Carriers Allowed to Sublease State-Owned Space in ‘Unusual’ Deal

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The state of Ohio is allowing Agile Networks to sublease space on up to 82 communications towers with T-Mobile. However it is possible that “hundreds of thousands of dollars” will be lost to the state because Agile is allowed to keep the lease income.

The Columbus Dispatch reported that the deal will help expand internet services to rural areas within the state, and last fiscal year Agile was paid about $2.2 million to provide wireless networks to more than 50,000 first responders as part of the deal. T-Mobile is paying Agile an undisclosed amount in monthly rent the while the state is picking up the electric bill. 

Apparently there is a 10 percent private-use limit that the “IRS places on government property, such as the towers, built with proceeds from the sale of tax-exempt bonds,” which is allowing the sublease deal to happen, a Department of Administrative Services spokesman told the Dispatch. The state also can’t confirm the exact dollar amount on that 10 percent limit, but said that it fluctuates.

Kurt Kauffman, capital finance director in the Office of Budget Management, told the Dispatch that “it is complex to track any specific dollar amounts on private use of state property because of multiple bond issues used to fund a variety of state projects, with each such arrangement requiring case-by-case examination. Some private-use limits on state property can be as low as five percent.”

Agile does pay the state some money, about $70,000 a year or $400 per site, to put its own equipment on 146 towers which the Dispatch said “permits it to sell broadband access via its network of fiber-optic cables and microwave dishes.”

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