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SBA’s Stoops Talks Dish Deal, Verizon Pact, New Leases, Sustained Growth

By Mike Harrington

Jeffrey A. Stoops, president and CEO of SBA Communications

Speaking at the Goldman Sachs 2021 Communacopia Virtual Conference today SBA Communications President and CEO Jeffrey A. Stoops said his company has optimism about 2022. He talked about SBA’s leases, its deal with Dish, its C-Band agreement with Verizon and technology that will sustain company growth into the foreseeable future.

“The big picture for why we have had sustained levels of activity should continue,” Stoops said. “The reasons are pretty straightforward: the emergence of Dish building out a nationwide wireless network. It is also the material increase in the amount of macro activity we’re beginning to see from Verizon, obviously triggered by the C-Band auction.”

Stoops said that he believes that SBA has entered the sustainable part of the 5G cycle. “All of the four nationwide customers, including Dish, are all heavily engaged with projects that are going to extend for quite some period of time,” he said. “I feel very good about this new level of activity being sustainable for the foreseeable future.”

Stoops said he is highly confident about long-range new-lease signings — although he said he doesn’t believe that SBA’s signings in 2021 will reach the level the company achieved in 2019. “I think we hit a certain level in Q2 — and that level is being sustained, with the opportunity for continued upward bias in terms of backlog and activity,” he said. “I’m talking about activity going on around the company and out in the field right now—and that really translates into lease signings. The financial results from activity will lag the benefits from that activity. So, it feels pretty good right now — as we move toward the end of the year, we’re not seeing anything from a project perspective. We’re very optimistic about 2022.”

Last month, SBA reported second-quarter results that included a net income of $152.7 million or $1.37 per share, AFFO per share growth of 15.3 percent over the prior year period, and revenue of $575.5 million. The company raised its outlook for 2021, adjusting funds from operations of $10.32 to $10.72 per share and revenue of $2.26 billion to $2.30 billion. At the time, Stoops said he believed the second quarter was the start of a multiyear business expansion for both tower builders and carriers — and that the next two quarters would increase sequentially.

“Our second-quarter performance was our best in quite some time,” Stoops said at Communacopia. “U.S. wireless carrier activity increased substantially in the quarter. Domestically, we produced record services revenue, we had the highest revenue added per tower based on signed leases and amendments since 2014, and our leasing and services backlogs were at multiyear highs at quarter end. While this increased leasing activity will benefit our reported 2021 revenue, the majority of the incremental revenue will begin to be recognized in 2022.”

Reflecting on the C-Band agreement SBA signed with Verizon in April, Stoops said he sees a lot of win-wins. Verizon paid $45.45 billion for an average of 161 megahertz of C-band spectrum nationwide in an April FCC auction, which will allow Verizon to offer increased mobility and broadband services to millions more consumers and businesses.

The C-Band is a mid-band spectrum that provides a middle ground between capacity and coverage and will allow Verizon to offer both increased mobile 5G coverage and home broadband services to millions more consumers and businesses. Because the C-Band spectrum requires new network equipment to be placed on existing towers, Verizon sought additional agreements with SBA and Crown Castle, which both already host Verizon infrastructure equipment.

About the SBA deal with Verizon, Stoops said that both parties look for kind of the same thing in such a deal. “They both look for a certain word — though sometimes from different metrics — and that word is ‘certainty’; certainty in terms of term, certainty in terms of volume. Those are things that are important to a tower company. And then on the customer side, certainty in terms of rate. And the ability to plan. So, when those things come together and they can be agreed to, terms can be agreed to in a mutually attractive and accessible manner—then they get done. And that’s exactly what happened with Verizon.”

Stoops said that the Verizon/SBA master license agreement (MLA) provided efficiency and eliminated different types of red-tape issues. “That will allow us to move quicker,” he said. “And what it basically did was provide both parties with a greater sense of partnership of working together, which has freed up all kinds of activities and avenues for us to keep working together. So, when you get the basics right in terms of certainty and terms, and there’s a mutual meeting of the minds, we’re very much in favor of MLAs.”

Stoops added this about C-Band and Verizon: “Verizon is getting out there ahead of when the spectrum is clear, but whether it’s this quarter or next, it’s becoming clear that C-Band is going to be a heavily macro-tower—and those of us in the industry who focus in that area will benefit.”

Stoops had this to say about new leases and Dish: “We are in a bit of a new paradigm for the next couple of years as Dish builds out because it is all going to be brand new leases. New leases are always good. And he made this comment about the recent $5 billion deal Dish made with AT&T in July to move Dish’s wireless customer traffic to AT&T’s network: “The bottom line is a more viable financially stronger Dish, which I believe this makes them, with AT&T, is good for our industry.”

