FCC's Push Got Carriers to Talk Pricing and Security: NATE Chief
Concessions from T-Mobile and Verizon that the companies offered as part of recent transactions were critical to getting major carriers to the table to address long-standing pricing issues, said Todd Schlekeway, president and CEO of NATE, an association representing infrastructure builders. The agreements also address concerns about workforce security and contractors who work on towers being fully vetted, he said.
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While headlines focused on the concessions Verizon made about ending diversity, equity and inclusion programs prior to FCC approval of its Frontier acquisition (see 2505160050) and similar T-Mobile concessions offered as part of its UScellular buy (see Ref:2507090034]), both transactions included agreements with NATE as well. The group is still working on an agreement with AT&T, Schlekeway said in an interview. “We have a long ways to go.”
“Over time, the cost of deployment and the pricing by the carriers … has just not kept up with the true costs of what it costs to deploy and maintain and build sites,” Schlekeway said, noting that inflation has been a major issue since 2020. FCC Chairman Brendan Carr and his staff “have really been instrumental in helping get the big three to the table." Carr led wireless infrastructure efforts as a commissioner during the first Trump administration and has posted on social media repeatedly about climbing towers.
NATE has already launched working groups with Verizon, which made the concession in May, while working groups with T-Mobile will start soon, Schlekeway said. Pricing is the top concern, and workforce integrity is close behind, he added. “Because the pricing has been low, it has led to this culture of a subcontractor of a subcontractor” doing the work.
Undocumented foreign workers, hired by “fly-by-night companies,” are building some towers, Schlekeway said, but NATE wants contractors to employ workers whose “immigration status [is] above board,” he said. “We’ve really talked a lot about those issues with the carriers.”
NATE is pro-immigration, but an influx of crews from Eastern Europe has raised potential national security issues, Schlekeway said. There’s also a correlation between the safety and training of the crew and the quality of the network build. Because of low prices, “carriers don’t even know who is on their sites at times,” he said. “That has got to change.”
Schlekeway said tower erectors also often don’t receive prompt payment. “It becomes a cash-flow problem in a hurry, so payment terms have been part of our negotiations as well.”
According to Friday's order from the FCC Wireless Bureau and Office of International Affairs, T-Mobile committed to updating its practices “related to pricing, master service agreements, third party vendors and operational mandates, workforce integrity, and turf vendor models, and to continue constructive dialogue with NATE and its members." The bureaus "accept T-Mobile’s commitment as firm and definite, and expect that it will help ensure that post-transaction, T-Mobile will invest in its network and strengthen services for all customers."
Of Schlekeway's 13 years leading NATE, the last two have been the most difficult, he said, with carriers reducing capital spending and pricing not keeping pace with costs. As a result, many contractors have either gone out of business or left the telecom sector, he said. NATE was “seeing data that told us something has to change because this current trajectory is not sustainable." Carr and his staff have shown “a genuine interest” in building “a more healthy, sustainable ecosystem.”
Schlekeway said he has also spent lots of time meeting with carrier executives on tower erectors' problems. The carriers are all affiliate members of NATE, he noted.
Negotiations Ongoing
Carriers came to the table “in good faith” for the current discussions, Schlekeway said. “We’re going to find out in the working groups how quickly we can impact the marketplace and implement the terms” in the Verizon and T-Mobile agreements. “The proof is going to be when they issue their new [requests for proposals] for pricing,” he said. “They’re going to have to play ball and raise their prices.”
Work with carriers is on different tracks. Verizon is negotiating regional RFPs, with the first slated to launch by the end of August, Schlekeway said. T-Mobile has agreed to a national RFP, to be completed by the end of the year. In the interim, T-Mobile agreed to raise its construction catalog pricing by 6%, he said. NATE has held three meetings with AT&T, which recently sent NATE a draft framework agreement, he said.
There are more trained tower workers now than before the COVID-19 pandemic, and NATE has promoted the work as a career more than just another job, Schlekeway said, adding that one can do very well in this industry. Based on information NATE provided, the average entry-level salary for a trained tower worker is $56,000 a year, while a foreman-level worker with 10 years of experience makes an average of $95,000.