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Valuer-General Victoria and Municipal Group of Valuers

Specialist Property Guidelinesfor Telecommunications

August 2011

For more information about DSE visit www.dse.vic.gov.au or contact the DSE Customer Service Centre on 136 186 For information about the Municipal Group of Valuers visit www.mgv.com.au Published by the Victorian Government Department of Sustainability and Environment, Melbourne, August 2011.

© This publication is copyright. No part may be reproduced by any process except in accordance with the provision of the Copyright Act 1968.

Disclaimer: This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.

Victorian Statutory Revaluation

Guidelines on Valuation Methodology for Telecommunications August 2011 Page 1 of 19

Valuer-General Victoria and Municipal Group of Valuers

Guidelines on Valuation Methodology for Telecommunications

Introduction These guidelines are to be used when valuing telecommunications for rating and taxation purposes. The guidelines need to be used in conjunction with the General Provisions for Specialist Guidelines, which refer to the general requirements, legislation and procedures relating to all statutory valuations.

Definition The following definition of a Telecommunications network is contained in Section 7 of the Telecommunications Act 1997

"telecommunications network" means a system, or series of systems, that carries, or is capable of carrying, communications by means of guided and/or unguided electromagnetic energy.

An acceptable classification for Telecommunication Towers and Aerials is contained in the Australian Valuation Property Classification Codes (AVPCC). Land on which a tower and associated infrastructure used for the transmission or telecommunication signals are constructed or aerials affixed to buildings (without a footprint) and which form part of a larger property.. A definition for a Telecommunications Facility is Victorian Planning Scheme Provisions1 as follows Land used to accommodate any part of the infrastructure of a Telecommunications network. It includes any telecommunications line, equipment, apparatus, telecommunications tower, mast, antenna, tunnel, duct, hole, pit, pole, or other structure or thing used, or for use in or in connection with a Telecommunications network. For the purpose of planning, telecommunications are classified as either High Impact or Low Impact Facilities.

1. High Impact Facilities – Towers/pole that require a Planning Permit

Towers – Man-made structures that are always taller than they are wide, usually by a significant margin, generally built to take advantage of their height and can stand alone or as part of a larger structure. In the context of telecommunications a tower requires a planning permit to be erected and is usually either a HUB or a BTU.

Mobile phone towers are generally 25 to 30 metres high.

A HUB is a larger tower in excess of 50 metres.

A BTU is a smaller tower in the range of 25 to 30 metres.

1 Victorian Planning Provisions Clause 74 land Use Terms

http://www.austlii.edu.au/au/legis/cth/consol_act/ta1997214/s7.html#carry

http://www.austlii.edu.au/au/legis/cth/consol_act/ta1997214/s7.html#communications


2. Low Impact Facilities – Maximum Height 6.5 metres that do not require Planning

Approval. Low-impact facilities are generally small radio communications antennae and dishes erected on existing towers or buildings that are designed to be unobtrusive. Other types of low-impact facility include underground cables, public telephones, telecommunications pits in footpaths and co-located facilities. The maximum height of a low-impact facility is 6.5 metres, but only when sited in a rural or industrial zone.

There are two general categories for the valuation of telecommunication facilities: 1. Micro – Small Aerials

Aerials can be located on the side of a pole or attached to or on top of buildings. The following are examples of Micro sites

2. Macro – also known as CMTS Cellular Mobile Telecommunications Site. Macro sites are

towers and rooftop antennas. This category also includes HUBs – large towers in excess of 50 metres with multiple microwave dishes. The following are examples of Macro sites:



Other definitions and industry terms Towers – three types of Communication Towers

Guyed Tower –a single column steel structure supported by several guyed wires. These towers require a relatively large land area to accommodate the guy wires. Guyed towers tend to be taller than lattice or monopole towers.

Lattice Tower –a multiple column structure that is reinforced by crossbeams. A lattice tower is frequently less than 75 metres tall.

Monopole – a single-pole tower which is usually shorter than the guyed or the lattice towers. Monopoles occupy less space then the other towers and are frequently well suited for large metropolitan areas.