Meanwhile, Stoops also took the time to address mobile edge computing. “We continue to believe that that is an area that is going to be high demand and very attractive for years to come,” he said. “I think we have five units now constructed and operating. We have been able to provide some synergies between those units and are two data centers — and that’s another area in which we see real possibility. I think it’s got a long way to go. I think you need to see some applications out in the consumer world, but it’s coming.”

Mike Harrington is a contributing editor

Massachusetts, Verizon Enable Digital Inclusion Program

In an effort to help narrow the digital divide, with support from the Commonwealth of Massachusetts, Verizon Public Sector has begun a program to provide access to wireless broadband data and voice services by underserved communities in Massachusetts, eight neighboring states and the District of Columbia. Verizon will provide turnkey connectivity, devices and other solutions to eligible families who lack internet access, a statement from the company reads.

“Massachusetts joins the Georgia Department of Education in Verizon’s program of sponsor-state agreements with state agencies and not-for-profit organizations to enable communities to provide low-income residents with internet access in a fast, simple way,” the statement reads.

According to Verizon, under the Massachusetts agreement, state agencies or not-for-profit organizations in Massachusetts, Connecticut, Delaware, Maine, Maryland, New Hampshire, Pennsylvania, Rhode Island, Vermont and Washington, D.C. can participate in the program. Eligible users of services in these states include those who participate in the National School Lunch Program, Pell Grant recipients, or members of households, as defined by federal tax guidelines, with a household income that is lower than 135 percent of the income designated by the Federal Poverty Guidelines, the company said.

“The COVID-19 pandemic has highlighted the importance of reliable internet access and the gaps in digital access,” the statement reads. “According to data from the New American Economy Research Fund, 43.7 percent of low-income households lacked access to personal high-speed internet at home, more than double that of the rest of the population. With many school systems implementing hybrid learning models for this fall, the risk to students and families without access to the internet remains critical.”

Verizon modeled the digital inclusion program after the Verizon Distance Learning program, which provided access to reliable, affordable Internet connections and solutions for more than 38 million students in 40 states and the District of Columbia during the pandemic, the company said.

“During the pandemic, we worked with state and local governments to provide connectivity for students shifting to online education as quickly as possible,” said Jennifer Chronis, senior vice president of Verizon Public Sector. “A significant digital divide persists, and our mission is to help narrow the connectivity gap by providing the easiest way for states and non-profits to get families online.”

 

Verizon Prices Third $1 Billion Green Bond

Matt Ellis, Verizon executive vice president and chief financial officer

Verizon Communications has settled its third green bond offering of $1 billion, shortly after the full allocation of its second green bond toward renewable energy commitments.

The net proceeds of its third green bond are expected to also be allocated entirely toward renewable energy as the company continues to enter into long-term virtual power purchase agreements (VPPAs) which support the construction of solar and wind power facilities.

“In less than two years, Verizon has become one of the leading corporate buyers of renewable energy in the U.S., entering into fourteen VPPAs for nearly 1.9 gigawatts of renewable energy capacity,” said Matt Ellis, Verizon’s executive vice president and chief financial officer. “These investments are consistent with our commitments in support of the U.N. Sustainable Development Goals, to source or generate renewable energy equivalent to 50 percent of our total annual electricity consumption by 2025, and to be net-zero in our operational emissions by 2035 (scope 1 and 2 emissions). Furthermore, this transaction aligns with our commitment to advancing racial and social equity in the capital markets by partnering with women- and minority-owned firms.”

Chris Williams, chairman of Siebert Williams Shank

Verizon has added to an updated version of what it calls its Green Financing Framework underwriter selection criteria focused on sustainability and diversity commitments. The framework states that a financial institution would be eligible for selection as an underwriter for green financing instruments if it meets at least one of the following criteria: It has established clear and impactful commitments in support of the U.N. Sustainable Development Goals, it is a diverse-owned firm or it has a core mission of promoting diversity, equity and inclusion.

“Based on these criteria and long-standing trusted relationships, Verizon selected three minority- and women-owned firms as lead underwriters for the launch of the green bond: Loop Capital Markets, Ramirez & Co. and Siebert Williams Shank,” a statement from the company reads.

In addition, Verizon said, the company appointed Morgan Stanley as one of its four lead underwriters. It said Morgan Stanley has been a leader in sustainability for over a decade, being the first major U.S.-based global bank to commit to net-zero financed emissions by 2050, while also promoting diversity, equity and inclusion with initiatives such as the Institute for Inclusion and the Multicultural Innovation Lab. All four lead underwriters shared equal responsibility in bringing the transaction to the market, Verizon said.

