Be Afraid of New FASB Accounting Standards, Be Very Afraid

Over the last 14 years, American Tower as a leasor of wireless infrastructure has seen annual total returns of 16.3 percent while the S&P 500 averages a 6.8 percent return, said Fool.com.  So what’s scary about that?

A proposed rule change from the Financial Accounting Standards Board (FASB) has a chance of impacting balance sheets across the board in the tower industry as it stipulates “a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months.”  The ruling fundamentally negates off-balance sheet financing…. a big reason investors choose companies with operating leases, Fool.com said.  
American Tower’s latest quarterly report recognized pending changes:  

 “In February 2016, the FASB issued new guidance on the accounting for leases. The guidance amends the existing accounting standards for lease accounting, including the requirement that lessees recognize assets and liabilities for leases with terms greater than twelve months in the statement of financial position. Under the new guidance, lessor accounting is largely unchanged.This guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. The standard is required to be applied using a modified retrospective approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented. The Company is evaluating the impact this standard will have on its financial statements,” the ATC report said. Continue Reading

FCC Approves Broadband Privacy in 3-2 Vote, Industry Pushes Back

Media moguls like Comcast and Verizon now have to ask customers’ permission before using or sharing much of their data, the FCC ruled yesterday.  Under the new rules, for example, a broadband provider has to ask permission before it can tell an advertiser exactly what apps the customer is using, what websites they’ve used and where they are. The new rules could make garnering revenue from mobile-housed advertising more difficult.


Although the FCC’s approved measure was a diluted version of the original submission, the telecommunications, advertising and cable industries were critical of the action. The standards are much stricter than those imposed on web-based giants like Google and Facebook, which are regulated only by the FTC, and have the broadband community citing them as unfair to competitors.

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Google Fiber Halts U.S. Fiber Broadband Roll-Out

Google Fiber Halts U.S. Fiber Broadband Roll-Out: While fiber broadband was at one time full steam ahead, the engine has halted at Google. The technology giant announced this week a “slowdown in the development” of its U.S. fiber broadband roll-out, according to telecompaper. The big picture shows the company plans to look at alternate access technologies for areas that were seen as just potential, while still rolling out in cities where deployment efforts have already begun.

Google told telecompaper that it needs to “refine its approach” while staying “ahead of the curve by pushing the boundaries of technology, business, and policy.” Continue Reading

Indoor Wireless Coverage Vital to Business Health

In-building wireless coverage is more important now than ever. In fact, 87 percent of facilities managers and architects consider coverage inside of buildings to be “imperative,” according to a recent study conducted by Coleman Parkes Research and CommScope.

Another study, CommScope noted, was conducted by Nemertes Research and the Small Cell Forum. It found that 94 percent of enterprise IT executives believe in-building mobile performance impacts their business. Currently about 80 percent of wireless usage is indoors, but RAN infrastructure is outdoors, CommScope reported. 

The Nemertes study found that growing business dependence on mobile connectivity was emphasized when 94 percent of respondents said that the quality of in-building cellular coverage had an impact on their business performance – on a scale of one to ten, some 42 percent gave it a rating between eight to ten in terms of seriousness, with the healthcare sector notably prominent in these scores.  Continue Reading

NATE Launches Wireless Industry Network (WIN) Program

The National Association of Tower Erectors (NATE) today announced the official launch of the Wireless Industry Network (WIN). The WIN program is a coast-to-coast grassroots program designed to promote NATE’s regional, state and local efforts, support existing state and national wireless organizations and facilitate communication between all stakeholders in the wireless industry.
 

WIN consists of a nationwide network of respected Regional Ambassadors and State Liaisons who are devoted to NATE’s mission and are passionate about expanding the Association’s message of safety, quality, standards and education in order to reach the entire industry. WIN encompasses eight regions within the United States: Pacific, Southwest, Rocky Mountain, Great Plains, Great Lakes, Northeast, Atlantic Coast and Southeast and also includes a grassroots structure in Canada as well as a presence in the Bahamas. Continue Reading

AT&T and Verizon Look to Grow Apart From Wireless, No “Next Big Thing”

The two largest carriers in the U.S., AT&T and Verizon have had to look for growth elsewhere while the wireless market is reaching its saturation point according to the Wall Street Journal. With AT&T announcing Saturday that it intends to buy media giant Time Warner for over $80 billion and Verizon’s uncertain future with its recent purchase of Yahoo, at $4.4 billion, the wireless industry is losing its status as one of the ‘darlings’ of the growth sectors.
 