Telecommunication Systems

A telecommunication system consists of three basic elements: a transmitter that takes information and converts it to a signal a transmission medium that carries the signal, and a receiver that receives the signal and converts it back into usable information.

For example, in a radio broadcast the broadcast tower is the transmitter, free space is the transmission medium and the radio is the receiver. Often telecommunication systems are two-way with a single device acting as both a transmitter and receiver or transceiver. For example, a mobile phone is a transceiver. Telecommunication over a phone line is called point to point communication because it is between one transmitter and one receiver. Telecommunication through radio broadcasts is called broadcast communication because it is between one powerful transmitter and numerous receivers.

DAS – Distributed Antenna Systems




DAS uses a hub and spoke architecture to connect base station equipment to a fibre-fed network. The network consists of small Radio Access Nodes (RANs) or microcells, each with a multi-band antenna, which can be distributed via existing infrastructure. These types of antenna are usually located within buildings.

Microwave transmission

Microwave Transmission refers to the technique of transmitting information over a microwave link. Since microwaves are highly susceptible to attenuation by the atmosphere (especially during wet weather), the use of microwave transmission is limited to a few contexts –

it is only suitable over line of sight transmission links provides good bandwidth affected by rain, vapor, dust, snow, cloud, mist and fog, heavy moisture not suitable for links where an obstacle is in between the transmitter and

receiver.

Analogue or Digital

Signals can be either analogue or digital. In an analogue signal, the signal is varied continuously with respect to the information. In a digital signal, the information is encoded as a set of discrete values (for example ones and zeros). During transmission the information contained in analogue signals will be degraded by noise. Conversely, unless the noise exceeds a certain threshold, the information contained in digital signals will remain intact. This noise resistance represents a key advantage of digital signals over analogue signals.



Networks

A collection of transmitters, receivers or transceivers that communicate with each other is known as a network. Digital networks may consist of one or more routers that route information to the correct user. An analogue network may consist of one or more switches that establish a connection between two or more users. For both types of network, repeaters may be necessary to amplify or recreate the signal when it is being transmitted over long distances. This is to combat attenuation that can render the signal indistinguishable from noise.

Channel

A channel is a division in a transmission medium so that it can be used to send multiple streams of information. For example, a radio station may broadcast at 96.1 MHz while another radio station may broadcast at 94.5 MHz. In this case, the medium has been divided by frequency and each channel has received a separate frequency to broadcast on. Alternatively, one could allocate each channel a recurring segment of time over which to broadcast — this is known as time-division multiplexing and is sometimes used in digital communication.

Modulation

The shaping of a signal to convey information is known as modulation. Modulation can be used to represent a digital message as an analogue waveform. This is known as keying and several keying techniques exist (these include phase-shift keying, frequency-shift keying and amplitude-shift keying). Bluetooth, for example, uses phase-shift keying to exchange information between devices.



Additional Victorian legislation and cases applicable to telecommunications

The following Acts are relevant to this topic: Local Government Act 1989 (Sections 154 and 156) Telecommunications Act 1997 (Commonwealth) Electricity Industry Act 2000 (Section 94) Planning and Environment Act 1987

Court cases: The following court case is applicable to the telecommunications industry. United Energy Limited v Monash CC (Land Valuation) [2005] VCAT 2721 Section 22 Valuation of Land Act 1960 – referral of objection to site value, capital improved value and net annual value – consideration of planning controls

Other relevant material: Telecommunication Code of Practice 1997

Telecommunication (Low Impact Facility) Determination 1997 Australian Communications and Media Authority (ACMA)

The Australian Communications and Media Authority (ACMA) is the government body responsible for the regulation of broadcasting, the Internet, radio communications and telecommunications. ACMA also administers the technical standards compliance regime for electromagnetic compatibility (EMC), radio communications, electromagnetic radiation (EMR) and telecommunications. It also supports a full range of radio communications services through radio communications licensing. The ACMA website is www.acma.gov.au . Relevant codes under this website are:

