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Funding Distributed Antenna Systems in Commercial Buildings

Indoor Wireless Usage Is On The Rise As Landlines Fall By The Wayside

In addition to their tenants’ operational reliance on cellular devices, many commercial building owners are opting to deploy cellular wireless (4G-LTE) networks in their buildings for a variety of reasons, including to increase public safety and to provide a reliable network infrastructure as the transition to automated building systems reliant on the Internet of Things (IoT) more firmly takes hold.

Increased Public Safety

According to the FCC, over 70% of 911 calls are placed via cellular devices. In large commercial buildings, such as hotels, office parks, or entertainment venues, cell phone reception is inherently weak due to the sheer number of people, the large expanse of space that needs to be covered, and the huge amount of building materials a signal needs to pass through. In fact, in most buildings – regardless of size – elevators, parking garages, interior hallways, and store closets have an incredibly limited cellular signal. 

With these types of buildings holding such a large number of people who are increasingly relying on their mobile devices throughout the day, ensuring that they have a reliable signal should they need to call for help is a top priority. 

In fact, the National Fire Protection Association’s (NFPA-72) Code (National Fire Alarm and Signaling Code) and the International Code Council’s International Fire Code (IFC-510) mandates both require an indoor wireless infrastructure within buildings. This is to ensure that all inhabitants can make emergency calls and that first responders are able to use a building’s indoor wireless network to communicate with each other while coordinating their efforts, 

Internet of Things Expansion

Now more than ever, building and property managers rely on a variety of automated and connected systems to ensure the safety, security, and upkeep of their buildings. Everything from security systems and POS systems to temperature and environment control can be – and are – tied to indoor wireless networks. The various sensors and devices that make up the Internet of Things that keep a building running require a constant, reliable signal to maintain its connectivity. While most buildings have Wi-Fi networks, these networks typically aren’t conducive to keeping many devices connected and data flowing consistently due to the fact that they’re “best effort” services and can often get congested and prioritize the wrong device at the wrong time.

Funding Models for Distributed Antenna Systems (DAS)

While it’s clear that deploying an indoor wireless network is necessary, it’s not a project that can be undertaken lightly. There are a variety of options for which type of system to deploy, but they all come at a considerable expense – and the larger the building, the more expensive the implementation and deployment. For this reason, there are a few different funding options that property owners can explore to find the best solution for their budget and their tenants.

Carrier Funded

As mobile phone usage grew, the wireless carriers initially set about deploying their own Distributed Antenna Systems (DAS) in very large, high-profile venues, such as airports, professional sports arenas, convention centers, and mega-hotels like those found in Las Vegas. This provided a benefit to both the building owner and the carrier, who would both have happy customers within these highly-populated areas. 

In this model, the carrier either completely funds the project and handles the build-out and installation, or they fund the project and work with a third-party installation company to complete the actual work. If the carrier works with a third-party installer, then they will typically contribute a one-time capital contribution and then recurring monthly payments for the duration of time that they want their network to be available to that building. 

Once most of the major facilities were equipped with carrier-funded DAS, the carriers dramatically decreased their roll-out of venue deployments. Within the last few years, the carrier-funded model has become much less common, and two additional models have sprung up in its place.

Venue Funded

In a venue-funded model, the building owner is fully responsible for deploying and maintaining the Distributed Antenna System for their building. For new construction buildings, DAS is often incorporated into the initial buildout, with those costs simply being rolled into the construction costs and finances by the construction loans. The costs of operating the network are then passed through to the tenants as part of their lease agreements. 

Incorporating the deployment of DAS into the initial construction of the building results in a much lower cost solution. 

Hybrid Funded

For pre-existing buildings, retrofitting them with a DAS is much more expensive. Building owners that don’t want to be fully responsible for this cost may opt to partner with a third-party installation company. This third-party company would then bear the cost of the installation and deployment, while the building owners would be responsible for paying for services over the agreed-upon length of time. 

In this situation, as in a venue-funded model, the building owners can pass the costs on to their tenants as part of their lease agreements. They may do this either by rolling an even, fixed amount into everyone’s monthly rent, or they may include it as part of the Operating Expenses or Common Area Maintenance Expenses. If they choose to do the latter, then they would likely charge each tenant an amount based on their percentage of building use as determined by the square footage of their leased space. 

There are some caveats to this that may depend on how a lease agreement is structured. For example, a lease may stipulate that the lessee is exempt from paying any part of capital expenditures or the cost of new systems installed after their lease has been executed. To preclude this, property owners may opt to work with a third-party installer who would then be providing network services at a monthly rate. The building owner could then interpret the monthly fees as a utility expense rather than a capital expenditure and pass that utility fee on to their tenants.

Any building owner considering the installation and deployment of a Distributed Antenna System to provide indoor wireless coverage to their tenants is strongly advised to speak with a third-party installation company, such as MCA. By working with a company that has extensive experience with various DAS deployments, building owners can enjoy a seamless process as the third-party navigates designing the system, procuring the equipment, and working with the carrier networks to integrate them into the systems network while also avoiding expensive – and time consuming – missteps.

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