“They need to find a path forward for their core U.S. business that offers something better than inexorable decline,” Craig Moffett, an analyst at MoffettNathanson LLC told the Journal. “The internet, mobile phones and smartphones fueled rapid growth, but for the first time in memory, there is no ‘next big thing’ in telecom.”


Although both AT&T and Verizon have millions of customers actively on their respective networks, texting, streaming, downloading, tweeting and, yes, even calling, now that most Americans have a smartphone, the remaining growth potential is in the content according to the Wall Street Journal.  Smaller carrier rivals, meanwhile are whittling away at their subscriber base.  Continue Reading

Senator Pushes Samsung on Lithium Battery Safety, Possibly Others

Connecticut Senator Richard Blumenthal wants to get to the bottom of the lithium-ion battery issue in the Samsung Galaxy Note 7. Samsung stopped selling some 1.9 million of the devices after the batteries in several of the Note 7s caught fire, even when the phone was turned off.
 
Blumenthal’s questions go beyond the specific battery Samsung uses and could extend to other smartphones and other consumer electronic devices that employ lithium-ion batteries. The Ranking Member of the Senate Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security tells the electronics company in a letter he wants to gather information to “identify what steps need to be taken to ensure all electronic manufacturers can better guarantee the safety of lithium-ion batteries that are so commonly used in consumer products today.”  Continue Reading

FCC Halts Auction Mid-day to Drop Spectrum Clearing Target…Again

The FCC’s spectrum incentive auction will go into a third stage. That’s because the second stage closed after one round yesterday, more than $35 billion short of the $56.5 billion goal. The total bid was $21,519,907,210, according to the Commission.
 
The results play into what was expected to be “tepid carrier interest,” according to Bloomberg analysts John Butler and Matthew Kanterman. They predicted earlier the total bid for airwaves would only reach around $28.2 billion, reports Bloomberg BNA.

AT&T has committed to spending $9.4 billion, and the pair estimate Comcast and Verizon will spend half that, with T-Mobile likely bidding about $5.5 billion. Continue Reading

Wireless Must Move Beyond Hardware to Grow Business

When you’re told by flight attendants before takeoff to turn off the Samsung Galaxy Note 7, that’s a sign the wireless industry needs to retrench and shift towards software. So too, are job layoffs by Ericsson and now Verizon, according to Rethink Research.

Samsung has stopped production of the device. The recall and refund process, not to mention the loss of future sales, may add up to a $5.3 billion loss. The carrier will likely shift its efforts towards non-smartphone sectors like memory, processors and displays, and boost software focus as it recovers. Continue Reading

Will $3.5B Spectrum Sale, Leaseback Save Sprint?

It’s not yet time for Sprint to pop the champagne corks but the carrier has averted a financial crisis by mortgaging some of its 2.5 GHz spectrum. Wall Street gives the carrier credit for the move which buys time to pay off creditors.
 
Sprint proposed a $3.5 billion sale and leaseback; the spectrum it’s mortgaging is being used in about 77 percent of its 2.5 GHz-enabled sites and 33 percent of its 1.9 GHz-enabled sites, according to Bloomberg. It’s the third and final part of the plan by SoftBank Group Corp. owner Masayoshi Son to use special-purpose entities to turn key assets into cash.

Sprint has staved off creditors for the moment but still has work ahead. Gimme Credit analyst Dave Novosel called the move “a great short-term solution … but they are going to need to generate cash flow to pay off these debts.”  

The number four wireless carrier has $37 billion in debt, seven years of losses and a mature wireless market requiring promotions and price cutting to retain customers, according to analysts. CEO Marcelo Claure has said if the company is revived it would be “the greatest turnaround in history.”
Claure took over in 2014, and has dramatically cut prices, sometimes offering half off his competitors’ rates, according to Bloomberg. Recently he cut Sprint’s unlimited family plan to $140 for four people, compared with $160 at T-Mobile.