Deployment of Mobile Phone Network Infrastructure

Placement of Mobile Phone Towers

The Mobile Phone Network Infrastructure Code and Local Government. A register of radio communication licences can be found at http://web.acma.gov.au/pls/radcom/register_search.main_page

Department of Broadband, Communications and the Digital Economy (DBCDE)

The DBCDE website is www.dbcde.gov.au. It contains information about: Communications and Technology – Resources and news about telephone, Internet, broadband and ICT services for consumers and business. Also covers funding, policy, legislation, statistics, reviews, online security and contacts for industry bodies.

http://www.acma.gov.au/

http://web.acma.gov.au/pls/radcom/register_search.main_page

http://www.dbcde.gov.au/



Media and Broadcasting – Policy and legislation regulating radio and television broadcasting and Internet services, including research, guidelines and reviews. Post – Policies and regulations for the postal industry and information about the history and administration of Australia Post.



Identification of properties

Australian Valuation Property Classification Codes (AVPCC) To appropriately categorise telecommunication in a municipality, refer to the Australian Valuation Property Classification Codes (AVPCC) available at www.dse.vic.gov.au/valuation. The following codes apply to telecommunications:

Telecommunication Towers and Aerials (AVPCC 694)

Unspecified – 694.1

Telecommunication Tower – 694.2

Telecommunication Aerial – 694.3

http://www.dse.vic.gov.au/valuation



Rental questionnaire and property information – specific requirements applicable to telecommunications In addition to the general requirements for rental information, the following is a guide to the specific information required for telecommunications.

Property Data

1. Address/Unit number

2. Tower/pole height metres (approximately)

3. Total number of carriers

4. Plans/maps

5. Pole ID Number

Land lease details

Lease details Carrier # Carrier # Carrier # Carrier #

Commencement date

Lease term Rent review method Date of last rent review Ground rent per annum $ $ $ $ Rent type Net

Gross Net

Gross Net

Gross Net

Gross Outgoings amount per annum paid by tenant

$ $ $ $

Outgoings amount per annum paid by owner

$ $ $ $

Occupancy Lease Particulars

Lease details Carrier # Carrier # Carrier # Carrier #

Commencement date

Lease term Rent review method Date of last rent review Rent per annum $ $ $ $ Rent type Net

Gross Net

Gross Net

Gross Net

Gross Outgoings amount per annum paid by tenant

$ $ $ $

Outgoings amount per annum paid by owner

$ $ $ $

Estimated cost of construction Year of construction

Other details considered relevant

Please include all other details (in addition to the above) that you believe may affect the statutory values of the property(s).



Property inspection – specific requirements applicable to telecommunications

1. Inspect telecommunication facility and the number of carriers in the case of a

tower/pole.

2. The Internet is a valuable resource including sites such as the Radio Frequency National Site Archive - www.rfnsa.com.au. This site will enable searches on telecommunications facilities by district and postcode.

http://www.rfnsa.com.au/



Methodology Site value and capital improved value

SV methodology The primary approach used is capitalisation of ground rent. A Ground Rent is a rent per annum for the use of the land to construct a tower. The primary evidence to use is lettings and sales of comparable properties analysed to indicate appropriate market rentals and capitalisation rates. CIV methodology The primary approach to Capital Improved Value is a summation approach. The added of the improvements including plant and equipment is added to the Site Value to derive the CIV. A capitalisation of income approach may be adopted where a telecommunications facility is in a multi tenanted building, or in addition to the ground leases there are multiple licences that attached to the pole. If a telecommunications facility occupies a portion of a parcel it is considered to be a separate occupancy and should be valued accordingly. If the telecommunications facility is occupied by more than one carrier or is on a rooftop, then the site value and capital improved value attributed to the tower may have to be apportioned in accordance with Section 2 (3) of the Valuation of Land Act. Refer to Occupancy in the General Provision. Sales Analysis

When analysing sales the valuer should derive the value of the different components of the property by ascertaining the added value of any improvements including plant and equipment. Refer specialist guideline paper on plant and equipment. The sale should be fully analysed on the basis of market rentals. In most cases, however, limited lease details are disclosed and an analysed passing yield may be the best indicator. The check method by summation can be derived by ascertaining the CIV by direct comparison the deducting the added value of the tower to arrive at a site value.

