Crown Castle is in alignment with the political leadership of the United States. Particularly, as it relates to the deployment of small cells for 5G roll-out purposes.

The Federal Communications Commission (FCC) has continued to facilitate ways for the United States wireless market to stay competitive for the deployment of 5G on a global basis. An example of this has been the Federal Communications Commission’s order regarding small cells. This order seeks to expedite the process for placing 5G infrastructure across cities in the United States. The Federal Communications Commission order provides clarity around what the nature of the small cell deployment should look like. Further, it outlines a path towards working with local governments in order to get an agreement in-place.

United States Court of Appeals for the Ninth Circuit

In August 2020, the Federal Communications Commission small cell order was upheld by the United States Court of Appeals. This represents another positive data point for Crown Castle’s small cell permitting process.

Crown Castle’s Chief Financial Officer, Daniel Schlanger, Discusses the Political Implications:

The Federal Communications Commission order defined a few parameters, with respect to small cells. First, is the language around the cost to access right-of-ways for small cells, which must be cost-based. Further, a safe harbor, in terms of spend was provided by the Federal Communications Commission of ~$270 per year. Second, the Federal Communications Commission implemented a “shot clock” where permits have to be approved within an allotted time frame. Timing parameters are important for Crown Castle because it gives the company cost certainty.

Specifically, some municipalities and cities that Crown Castle interacts with were waiting for the United States Court of Appeals to opine on the small cell order. This is because, municipalities and cities did not want to implement a framework that would inevitably be overturned. Thus, they would avoid having to re-do their framework.

Small Cell Deployment Historically

Crown Castle has benefitted from this order in terms of its deployment of small cells. The company deployed 10k small cells during 2019, which is 30% higher than it was able to do in 2018 (i.e., before the order was implemented). Crown Castle attributes their increased pace of small cell deployment in-part to be a direct result of municipalities and utilities complying with the Federal Communications Commission order.

Small Cell Deployments Increase in 2020 and 2021

As of Q3 2020, Crown Castle had ~48k small cells on-air. The company’s goal is to have 50k small cells on-air by the end of 2020. Furthermore, the company has 20k small cells in backlog. This backlog should support similar small cell growth of 10k or greater in 2021. By the end of 2021, Crown Castle expects to have 60k small cells on-air.

Crown Castle operates 40.1k towers, 80k route miles of fiber supporting more than 70k small cell networks. The company’s infrastructure is entirely based in the United States.

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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