Over the past few years, the proptech movement has become entrenched in the lexicon of the real estate industry as developers use the term as a catch-all term for using technology in the construction of new commercial buildings and begin to plan for smart cities. The various technologies integrate wireless sensors, broadband service and other cloud-based applications to reduce energy costs, improve transportation and enhance security.
At the same time, the introduction of these technologies increases the likelihood that landowners will need to incorporate an extra layer (or two) of due diligence when integrating these services. Not only do many Internet of Things (IoT) devices use the wireless spectrum to communicate with other devices, but recent federal government actions have led to bans on some Chinese-made equipment. The Federal Communications Commission (FCC) has primary responsibility for devices that use the wireless spectrum and also implements federal policy regarding devices that may involve national security concerns.
With that in mind, here are some considerations real estate developers should keep in mind when incorporating the latest technologies into their plans.
The deployment of 5G can provide new revenue opportunities.
One of the keys to developing the IoT ecosphere is building a reliable network that incorporates wireless technologies. Over the past few years, mobile operators and product developers have been busy creating wireless networks and products based on 5G technology. Networks built to run on a 5G-based platform will deliver significantly higher speeds with less delay (latency) between points. While most readers are familiar with the term “5G” from the endless cellphone advertisements, device manufacturers have also started using 5G technology for commercial applications.
For property developers, the large-scale implementation of 5G technology offers exciting new business opportunities. First, because new 5G wireless networks use higher spectrum bands, the distance between cell sites must be significantly less than previous wireless technologies. As a result, there will be a greater demand for rental space on buildings for new antennas, especially in urban areas.
Second, since the majority of 5G networks rely on higher spectrum bands with reduced propagation characteristics, it will be more difficult to receive 5G signals inside buildings. As a result, many property owners are currently negotiating Distributed Antenna System (DAS) agreements with major wireless service providers, which offers a new potential revenue stream. These DAS agreements allow wireless carriers to install micro-repeaters or nodes in large buildings and campuses to ensure their customers continue to receive service. In the future, these systems will serve as a platform for IoT devices to provide a variety of “smart” services, including environmental sensing, remote monitoring for maintenance purposes, and other intelligence applications. artificial.
Devices using the spectrum must comply with federal regulations.
This explosion of connected IoT devices will only be possible if the devices do not cause interference with each other. Most IoT devices are designed to emit or receive radio frequency (RF) energy to perform their functions. These devices must be designed to operate in accordance with technical standards to ensure that no unintended interference is caused by their operation. These devices must also be tested before being sold to the public.
In the United States, the FCC has primary responsibility for developing and implementing these procedures. These procedures include requirements for manufacturers to (i) test their RF devices before release or sale, (ii) label their RF devices with identifying information, and (iii) provide compliance information in product manuals. or other documentation so consumers know how to resolve interference issues or contact the manufacturer.
Additionally, the FCC has a strong enforcement regime in place that monitors the market and investigates complaints of interference or non-compliance with its rules. In recent years, he has launched industry-wide investigations into non-compliant LED lighting and conducted surveys of retail establishments to ensure products are properly tested and labeled. With the growing use of connected devices, it is likely that these enforcement efforts will be strengthened, as most recently evidenced by the FCC’s Bureau of Enforcement’s proposed 2023 budget increase.
Therefore, property owners and contractors should take steps to confirm that RF devices installed at their sites comply with FCC regulations. Terms and conditions should be incorporated into contracts to require all products to comply with FCC regulations, and parties should establish procedures for remediation and compensation in the event these terms are not met.
Some manufacturers are banned for federal grant programs and buildings.
Finally, it is important to note that the FCC has also been tasked with identifying devices that may raise national security concerns. In response to requirements set forth in the National Defense Authorization Act for Fiscal Year 2019 and the Secure and Reliable Communications Networks Act of 2019, the FCC has developed a list of “covered equipment and services” that “pose an unacceptable risk to the national security of the United States or the safety and security of United States nationals”.
Federal agencies are prohibited from using federal funds to purchase or issue grants to purchase covered equipment or services, and the FCC is implementing a $2 billion program to suppress and replace existing covered equipment and service belonging to telecommunications operators. These requirements are also incorporated into the Federal Acquisition Regulation (FAR), which requires federal contractors to certify their compliance.
* * *
Introducing innovative technologies into construction projects will help differentiate proposals and add new revenue streams. At the same time, landowners and builders responsible for implementing these plans must adopt rigorous due diligence procedures to ensure that products and services comply with federal regulations designed to protect the public from interference. and national security issues.