Valuation considerations

the CIV should have regard to plant and equipment; Refer to specialist guideline paper on plant and equipment.

in determining the added value for plant and equipment (i.e. pole and shed etc.) a depreciated replacement cost can be utilised. Refer also to sales analysis break up of components if available.

in the event that passing ground rents are provided and there are no other current market rents to suggest otherwise, the passing rents can be a guide.

the EAV must be a minimum of 5 per cent of the CIV. The methodology shown in the following examples can apply to residential, rural, commercial or industrial land.



The information in the following examples is not indicative of any market information, the income, rents and rates are for example purposes only. Example A – One Carrier on a Monopole

Site Value

Ground Rent $7,500 pa Net Rent $7,500 paCap Rate 15%Total SV $50,000

Capital Improved Value

Carrier A - $10,000 pa Total Gross Rent $10,000 paLess Outgoings $1,000 paNet Rent $9,000 paCouncil Rates $500 paEAV $9,500pa CIV by Summation Site Value $ 50,000Pole $ 80,000Shed $ 20,000CIV* $150,000

Assessment SV CIV NAV Carrier A $ 50,000 $ 150,000 $ 9,500



Example B – Three Carriers on a Monopole

Site Value

Ground Rent - Net Carrier A $9,000Carrier B $10,000Carrier C $10,800Total Net Rent $29,800 paCap Rate 15%Total SV $198,666Adopt SV $200,000

Carrier A – Gross Rent $10,000 Less Outgoings $1,000 Net Rent $9,000 Council Rates $500 EAV $9,500 Carrier B – Gross Rent $11,000 Less Outgoings $1,000 Net Rent $10,000 Council Rates $500 EAV $10,500 Carrier C – Gross Rent $12,000 Less Outgoings $1,200 Net Rent $10,800 Council Rates $700 EAV $11,500 EAV Whole $31,500 CIV by Summation Site Value $ 200,000Pole $ 90,000Shed (allow 3 sheds) $ 55,000CIV $345,000

Apportionment on EAV Assessment SV CIV NAV Carrier A $ 60,000 $ 104,000 $9,500 Carrier B $ 67,000 $ 115,000 $10,500 Carrier C $ 73,000 $ 126,000 $11,500



Example C – Rooftop Antenna on existing building with a shop on the ground floor, office on the second floor and antenna on rooftop.

Site Value

Based on zoning and usual land considerations

$250,000

Capital Improved Value Shop – Gross Rent $30,000 Less Outgoings $2,500 Net Rent $27,500 Council Rates $1,500 EAV $29,000 Office – Gross Rent $20,000 Less Outgoings $1,500 Net Rent $18,500 Council Rates $1,000 EAV $19,500 Telco – Gross Rent $15,000 Less Outgoings $1,000 Net Rent $14,000 Council Rates $500 EAV $14,500 EAV Whole $63,000 CIV Total Gross Rent $65,000Less Total Outgoings $5,000Total Net Rent $60,000 Cap Rate 6%CIV Rounded $1,000,000 Apportionment on EAV CIV - Shop $ 460,000CIV - Office $ 310,000CIV - Telco $ 230,000 SV - Shop $ 115,000SV - Office $ 77,000SV - Telco $ 58,000

Assessment SV CIV NAV Shop $ 115,000 $ 460,000 $29,000 Office $ 77,000 $ 310,000 $19,500 Telco $ 58,000 $ 230,000 $14,500



Industry information Telecommunications Industry Ombudsman – The Telecommunications Industry Ombudsman is a free and independent alternative dispute resolution scheme for small business and residential consumers in Australia with unresolved complaints about their telephone or internet services. Website: www.tio.com.au

Communications Alliance – The aim of the Communications Alliance is to promote the growth of the Australian communications industry and to protect consumer interests through industry self-governance. Website: www.commsalliance.com.au