Sam Ramirez Jr., senior managing director of Ramirez & Co.

Year to date, Verizon has paid approximately $20 million in underwriting fees to minority- and women-owned firms, including $4.5 million for the third green bond and more than $14 million in fees related to Verizon’s $25 billion debt offering in March, with the latter transaction holding the record for the most fees paid to minority- and women-owned firms in a single transaction, the company said.

“With the issuance of its third consecutive $1 billion green bond, Verizon once again demonstrates its commitment to the principles of racial diversity and economic inclusion, while also continuing to be a standard bearer for corporate environmental responsibility,” said Chris Williams, chairman of Siebert Williams Shank. “We thank Verizon for providing significant economic support and the opportunity for its diverse banking partners to gain substantive professional experience, which enables our firms to enhance the breadth and quality of the capital markets services that we deliver to all of our clients.”

According to Verizon, the capital market transaction aligns with the company’s long-standing commitment to make both environmental and social progress as part of its responsible business plan called Citizen Verizon, in connection with addressing societal issues.

Sam Ramirez Jr., senior managing director of Ramirez & Co., said that serving as a lead underwriter for the transaction enabled his company to showcase its capabilities and compete at what he called the highest levels. He said Verizon demonstrated leadership and vision by including diversity, equity and inclusion firms. “As we celebrate our 50th anniversary in 2021, we recognize that it is opportunities such as this that have enabled us to grow our business over the years,” he said.

Telecom Carriers Aim to Reduce 5G Carbon Footprint

By Mike Harrington

The nonprofit Green America Wireless Scorecard measures clean energy usage and reductions in greenhouse-gas emissions within the wireless industry.

For all the bright, sunny positives that 5G wireless communications technology offers to consumers, businesses and first responders — increased capacity, speed, reliability and connectivity — a large looming cloud persists: Power-hungry 5G base stations can consume up to three times more power than 4G and LTE networks. This massive electricity consumption leaves a bigger carbon footprint on the environment and could be a big problem for countries that depend on fossil fuels for electricity generation.

Last week, AT&T announced its plans to target eliminating 1 billion metric tons of greenhouse gas emissions, working with Microsoft, universities and other alliances to unleash the power of 5G and other broadband technologies through the AT&T Connected Climate Initiative.

AT&T says it has set an industry-leading target to help businesses collectively reduce a gigaton of greenhouse gas (GHG) emissions — 1 billion metric tons — by 2035, an effort which will contribute to a better, more sustainable world. A gigaton is equal to approximately 15 percent of U.S. greenhouse gas emissions and nearly 3 percent of global energy-related emissions in 2020 — or 1.6 billion flights from Los Angeles to New York.

AT&T will work with businesses including Microsoft, Equinix and Duke Energy, along with research universities, and a range of other organizations to deliver broadband-enabled climate solutions at global scale. This collaborative builds on AT&T’s standing commitment to aggressively reduce our own emissions, while enabling the transition to a net-zero economy.

Meanwhile, the other major telecom carriers have their green energy environmental programs in place.

T-Mobile moved early on renewable energy. In June 2020, the nonprofit Green America Wireless Scorecard, which measures clean energy usage and reductions in greenhouse-gas emissions within the wireless industry, named T-Mobile the top carrier for Clean Energy Commitment — for the third year in a row.

According to a company spokesperson, T-Mobile was the first in the industry to set two carbon reduction targets validated by the Science-Based Targets Initiative to reduce greenhouse gas (GHG) emissions and prevent the worst effects of climate change: 

Target 1: Reduce combined absolute Scope 1 and Scope 2 GHG emissions 95 percent by 2025 from a 2016 base year;

2020 Progress: Combined Scope 1 and Scope 2 emissions decreased by 22.2 percent since 2016;

Target 2: Reduce Scope 3 GHG emissions 15 percent per customer by 2025 from a 2016 base year;

2020 Progress: Scope 3 emissions intensity decreased by 14.5 percent per customer since 2016.

T-Mobile also set an industry first in 2018 by joining the RE100 pledge, a global initiative bringing together the world’s most influential businesses committed to 100 percent renewable electricity. “A few years and one historic merger later, we’re still on track,” the T-Mobile spokesperson said, detailing this progress: “RE100 Pledge: Source renewable energy equivalent to 100 percent of our total electricity usage by the end of 2021. 2020 Progress: As the supercharged Un-carrier, 25.3 percent of T-Mobile’s electricity usage relied on renewable energy. 2021 Progress: We’ve signed renewable energy contracts for over 3.5 million MWh. Through June 30, 2021, we have sourced 75 percent of our electricity usage from renewable sources and are tracking to reach 100 percent by the end of the year.”

