Top 3 Ownership Models for Neutral Host Distributed Antenna SystemsTop 3 Ownership and Funding Models for Neutral Host Distributed Antenna Systems (DAS) & Wi-FiWhen we break it down to its simplest elements, there are three main types of DAS & Wi-Fi ownership models present in the market today with numerous hybrids of each. They are the enterprise, carrier, and operator owned models. Each model has its own set of risks and rewards; each is motivated by the need to provide enhanced mobile services while maximizing the revenue opportunity and minimize the risks of doing business.Hopefully by now medium to large venue operators like airports, metros, convention centers, theme parks, hospitals, hotels, and other large commercial and residential building owners understand the need to provision commercial carrier, public safety, and Wi-Fi services in their buildings. Understanding the need doesn't necessary mean knowing all the facts, and thats totally okay. Utilities like electricity, HVAC, and plumbing are integrated into the construction of buildings and generate revenue, and now we are now seeing that same model employed with network infrastructure too. Im here to tell you that when setup and executed properly an in building wireless network can simultaneously combine all your necessary mobile services into a consolidated infrastructure, be a source of stable reoccurring revenue, and in some cases also be fully funded by carrier and/or mobile operator organizations.

Which model is best?Depending on your enterprises profile, there are many favorable funding and revenue generation models out there to consider and it can be tougher than you think to figure out which one is exactly right for your organization. Thats because the answer depends largely on services, capacity, and venue bureaucracy requirements. Service and capacity requirements are straight forward technical pieces that can be easily defined. Its the bureaucratic requirements that can create bumps in the road. I have long held the belief that technology is not the barrier to service delivery; rather its the politics of decision making that can be a real impediment. But that is another story for another article.The Enterprise Ownership ModelOn its face venue organizations are enticed by the value proposition of retaining the ownership of their network infrastructure while simultaneously getting carriers (i.e. wireless service providers (WSPs)) to foot the bill. Over time this model has been tested many times with unfortunate and unintended outcomes for both parties.Venues, like any other business, should focus on what makes them money. Venues arent setup to scale the RF engineering endeavor necessary to ensure the health and overall performance of a wireless network and they take a great risk when trying to own the infrastructure that delivers these services. The error in judgement venues often make in this model is overestimating their own ability to monitor, maintain, and upgrade the infrastructure necessary to deliver optimal service to their customers. The risks inherent in the venue owned models can in turn discourage carriers from putting up the money necessary to roll out the infrastructure. Carriers see each venue from a revenue opportunity perspective and each carrier has their own formula to measure the potential returns they might realize for investing. Now that isnt to say that their formula doesnt have some elasticity for negotiations, it certainly does. For example, if Verizon is deployed at a stadium or airport that AT&T is not you better believe AT&T will do everything in its power to rectify the inequity, but just like any business everything has its limits. These limits are measured in terms of the business case and risk vs reward potential, and if there is no guarantee that they will realize returns or revenue from the opportunity they may stay away.In a world where carriers are taking massive shortcuts to reduce costs without thoroughly considering the engineering downside, super star optimization engineers will always be in high demand. There is always opportunity where there are network problems, and with all the network problems created on the deployment front end, this trend is sure to increase. Due to gaps in understanding, bureaucratic red tape, and because of all of the perceived benefits, it is next to impossible to convince some enterprise organizations to let go of the ownership of the infrastructure. These benefits allow the venue to control, manage, sell services on and maximize their recurring revenue from the infrastructure, but also utilize the backbone for add-on fronthaul services like wireless CCTV security cameras.

The Carrier Ownership ModelFrom a single anchor tenant to carrier consortium level participation, there are numerous variations of the carrier ownership model and they are all wrought with consequences. For example, in the single carrier or anchor tenant model the lead carrier wont allow subsequent carriers to provide a better performing service and they implement this by limiting the radio power resources available to others. In the consortium ownership model the level of bureaucracy increases exponentially crippling every aspect of decision making. The risks of these models can be managed into a workable arrangement if the venue understands the pitfalls and manages the potential risks with clear contract language that prevents anti-competitive practices and assesses damages for delayed decision making.Every business attempts to erect barriers to entry to strengthen their dominance and carriers are no strangers to anti-competitive practices. From buying up and shelving spectrum and disruptive technologies to limiting radio access network and power amplifier resources on neutral host DASs, carriers will exercise these anti-competitive practices liberally, as a matter of course and without giving it a second thought. The remedy is to have an unbiased, carrier agnostic and vendor neutral expert on the venues side to drive technical requirements and contract language that will ensure a healthy competition is maintained and revenues are maximized. The added effect of system optimization will ensure ideal system performance for the venue and its customers.Despite the best effort of carriers and other WSPs to espouse the carrier ownership model they have not been able to effectively scale and make a profitable business case from owning the neutral host infrastructure. Again this is because owning and maintaining venue infrastructure is not their core business and often they themselves will opt for joint ownership and partner with other carriers or better yet bring in an independent third party operator like Crown Castle, American Tower, or Extenet that is setup to scale the endeavor.