A Code of Practice for Telecommunications Facilities in Victoria – July 2004 – Below is an extract from the Code of Practice, issued by the Victorian Department of Planning and Community Development (DPCD), setting out the circumstances and requirements under which land may be developed for a telecommunications facility. The full version of the code of practice is available on the DPCD website – www.dpcd.vic.gov.au Telecommunication facilities that may be developed without the need for a planning permit: a microcell - an antenna and associated box which supplements the mobile network in

heavy usage areas. an above ground housing - an above ground equipment shelter housing

telecommunication infrastructure including: a pillar a cabinet a pedestal an elevated joint minor street furnishings marker posts a remote integrated multiplexer.

a temporary facility - a telecommunications facility that does not exist on the land for more than a total of four months in any 12 month period.

an underground cable or duct – is placed into the ground by trenching or direct burial. Once in the ground, the ground is reinstated and the cable cannot be seen.

a boring cable –is a process where new cable is run through ducts which already exist, or is bored predominately underground from one end point to another.

a radio communications dish – is a circular dish antenna used to send and receive radio frequency communications.

a tower –includes any similar structure supporting antennas. a telecommunication facility located inside a building, structure or tunnel – which is

included in or integrated in such a way as to have the appearance of being part of the building, structure or tunnel.

a telecommunication facility located on a roof – using rooftops of appropriate height avoids the need for a tower or similar structure to be built. A facility on the roof of a building is generally less intrusive than a new tower and is therefore encouraged as a design solution to minimise visual impact.

a telecommunications facility attached to infrastructure within a road zone – carriers are encouraged to use existing infrastructure along major highways, arterial roads and freeways to support telecommunications facilities providing coverage along these roads to avoid the need for additional structures.

an optical fibre ground wire on high voltage transmission towers – an electricity ground wire with an optical fibre core located in the ground wire position of high voltage electricity towers.

Carriers are encouraged to co-locate facilities wherever practical. This provision encourages colocation where an existing structure has the capacity to cope with the additional requirements and combined equipment of more than one carrier or the combined equipment of carrier(s) and the operation of radio communications network such as two way radio operators and community radio stations.

http://www.tio.com.au/

http://www.commsalliance.com.au/

http://www.dpcd.vic.gov.au/



Installation of Telecommunications Facilities – A Guide for Local Government

Below is an extract from the telecommunications section of the Australian Communications and Media Authority website, www.acma.gov.au

The Australian Government is responsible for regulating telecommunications matters. Telecommunications facilities specified in the Telecommunications Act 1997, or in a ministerial determination made under the Act, are exempt from local planning laws and can be installed with authorisation under Commonwealth law. The types of facilities covered by the Act and the determination include smaller radio communications antennas and dishes, and underground cabling.

Telecommunications facilities that are not covered by the Telecommunications Act or a determination are likely to require approval under state or territory law, usually at the local government level. The types of facilities that require local council planning approval include broadband overhead cable and all freestanding mobile phone towers.

Accordingly, telecommunications facilities are governed by legislation at the local, state and federal government levels, depending on the type of facility and the zoning of the site.

Low-Impact Facilities

Licensed telecommunications carriers are authorised by the Telecommunications Act to install a limited range of facilities without seeking state, territory or local government planning approval. The most common of these are known as 'low-impact' facilities which are specified in the Telecommunications (Low-impact Facilities) Determination 1997 and its amendment of 1999.

Low-impact facilities are generally small radio communications antennae and dishes erected on existing towers or buildings that are designed to be unobtrusive. Other types of low-impact facility include underground cables, public telephones, telecommunications pits in footpaths and co-located facilities. The maximum height of a low-impact facility is 6.5 metres, but only when sited in a rural or industrial zone and the facility must have an omnidirectional antenna or an array of these. One commonly installed low-impact facility is 5.8 metres high. By contrast, mobile phone towers are generally 25 to 30 metres high.

