Local permits (building & planning)

For rolling out terrestrial communications networks, including DTTB and MTV networks, transmitter sites are required. This section addresses the necessary permits and authorizations from local governments required to establish and operate broadcast transmitter stations. This section includes the following paragraphs:

1. Economics of rolling out transmitter sites;

2. Instruments to facilitate transmitter site erection;

3. Implementation guidelines.

2.7.1 Economics of rolling out transmitter sites

In any DTTB/MTV network the number of sites is the key cost driver. The broadcast network operator aims to reduce the number of sites in its network design, whilst maintaining the required service levels of service coverage, reception quality and network availability (see also section 4.2 and 4.3).

In turn, considering the cost structure of a transmitter site, the second cost driver is having the availability of a mast or other tall construction. Erecting new transmitter masts tend to be expensive.

Not only for the purchase of a mast, but also the possibly (long) procedure to acquire permission to erect such a mast (i.e. a building permit). The associated costs do not only include the cost of a site acquisition organization but also any delays in service launch and hence cost of capital.

Consequently, the broadcast network operator’s objective is to re-use as many existing sites as possible¹¹⁸. These existing sites can either be own property or third party property. In case of third party property, the network operator will bear operational expenses for site rental fees.

From a network operator’s point of view, having access to and fair pricing of sites is important to keep investment and cost levels down (and ultimately provide a profitable service). However, these third party site owners could be a direct competitor (e.g. the incumbent broadcast network operator

118 Availability of antenna space on a mast is not only determined by the physical meters of free space but also the wind load of the mast, i.e. the mechanical strength of the mast to carry additional wind load.

or the Public Broadcaster) or a commercial tower company¹¹⁹ and they may abuse their position in not granting access or charging unfair prices.

Hence, the Regulator and the local governments do have an important role here to facilitate transmitter site build-up and site sharing arrangements.

2.7.2 Instruments to facilitate transmitter site erection

Regulators tend to intervene in this tower market for the following reasons:

1. Facilitating site sharing and fair pricing;

2. ‘Horizon pollution’: Regulators may like to control the number of transmitter sites and plan the locations of these transmitter sites;

3. Health hazard control: Regulators have a duty to control health hazards for EMC, noise, dangerous goods and mast construction strength.

In pursuing the above objectives the Regulator normally applies he following instruments:

1. Requiring and issuing building permits (very often at a local or regional level): granting of rights to erect new sites to the DTTB and/or MTV network operator;

2. Mandating site sharing rules (at a national level): imposing obligations for network operators (including telecommunication providers and other broadcast network operators) to provide antenna space on their sites;

3. Providing guidelines for and determining site sharing pricing (at a national level): imposing obligations for network operators to charge fair prices for antenna space;

Depending on the relative importance of the Regulator’s objectives a mix of the above instruments is applied. However, an important interaction does exist between the using the instruments of building permits and site sharing rules. Having very strict rules and long procedures for acquiring building permits can turn sites into ‘essential facilities’ (see also 2.6.1) and consequently the need for site sharing rules will increase. Also, strict building permit procedures can hamper, or even make it impossible, for the spectrum license holder to comply with stipulated service/network roll-out obligations.

Building permits

Before allowing the transmitter site to be erected and taken into operation, the (local) Regulator can check compliancy in the following areas¹²⁰:

1. Field strength and EMC, addressing:

a. Field strength calculations: a check on whether the maximum permitted levels of radio emissions are not exceeded by the introduction of (additional) DTTB /MTV equipment¹²¹. This check is carried for the purpose of protecting the health or

119 Tower companies are either dedicated companies owning transmitter locations (masts or other tall

constructions) or a subsidiary of a broadcast network operator, telecom operator or utilities company. They rent-out antenna and transmitter space. They tend not to own any transmitter equipment and are

considered real estate owners, although special real estate. Some typical examples are Crown Castle International and American Tower.

120 In some countries, the permission to build and to transmit (take the transmitter into operation) are split in two separate licensing procedures: the building permit and the environmental permit. In addition, they might be related. For example, the building permit procedure is not started before the environmental permit is assigned.