The Operator Ownership ModelCompanies like Crown Castle, Extenet, American Tower, and even Boingo have made very profitable business models out of owning and operating the infrastructure necessary to deliver network capacity into high density venues. The larger and more densely crowded and trafficked a venue the more likely they are to fund, maintain, optimize, and share a portion of that revenue with the venue. Operators have formulas that they base their decision on whether or not to fund a project but at the forefront of their formula is that they will solely own and operate the infrastructure without interference from the venue.The operators ownership model offers manifold value propositions to a venue. They will normally cut a risk free monthly check to the venue for the privilege of installing, monitoring, maintaining and providing a high level of performance to defined wireless services to its constituents. If you negotiate hard enough and get the carriers to buy in to it the operator might even throw in a state of the art Wi-Fi system too. They also have deep pockets, extensive carrier relationships, and expert engineers and professionals who have established the organization necessary to scale and profit from this endeavor. This is not an easy undertaking and we must respect the talent, disciplines, skills, and resources necessary to create such an organization. The real long term benefit of the low risk profile of this service delivery model cant be understated. Operators know what they are doing and they only make money when your system performance is tuned and customers are happy.Operators make so much money and make it look so easy to do it that every Tom, Dick, and Harry integration shop thinks they can copy the model and establish an operator business model. Dont be fooled, there is nothing easy about what the largest players have accomplished. Operators have invested heavily in building these systems on their own dime; have hundreds of millions if not billions in capital to fund their projects, and an army of engineers, business managers, and lawyers at their fingertips to make it happen.Carriers like to work with operators because they respect deep pockets and feel comfortable the operator model presents a low risk profile, venues like to work with them because of the minimal effort necessary to achieve returns, as well as the reduced risk and bureaucratic profile, and vendors like to work with them because, well, they have a lot of work going on at any given time and can keep good vendors in business. The upper echelon of the wireless industry is a pretty darn small and tight knit community that plays musical chairs across various organizations. If you get on their good side and provide a much needed service or innovation operators can boost your business up to the next level and if you get on their bad side you could get blacklisted from ever doing business with just about everyone.There are downsides to the operator owned model that are both apparent and not so obvious. This model takes direct control, administration, and decision making over the infrastructure out of the venue and carrier organizations hands. Insights into the form, function, and potential for service add-ons are ambiguous and all at the discretion of the operator which leaves the venue at the mercy of the operator for all issues concerning the network infrastructure that resides in their house. The operator has a lot of leverage over both carriers and venues hence other draw backs include a difficult path to system reconfiguration, service add-on or adjustment once system optimization has been commissioned and carrier approved. Just remember operators are only interested in their bottom line and sometimes their interests dont align perfectly with either the venue or the carrier, so like any landlord they can sometimes be difficult to come to terms with because with ownership comes leverage.

Final ThoughtsIn summary, carrier funding doesn't have to equal carrier ownership, operator funding almost always equals operator ownership, and no matter the network ownership model an enterprise venue selects there will always be a cost of doing business for the venue. Lets not kid ourselves; there is always a time and resource allocation cost associated with harmonizing internal stakeholders, issuing RFPs, inspecting service and product deliverables, supporting, coordinating, and managing the rollout, and working with the various stakeholders to make sure the venues needs are represented. The costs, risks, returns, and system performance can be streamlined, if you have the right partners guiding you from the start, but nothing precludes an organization from doing its homework on the available options.All in all a venue holds all the trump cards when it comes to negotiating a good deal for them. The venue organization needs to remember that an alternative to a bad deal is to negotiate for a better one. If carriers want to serve customers in that venue they have to learn to play ball. The larger, more densely crowded and trafficked venues present a key revenue opportunity to carriers that they cannot and will not forgo as long as the risks are managed fairly well, and with so many vendor agnostic Neutral Host DAS engineering and integration companies out there today it shouldn't be too difficult to identify and hire an expert to work on your side. Getting the right talent to guide your organization on the path toward the optimal system for your venue makes all the difference between getting what you want vs getting what you thought you wanted before you got it.Finally I would love to hear your comments and feedback. If you know of a key funding or ownership model out there that I omitted from this assessment, please sound off in the comments. Cisco predicts 13x Data Traffic Growth from 2014-2020 and with north of 85% of all traffic generated inside buildings, in building coverage and capacity solutions are more important now than anytime in the past. Despite the perception of market saturation, the statistics on market penetration of these solutions vary from 1-2% which means there is still a lot of greenfield left. Moreover as customers become more educated and sophisticated they want all of their wireless services consolidated into a future proof network infrastructure. Physical limitations for installation have become a key driver in this new push and as we move toward embracing all fiber architectures we might actually be able to have our cake and eat it too.