The Low-impact Facilities Determination defines where these facilities may be installed based on zoning considerations. For example, a facility that is deemed low-impact in a rural or industrial zone may not be low-impact if it is installed in a residential area. A facility in an area of environmental significance, such as a World Heritage area or an area on the Register of the National Estate, cannot be designated a low-impact facility.

In some cases, the colour of a low-impact facility is required to be matched to its background, or in a colour agreed by the carrier and the local authority. See the table following for what is designated a 'low-impact' facility.

http://www.acma.gov.au/



Facility Notes* Residential Commercial Industrial Rural

Panel, yagi or other like antenna

≤ 2.8m long with ≤ 3m mounting arm

colour matched or agreed

Low impact Low impact Low impact Low impact

Array of antenna

≤ 4.5m long with ≤ 2m mounting arm omnidirectional only

≤ 5m apart

Not low impact

Not low impact

Low impact Low impact

Radio communications dish

≤ 1.2m diameter with ≤ 2m protrusion

attached to supporting structure

colour-matched or agreed


Extension to tower

≤ 5m

max. of one extension

Not low impact

Not low impact

Low impact Low impact

Underground housing

Pit surface ≤ 2 sqm OR

Manhole surface area ≤ 2 sqm OR

Underground equip shelter/housing surface area ≤ 2 sqm


Underground cabling

Trench, direct burial, bore or directional drill hole

New trench, bore or directional drill hole subject to dimensional and access to property requirements

May utilise pre-existing trench


Public pay phones

Solely for carriage and content services


*This is a guide only. Please refer to the Telecommunications/Low impact facilities/Determination 1997 regarding compliance.

Exemption from state and territory planning laws

A carrier who complies with the Telecommunications Act when installing a low-impact facility is immune from some state and territory laws, including town planning, use of land, tenancy and commercial and domestic power supply laws.

The Act also offers immunity from environmental assessment and protection laws, with the exception of laws pertaining to the protection of places or items of significance to the cultural



heritage of Aboriginal persons or Torres Strait Islanders, for installation or maintenance of facilities.

What rights do carriers have? Under the Telecommunications Act, carriers have the following rights:

Right to inspect land Carriers may enter onto and inspect any land, and do anything on the land, that is necessary or desirable for the purpose of determining whether the land is suitable for their purposes. Right to install low-impact facilities Carriers have the right to install a low-impact facility. Right to maintain telecommunications facilities Carriers have the right to maintain a telecommunications facility and may do anything necessary for the purpose of maintaining a facility including an alteration, removal or repair of a facility.

What are carriers' responsibilities? The Telecommunications Code of Practice 1997 (amended in 2002) sets out in detail carriers' rights and responsibilities when inspecting land; installing low-impact facilities, subscriber connections and temporary defence facilities; and maintaining facilities.

The Code of Practice requires that, when undertaking these activities, carriers must take all reasonable steps to:

cause as little detriment, damage and inconvenience as practicable; ensure that land is restored to a condition similar to its condition before the activity

began; protect the environment; minimise interference with public utilities, roads and paths, traffic and land use; act in accordance with good engineering practice and ensure that the design,

planning and installation of the facilities is in accordance with best practice and complies with ACMA or industry codes or standards;

protect the safety of persons and property; co-locate facilities with the existing facilities of other carriers or public utilities or use

public easements; and co-operate with other carriers and public utilities who are undertaking similar

activities on the same land to minimise inconvenience and damage. How many radio communications facilities are within a council boundary? All radio communications facilities including mobile phone antennas must be licensed by ACMA. ACMA maintains a Register of Radio Communications Licenses, which lists operational facilities. If a facility is currently being installed then it is unlikely to appear on the register. Most carriers forward their registrations to ACMA in batches at regular intervals, which means that the register may not list all radio communications facilities current at any particular time. For large searches, it may be easier to purchase the register database on CD-ROM.

The MCF maintains an electronic Radio Frequency National Site Archive - www.rfnsa.com.au - which lists new mobile base station facilities built or upgraded since April 2003.

http://www.rfnsa.com.au/

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