121 Sites carrying several services (like FM radio or Analogue television) next to the planned DTTB/MTV services might require specialized software and knowledge for calculating the cumulative field strength. Several

safety of persons who operate, work on or use the services supplied by DTTB/MTV transmitters;

b. Electromagnetic Compatibility (EMC): a check to ensure EMC levels are not exceeded. Most industrialized nations have established agencies or other regulatory bodies responsible for defining and enforcing EMC standards¹²². If EMC regulations exist in a country, equipment manufacturers cannot legally ship their product into that country until compliance with those regulations is met. The purpose of the regulation is to minimize electromagnetic interference between electronic products which may diminish the performance of other electrical products or disrupt essential communications. All products that fall within the scope of the regulation are subject to compliance with the arrangements and must be labeled appropriately with the compliance mark;

2. Mechanical: check on whether the mechanical construction can carry the additional (wind) load of the (additional) DTTB/MTV equipment (this might also include dishes for fixed wireless links to transport the multiplex streams to the transmitter tower). Local Regulators might stipulate an independent and certified engineering bureau to carry out the calculations. Standards for mechanical strength calculations are numerous and vary from country to country (and even between local governments);

3. Noise: check to ensure the DTTB/MTV transmitters, their cooling equipment and power supply do not exceed set standards for maximum noise levels. Especially in urban areas such standards might be applicable. Standards for noise limits are numerous and are specific for each environment. For example, a DTTB/MTV transmitter installed on the top of an office block might have to comply with different standards than a dedicated transmitter tower in a rural area;

4. Dangerous goods: check whether or not too many dangerous goods are accumulated in one single location. For example, there may be limits in place on the storage quantities of diesel for the transmitters’ power supply or back-up generator. Additionally, some fire prevention measures have to been taken;

5. Horizon pollution: Local governments check whether the planned DTTB/MTV transmitter sites fits in the local building plans (in the case of erecting a new mast). This might be the hardest requirement to meet, requiring intensive lobbying and additional investments.

Because DTTB towers tend to be very tall (over 100 meters) the horizon pollution might be perceived as large. Especially in urban areas this might be a hard nut to crack. Special commissions might be in place to assess the esthetics of the building request. It is not unusual that specially designed towers are requested, pushing up the DTTB investment levels considerably.

Normally, most of the above checks are carried out at a local level and very often with different standards and calculation methods applied. However, it could be argued that the test on field strength and EMC could be simplified and carried out at national level. For example, by the national radio agency or communication commission that issue the frequency license and check spectrum compliancy (see previous section). In addition, the national Regulator could also inform the local

international bodies exist for setting Radio Frequency or field strength safety standards and guidelines.

Globally, the two leading organizations are the International Commission on Non-Ionizing Radiation Protection (ICNIRP) and the Institute of Electrical and Electronics Engineers (IEEE).

122 See for example the Federal Communications Commission (FCC) in the United States and The British Standards Institution (BSI). Institutes providing standards include International Electrotechnical Commission (IEC), Comité Européen de Normalisation (CEN) and European Telecommunications Standards Institute (ETSI).

governments what standards are applicable for these DTTB/MTV building requests. In some countries, centralized approaches have been applied for the roll-out of mobile networks.

Site sharing rules

Generally, site sharing rules are applicable to certain entities such as telecom operators and broadcast network operators as defined in the relevant Telecoms Act. Very often these entities are defined as parties that provide a network/service for electronic communications, including broadcast communications. Real estate property owners (and possibly tower companies) might not fall under the defined entities.

In essence, site sharing rules provide arrangements to acquire access to transmitter sites and (possibly) pricing methods and limits. The ground rule is that parties that fall under the defined entities should provide access to any reasonable request. The site sharing rules might provide grounds for refusing access, including:

1. The site sharing request is not deemed reasonable: for example the requesting party does not provide (enough or relevant) technical data to assess the capacity claim on the tower or claims a reservation without a clear date for actual operations¹²³;

2. The requested capacity is not available: either the maximum wind load is exceeded with the additional antenna system or there are no physical meters left on the mast¹²⁴;

3. The site owner has reserved the capacity for its own services or operations: this ground for refusal will require the adoption of a reservation system in the site sharing rules.

