reputation as a traditional Irish working class neighborhood. We had an induction day recently for our new starters, and one of my questions was what the name “MD7” stands for. I was hinting that it is relating to the name of our CEO, Michael D. Gianni. One of the new guys was instantly saying: “Ah of course, yes that makes total sense”. I was surprised by that confident, quick response, so I asked him to explain himself.
His answer: “Well, it must stand for Michael from Dublin 7”.