Verizon remains the only U.S. telecom company to complete the full allocation of two green bonds.

Meanwhile, in 2019, Verizon set an ambitious goal to achieve net zero operational emissions by 2035 and committed to source or generate renewable energy equivalent to 50 percent of its annual electricity consumption by 2025. In January 2021, Verizon announced that it became a leading corporate buyer of U.S. renewable energy, entering into thirteen long-term renewable energy purchase agreements totaling nearly 1.7 gigawatts (GW) of renewable energy capacity since December 2019. Verizon also activated more than 8 megawatts (MW) of additional on-site solar energy at eight of its facilities during 2020. Since 2013 the company has installed more than 28 MW of green power at 26 onsite locations.

Two weeks ago, Verizon issued its Green Bond Impact Report, outlining the full allocation of the nearly $1 billion of net proceeds from its second green bond. Verizon became the first U.S. telecom company to issue a green bond back in February 2019. In September 2020, the company issued its second green bond, and remains the only U.S. telecommunications company to complete the full allocation of two green bonds.

“To date, we have issued $2 billion in green bonds that support the transition to a greener grid and help us achieve our ambitious goal of net zero emissions in our operations by 2035,” said Matt Ellis, Verizon’s executive vice president and chief financial officer. “Verizon’s green bond projects demonstrate our long-term commitment to minimize our environmental impact, drive operating efficiencies and benefit the communities we serve.”

Matt Ellis, Verizon executive vice president and chief financial officer

Verizon has fully allocated the net proceeds of its second green bond entirely to virtual power purchase agreements for renewable energy projects. These projects are for approximately 1 GW of new renewable energy generating capacity across seven states, of which about 83 percent is solar energy generating capacity and 17 percent is wind energy generating capacity.

The use of proceeds from the bond is part of Citizen Verizon, the company’s responsible business plan for economic, environmental and social advancement. The Green Bond Impact Report can be found on the company’s fixed income investor relations site. For more information, visit https://www.verizon.com/about/investors/green-bond-reports.


Mike Harrington is a contributing editor

 

Telecom Carriers, Crews, FCC Respond to Hurricane Ida’s Devastation

By Mike Harrington

AT&T continues to make progress with their wireline restoration efforts in areas impacted by Hurricane Ida. All of their wireline facilities remain online, although some continue to run on backup power. Image c/o www.att.com.

In the wake of Hurricane Ida’s path of destruction, power restoration to some areas of storm-ravaged southeast Louisiana could take weeks, hampering the efforts of the FCC and wireless providers to fully restore emergency and consumer cellular service.

The second-most damaging storm in Louisiana history — after Katrina, and the strongest storm ever to hit the state — the Category 4 Hurricane Ida caused widespread mobile wireless and fiber disruptions when it slammed into southeast Louisiana, knocking out most of the New Orleans metro area’s power and disabling much of AT&T, Verizon and T-Mobile’s wireless services.

At the height of Hurricane Ida’s flooding and wind damage on Aug. 30, the day after hurricane winds made landfall, AT&T said that 60 percent of its network in Louisiana was working. T-Mobile said that around 70 percent of its network was in operation in Alabama and Louisiana on Aug.30, but did not disclose the specific effect on the latter state. Verizon did not disclose the peak effect of the storm on its network, but by Sept. 2, said that “90 percent of Verizon cell sites that were in the path of the storm are in service.”

By Sept. 3, an AT&T press release said that it had restored most services, and was “operating at more than 94 percent of normal.” The company added, “We now have a total of 23 on-air mobile cell site solutions supporting customers and first responders.” AT&T also said, “Despite commercial power outages, all of our wireline centers remain in service as we continue to place and refuel generators.”

In Louisiana, T-Mobile response teams are on the ground providing much-needed supplies in New Orleans, Baton Rouge, and Lafourche Parish, including phones with 30 days of free T-Mobile voice, text and data; phone battery chargers and universal charging cables. Image c/o www.t-mobile.com.

Similarly, a T-Mobile prepared statement said that “some sites that were previously impacted in Louisiana, Mississippi and Alabama were restored overnight as our crews have worked tirelessly to deploy large numbers of generators and rapidly power them up again.”

Around a quarter of cellular sites in southeast Louisiana remained offline by Sept. 2, though more than half of the towers initially knocked out had been repaired, according to a report from the FCC. About 700 of the affected area’s 2,759 cellular sites were still down. The affected area includes Acadiana and southeast Louisiana.