But while the lowered rates help retain customers, they’re not enhancing Sprint’s bottom line. “At some point you have to start attracting customers without giving away the store,” said Novosel. Continue Reading

FirstNet Winner Pick Looming Large November 1

If the federal government sticks to its plan, by November 1, it will award a contract for the First Responder Network Authority — FirstNet. Wells Fargo Securities believes the time-table remains on-track.
 
FirstNet is tasked with cost-effectively creating a nationwide network and providing wireless services to public safety agencies across the country. The goal is to end decades-long interoperability and communications challenges for first responders.

The upside for the company that wins the contract is phenomenal. FirstNet provides wireless carriers the opportunity to procure 20MHz of nationwide 700MHz spectrum to build, operate and maintain a nationwide safety network. The government will pay carriers $7B+ to do so, according to Wells Fargo Senior Analyst Jennifer Fritzsche.

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Telecom Community Preps for Hurricane Matthew

As Hurricane Matthew travels towards the East Coast, telecom providers are staging equipment and calling in extra tower crews to prepare for and minimize power outages if possible. Verizon Wireless is fine-tuning hurricane prep in coastal markets and local network teams are prepared to travel to help regions hardest-hit by the storm.

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Links and resources:
FEMA Alert Warning System
Email and SMS Weather Alert Services
DownDetector: shows concentration of reports about service being ‘down’

State Emergency Alert Plans and Chairpersons:
Florida
Georgia North Carolina: EAS Chairperson, WRAL-FM, 3100 Highwood Blvd., Raleigh, NC 27604,  phone: (919) 890-6104
South Carolina: Plan: John George, Audio Broadcasting Group, Lexington, SC 29073  phone: (803) 951-7443

 

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Since last year’s storms, Verizon has enhanced its 4G network by adding capacity to cell sites, fortifying coverage along evacuation routes and deploying advanced LTE technology. It’s also installed new in-building network systems at hospitals, government and emergency facilities and other high-traffic public locations.

The company has a number of “super-switch” network processing centers, which are designed to withstand Category 5 hurricanes. With hardened shells, these facilities also feature large-scale on-site power generation, various redundant operations and technologies, and other backup systems to ensure the company’s network remains operational. Continue Reading

SBA Board Approves REIT Conversion, Sees No Change in Operations

SBA Communications announced yesterday that it has authorized its Board of Directors “to take all necessary steps for it to qualify as a real estate investment trust (“REIT”) for tax purposes.”  SBA intends to be taxed as a REIT commencing with its taxable year ending December 31, 2016.
 
“We are pleased to announce this plan for conversion because we believe REIT status is the optimal structure for our business given the real estate nature of our assets,” stated Jeffrey A. Stoops, SBA’s President and Chief Executive Officer.  “We believe a REIT structure will provide many opportunities for creating long-term shareholder value.  We have been working on this plan for approximately two years.  We expect our conversion to a REIT to have little to no effect on our operations, as we have been operating in compliance with REIT rules since prior to the beginning of 2016.  We intend to continue our focus on maximizing long-term adjusted funds from operations per share through growth and disciplined capital allocation.”  Continue Reading

FCC Proposes Phased TV Repack Per Wireless’ Wishes

Tower owners and operators, wireless companies, broadcasters and their equipment providers told the Commission a phased-in approach to the television spectrum repack, post-auction, makes sense. Now, the FCC agrees.

Several FCC bureaus are developing a phased-in approach. The agency has proposed construction deadlines to coincide with its proposed 39-month “phased” transition schedule. The FCC seeks comments on the proposal in a Public Notice. Comments are due to MB Docket 16-306 or GN Docket 12-268 on October 31.

The Commission is balancing “the need for a post-incentive auction transition timetable that is flexible for broadcasters and that minimizes disruption to viewers” with the need for a schedule that “provides certainty to wireless providers and is completed as expeditiously as possible,” it said in a notice released Friday. Continue Reading