DALLAS (CN) - A small cell tower company claims in Federal Court that $2.5 billion behemoth American Tower Corp. uses illegal tactics in negotiating with landowners for cell tower sites in the Dallas/Fort Worth area.
Both plaintiff TriStar Investors and defendant American Tower Corp. and its affiliates lease space on towers to wireless phone carriers.
Calling itself a "tiny competitor," Pittsburgh-based TriStar Investors accuses American Tower of misrepresentation, Lanham Act violations, unfair competition, business disparagement, tortious interference with contract, tortious interference with prospective business relations and breach of contract.
The privately held company says it has 600 tower locations nationwide while ATC has 40,000 tower locations worldwide.
"Rather than competing fairly and acquiring sites through superior offers, American Tower has systematically misinformed and deceived landowners to acquire sites under less favorable economic terms than those offered by TriStar, to the material detriment of TriStar and landowners nationwide," Tristar says in its complaint.
"American Tower is not a wireless carrier and does not provide any wireless services," the complaint states. "It leases or subleases space on towers to wireless carriers. The vast majority of these towers are on land leased from various landowners. American Tower's financial motivation for any given site is relatively simple: pay the landowner as little rent as possible and charge the wireless carriers as much as possible. Whatever is left between the two, minus some small operating expenses, is profit. Historically, American Tower and the other tower companies have faced little competition in retaining sites, leaving uninformed landowners with no true options but to extend their lease on whatever terms the tower company would offer. As carrier rents have continued to escalate, a typical landowner has seen the ratio of the cash flow from a tower on his or her land fall from approximately 40 percent to
less than 15 percent."
TriStar, which has about 40 employees, says it has acquired more than 600 tower locations since was founded in 2005. It claims to have "brought true competition to the cell tower industry. ... In a typical transaction, a landowner who consummates a deal with TriStar will vastly improve his or her current financial arrangement. TriStar conservatively calculates that the landowners that have consummated deals with TriStar will collectively enjoy an increase in compensation over the next thirty years of approximately $340,000,000 over the amount they would have received if they had just extended their leases under their current lease terms. This increased compensation has a present value of approximately $104,000,000."
TriStar claims that it also reduces costs for wireless phone carriers, such as AT&T, Verizon and Sprint/Nextel.
TriStar accuses American Tower of using illegal tactics to eliminate TriStar as a competitor.
"American Tower repeatedly has told landowners that if they sign a deal with TriStar instead of extending their leases with American Tower, American Tower will tear down the tower on the land and that, therefore, the landowner would lose its income stream from the site," the complaint states. "Upon information and belief, based on TriStar's communications with these landowners and based on documentary correspondence obtained by TriStar, American Tower has made these statements to many of the landowners with whom TriStar has begun negotiations. But these statements are demonstrably false and misleading because American Tower knows that it does not, in the vast majority of cases, have any legal right to tear down towers at the expiration of its ground leases for several reasons."