THE MOBILE-PHONE AND TOWER SECTORS could take a significant financial hit as a result of a new Federal Communications Commission mandate requiring backup power sources at key facilities.
The FCC rule, which industry sources claim could cost wireless carriers hundreds of millions of dollars to implement, flows from recommendations of the Independent Panel Reviewing the Impact of Hurricane Katrina on Communications Networks. The FCC softened the blow to industry somewhat by giving carriers six months to conduct inventories to determine which assets comply with the new guidelines and which either do not comply with the backup power rule or are precluded because of safety reasons and conflicts with federal, state or tribal laws. Carriers with wireless facilities covered by the new rule, but not in compliance, must be rectify the situation, or file an action plan within 12 months on how they intend to meet new federal requirements. The FCC said it does not regard the reporting requirements as overly burdensome, but the cellular and tower industries call them brutal.
Difficult mandate to meet
It is even questionable whether compliance is reasonably achievable under terms laid out by the FCC, given physical and practical limitations related to the amount of space at sites and the need to modify structures with cell transmitters. The wireless industry argues roofs of some structures are not tall enough to accommodate requirements of the backup power rule and floors may be unable to support added weight of new generators.
Moreover, the introduction of hazardous materials (gas, diesel, propane, batteries) associated with backup power sources could be prohibited in some leases involving cell sites on private and public property.
Plan of attack
John Vivian, corporate account manager of telecommunications at Caterpillar Inc., said it could be very difficult for cellular operators and tower companies to meet the new FCC backup power rule. Vivian said it could prove far more cost effective for companies with wireless assets to spread the costs through solutions that reduce unnecessary duplication of backup power sources and related equipment.
“It will take a lot of cooperation and innovation and we can do it,” said Vivian, who works with tower companies and cellular carriers and studied their responses to the 2005 hurricane.
New FCC rules, among other things, call for a minimum 24 hours of emergency backup power for assets inside central offices, and eight hours for other facilities such as cell sites, remote switches and digital loop carrier system remote terminals.
There are about 200,000 cell sites in the United States, with tower companies operating about 115,000 and mobile-phone carriers controlling 85,000.
Industry angst
“There’s no incentive in [the commission’s decision] that doesn’t already exist in the competitive environment,” said Christopher Guttman-McCabe, VP for regulatory affairs at cellphone association CTIA. Moreover, he added, “It’s going to be a tremendous paperwork burden.” Cellular operators have a financial incentive to keep wireless subscribers on the air, Guttman-McCabe said.
CTIA and wireless infrastructure group PCIA were among those that petitioned the FCC to reconsider its decision. CTIA is now contemplating renewing a legal challenge to the FCC backup power rule in the U.S. Court of Appeals for the District of Columbia Circuit.
“The burden and costs of compliance are significant,” said Jackie McCarthy, director of government affairs at PCIA. McCarthy pointed out wireless carriers and tower companies could find it difficult crafting arguments on why certain wireless assets are exempted from the 24/8 backup power rule. While the rule itself was published last month in the Federal Register, it will not actually go into effect until the Office of Management and Budget approval is released.
The FCC said the telecom industry has been on notice for a long time that a backup power requirement was in play, particularly in light of the Katrina Panel’s finding that backup power was lacking in many locations after the hurricane made landfall.
“Had we adopted a general power requirement that did not require a minimum amount of backup power, we would have risked creating an illogical and meaningless requirement that would have allowed providers to have only one minute of backup power,” the FCC’s ruling stated. “Thus, parties should have realized that an emergency backup mandate would inevitably include a specific duration requirement.”