On Aug. 30, more than half of the cellular sites were down. About 61 percent of the remaining offline towers were without power, according to the FCC, and a little more than a quarter had sustained damage to their network that transports communications to and from the site. About 15 percent of sites had physical damage from the storm.

Another FCC report showed that as of 11 a.m. Aug. 31, 52 percent of 2,759 cellular sites across 31 Louisiana parishes were offline as a result of the hurricane. The majority of the downed towers — nearly 65 percent — were offline due to a lack of power, a problem that could persist for weeks in some parts of the state. In some cases, cell sites are down due to multiple issues, such as power outages, damage to the network or damage to the site itself.

On Sept. 3, the FCC took a series of actions to extend deadlines and waive rules to assist consumers, licensees and communications providers in Louisiana and Mississippi affected by Hurricane Ida. “The FCC is working around the clock in coordination with government partners and industry to support the restoration of vital communications services after the destruction of Hurricane Ida,” FCC Acting Chairwoman Jessica Rosenworcel said on Sept 3.

Jessica Rosenworcel, acting chairwoman of the FCC

“We’re extending deadlines for our universal service and other relief programs, including the Emergency Connectivity Fund and Emergency Broadband Benefit Program, to better assist consumers and providers in affected areas,” Rosenworcel said. “We are also extending filing deadlines for Form 477 broadband data reports, and extending filing and regulatory deadlines for wireless and public safety licensees in affected areas. Meanwhile, we will continue to support recovery efforts and monitor the effects of the storm nationwide.  We offer our deep condolences to those who lost family members or whose homes and property were destroyed in this devastating hurricane.”

On Sept. 3, AT&T reported: “Our wireless network in Louisiana currently operating at more than 98 percent of normal. We continue to maintain and refuel more than 200 generators currently providing power to equipment there. Our wireless network in both Alabama and Mississippi are operating normally. More than 70 crews are continuing to work across Louisiana to keep our customers, their families and first responders connected”

AT&T also reported that it had deployed its FirstNet Communications Vehicle to a heavily affected area in Louisiana to provide an extra level of support. In addition to providing LTE and Wi-Fi connectivity, this CV offers an air-conditioned command space for first responder personnel and is equipped with multiple monitors, charging stations, a television and a large exterior screen and speakers that can be used for briefings, according to AT&T.

The AT&T report also said, “In the aftermath of Hurricane Ida, we are also preparing to launch FirstNet One, an aerostat blimp that functions as an LTE tower in the sky to support first responders and the extended public safety community in the area. FirstNet One will launch in Raceland, an area that includes a major hospital, a main roadway corridor to the Grand Isle community and is serving as a staging area for mutual-aid support. So far, public safety — spanning federal, state and local agencies — have made nearly 60 FirstNet emergency support requests for Ida.”

Verizon Response Team (VRT) delivering Verizon Frontline technologies to support first responders and recovery efforts. Image c/o www.verizon.com.

Meanwhile, the Verizon Response Team arrived in Southeastern Louisiana on Aug. 30 to deliver Verizon Frontline technology to first responders conducting search and rescue and disaster response operations in some of the areas hardest hit by Hurricane Ida.

The Response Team was pre-positioned just outside of the expected storm track, enabling a rapid response effort when conditions permitted and allowing the team to quickly distribute mission-critical communication technology to federal, state and local government and public safety agencies operating in storm-damaged areas of Louisiana.

According to Verizon, collaborating with emergency management officials across affected regions of the state, the Verizon Response Team has deployed a wide range of Verizon Frontline technology, including satellite pico-cells on trailers (SPOTs), network extenders, routers, mobile hotspots and phones to provide critical voice and data service to public safety professionals dealing with the devastation left in the wake of the powerful Category 4 storm.

Verizon said the Verizon Response Team is expected to remain on scene as long as needed to assist public safety agencies as it continues to conduct search and rescue operations and deal with widespread power outages, flooding and catastrophic storm damage. The Verizon Response Team provides on-demand, emergency assistance during crisis situations to government agencies, emergency responders, nonprofits and communities on a continuous basis.

Verizon Response team members provide Verizon Frontline technology including portable cell sites, Wi-Fi hotspots, free charging stations and other devices and solutions that enable communications and/or boost network performance.

By Sept. 6, most cellular service had been restored throughout Louisiana.  However, there was still limited ability to transmit live out of the hardest-hit areas in southeast Louisiana, including parts of New Orleans and Houma, due to a lack of cell towers. Verizon is giving customers in hurricane ravaged areas unlimited data through Sept 10; AT&T through Sept 14.


Mike Harrington is a contributing editor.