FCC Ruling May Spur Generator Demand

In an effort to keep phone and wireless networks online during natural disasters, the FCC is now requiring telecom and wireless companies to provide backup power for cell sites and remote telecom facilities. The new measures, prompted by an FCC review of telecom outages in the aftermath of Hurricane Katrina, are likely to increase demand for generators, batteries and other power protection equipment. The rules also pose a challenge for carriers with equipment in locations that may not easily support backup equipment due to space constraints or environmental considerations.

The new rules cover most local exchange carriers (LECs) and mobile service providers, who must provide backup power systems for central offices, cell sites, and remote switches and terminals. There are more than 210,000 cellular sites and about 20,000 telecom central offices in the U.S., according to industry statistics. The FCC says central offices should be able to operate for 24 hours without grid power, while eight hours of backup power is required for cell sites, remote switches and remote terminals.

The new rules could affect the market for diesel generators, which are widely used by data centers to provide backup power to keep servers running during grid power outages. The current data center building boom has led to lengthy delivery delays for 2-megawatt generators. Most central offices and cell towers would require smaller generators, but it's not clear how the additional demand for components and raw materials could affect production capacity for major generator manufacturers.

The wireless industry trade group CTIA has filed a lawsuit to overturn the FCC ruling, saying it will cost the industry hundreds of millions of dollars to implement the new rules. The wireless industry had total annual revenues of $134.7 billion, according to a June 2007 estimate from CTIA.

Carriers have six months to file a plan outlining how they will comply with the new rules. Many wireless providers and LECs argued against the new regulations, saying their facilities couldn't be easily adapted to add diesel or propane generators or other backup power systems. The FCC rejected that argument, noting the importance of communications reliability during emergencies, as well as the fact that the industry has known for two years that new backup power regulations were likely.

"We recognize that, in order to comply with the rule, some carriers may have to modify sites to accommodate additional equipment or, in some cases, find other, more suitable, locations for their assets," the FCC wrote in its Oct. 4 ruling. "We believe, however, that any such burdens are far outweighed by the ultimate goal of this rule."

John Vivian, corporate account manager of telecommunications at Caterpillar Inc., one of the leading manufacturers of backup generators, told RCR Wireless News that it will be "very difficult" for cellular operators and tower companies to meet the new FCC backup power rule. "It will take a lot of cooperation and innovation," said Vivian.

Adding backup power to central offices and cell sites could lead to local disputes, according to the New Jersey League of Municipalities, which published an advisory on the new rule and its impact.

"Municipalities may shortly see a lot of activity to put generators and battery backup systems at cell tower sites on private and public property, including those in the rights of way," the advisory reads. "This may cause problems for towers in sensitive municipal locations, such as on the roofs of municipal or school buildings, or on water towers, because the systems typically involve gas, diesel or propane powered generators (with accompanying fuel tanks) or batteries with lots of sulfuric acid. Lease terms often prohibit such dangerous substances or require municipal approval of changes from the initial installation, and either type of system is heavy, which may cause building or structural concerns."