Site access rules might not necessarily come with rules for fair pricing. As mentioned before, site sharing rules might be imposed on the basis of ‘essential facilities’ and/or ‘horizon pollution’. In any case, the applied pricing regimes are very often based on the theory of essential facilities¹²⁵. It is important that the Regulator can impose two types of pricing regimes:

1. Price cap: this form of price regulation is the most strict form (and it can be debated whether this should be applied) as price cap regulation will dictate the maximum price the site owner is allowed to charge for site sharing;

2. Cost plus: under this regime site sharing price is based on a defined list of allowed costs plus a maximum margin or yield on top of these costs. Many costing models exist and even after adopted a refined model many debates/conflicts still can occur, more specifically about¹²⁶:

a. What cost to include and for what portion: especially R&D and overhead costs are debatable;

b. What deprecation scheme: historical or replacement costs;

c. What percentage for the Weighted Average Cost of Capital (WACC)

123 As indicated in section 2.6, capacity reservations need special attention as they might be prone to strategic blocking.

124 It is not always evident whether maximum load capacity is reached, when the requesting party is proposing mast rearrangement (i.e. moving antenna systems) and problems might occur on the payment of these rearrangement costs.

125 For more details and background on the Theory of Essential Facilities please refer to http://www.ftc.gov/os/comments/intelpropertycomments/pitofskyrobert.pdf.

126 Many different cost models exist under this regime, most notably (in the telecoms industries) Long Run Incremental Costs (LRIC) models. Regulators in many countries apply this model, such as New Zealand, Australia, the United Kingdom, the European Community, and the United States. These models are also applied for site sharing. For more details see www.ictregulationtoolkit.org, section 3.3.2.

2.7.3 Implementation guidelines

The following guidance can be provided in regulating building permits and site sharing:

1. Determine (local) policy objectives first and apply the regulatory instruments accordingly.

For example, if the key objective is to avoid horizon pollution do not use essential facility arguments, because this leaves the Regulator open for legal attack. ‘Essential facilities’

might be difficult to prove and the objective to prevent horizon pollution might be lost;

2. Check consistency between applied regulatory instruments and the existing legal framework, especially:

a. Check applicability of the existing site sharing framework: very often defined for mobile operators, and not for any other operators or tower companies.

Consequently the DTTB/MTV introduction might require a re-definition of the Telecoms Act (which is normally a lengthily process);

b. Check building permit and site sharing regimes with any included service roll-out obligations in the spectrum license (and/or broadcast license);

c. Check consistency in applied building and environmental standards across the country and consider centralizing checks and informing local governments about the standards to be applied.

3. Consider addressing access to transmitter equipment space. Site sharing rules are very often limited to providing access for antennas, but transmitter space might be as difficult, or if not more difficult, to get access to. Transmitter space could be the limiting factor rather than the mast capacity and floor space pricing might not be regulated and market parties might charge excessive prices;

4. When site sharing rules are desirable for the purpose of avoiding strategic blocking, also provide rules on pricing. Site sharing rules without pricing rules tend not to work as excessive pricing will, in effect, stop access;

5. Generally for MTV networks many more sites will be required, compared to rolling out a DTTB network for rooftop¹²⁷. These additional MTV sites might be similar in height than mobile network sites. Hence for MTV networks the presence of site sharing rules for mobile operators might be especially relevant.

5. Make information on existing sites available for license holders. In some countries special agencies exist for administrating transmitter sites and their use ¹²⁸. Such agencies could help in making information on sites available, harmonize site sharing policies and speed up licensing procedure by provide expert knowledge to local councils or perhaps even evaluate site share applications. The latter can be especially relevant for DTTB roll-out as, most likely, the digital transmitters will be installed on the analogue television sites.