Lofty ambitions for high-speed high-rises

Service providers entering the multitenant unit market can find viable solutions for offering comprehensive high-bandwidth services

Today, broadband data services are accessible to business and residential customers in many regions of the country. But for the millions of people who live or work in multiple tenant unit properties - including apartment buildings, dormitories, shopping malls and office complexes - and for most hotel visitors, high-speed Internet access remains out of reach.

The relative lack of high-speed services in MTU properties may be difficult to fathom. After all, telecommunications infrastructures have been upgraded significantly in recent years, and the problems associated with last-mile access are a thing of the past. New technologies can deliver high-speed data from the telco central office (CO) or from a cable headend to the edge of a building. But to date, such improvements have had little impact on MTUs, which remain largely unsatisfied.

MTUs: Uniquely configured

Widely available last-mile technologies that leverage existing copper, such as ISDN and DSL, do not address the needs of MTUs. Even when a service provider's last-mile infrastructure reaches the edge of a building, the data still must travel to an end-user device over the building's local, private copper network.

In MTUs, the predominant private copper network topology for connecting individual units to the last mile is a single twisted pair of copper wires connected to one centrally located punch-down block, often in the basement. This configuration typically has required installation of either new cabling, multiple access concentrators or both to deliver high-speed services.

Most hotels, for instance, have one or two pairs of regular voice-grade copper telephone lines running to each guest room from a central wiring closet. Currently, more telephone lines are being tied up by guests who leave their computers connected for hours. Hotels either have had to invest in additional PBX equipment and trunk lines or rewire the building to support data traffic with a traditional Ethernet LAN. These options are equally cost-prohibitive, not to mention disruptive for normal business.

In addition, many hotels, apartments and corporate campuses are arranged garden-style, meaning one property might contain several buildings (Figure 1). The distances between these buildings often exceed the 300-foot limitation of standard Ethernet.

For these reasons, most MTUs are not well-suited for a conventional approach using structured cabling. That is why a frenzy has surrounded technologies that leverage existing wiring such as cable- and copper-based solutions. Unfortunately, the existing cable infrastructure within many MTUs cannot support two-way services and would require a significant investment to upgrade. Moreover, as a shared medium, cable's performance diminishes proportionately with the number of users, making it problematic for high-density MTUs. Cable's shared nature also raises some concerns regarding data privacy.

And while DSL would seem to be an attractive option for many MTUs, some cost concerns and technical limitations exist. Developed as a WAN technology, DSL was designed to cover long distances up to 25,000 feet. Thus, for an on-premises MTU deployment, which involves much smaller distances, DSL is overkill, and as a result, far too expensive. In addition, a continuous twisted pair of copper wire must extend from a DSL access concentrator in the telecom provider's CO to the end user. The telephone wiring infrastructure in most MTUs generally is not set up to accommodate this.

Thus, the MTU market has remained largely untapped. However, new technologies promise to deliver high-speed access to MTUs. Yet, many service providers are wondering if it makes good business sense to enter the MTU market. Is it possible to deliver to MTU customers the services they demand - and still make a profit?

The incentives are there

The MTU market is enormous. According to the Building Office Management Association, the U.S. has 750,000 large, multitenant commercial buildings. The customers in these buildings are prime targets for high-speed deployment because accessing the Internet and the corporate network is now a requirement for doing business.

In addition, National Multi-Housing Council statistics indicate that the U.S. is home to 21 million apartment units. The Yankee Group and the NMHC estimate that more than 33% of the population lives in MTUs, and in particular, California has more than 22% of its residents in MTUs.

The residential MTU market, which is populated by young, technologically savvy residents with significant disposable income, is attractive for service providers. When it comes to PC ownership, one could assume that MTU residents match or exceed the national average of 50%. Property owners realize that broadband services are a valuable tool in differentiating their properties. These services allow them to attract new residents and lower tenant churn rates.

In the hospitality industry, guests increasingly are demanding telecom services. The Department of Commerce estimates that 15 million Americans work at least part time while on the road. According to an American Express survey, 65% of business travelers carry laptops. Many business travelers now choose a hotel based on its ability to deliver always-on, high-speed Internet connectivity. Jupiter Communications, a New York-based research firm, reports that by 2002, 4 million guest rooms will be wired.

Taking into account all types of residential and commercial MTU properties, the market easily could represent a multibillion-dollar opportunity. This leaves little doubt that providers have a significant financial incentive to adopt an MTU strategy.

On-premises solutions

With new technologies available today, incumbent and competitive local exchange carriers, ISPs and systems integrators can realize the potential of the MTU market. Armed with the tools to overcome the challenges, these providers have nearly limitless opportunities to gain new customers. Scalable, high-density network systems enable the deployment of high-speed Internet access to MTU structures easily and profitably. Service providers should view this market as a business opportunity not to be missed.

Based on access concentrator technology, the new network systems are designed to reside on the properties' premises in the central wiring closet of an MTU and work seamlessly with the existing copper wiring system (Figure 2). Ordinary phone service is not interrupted when an end user accesses the Web or sends e-mail.

A service provider chooses a high-speed WAN connection for an MTU, such as a T-1, DSL, cable modem connection or fiber optics, and connects it to the network system in the wiring closet. From there, the system delivers data to individual tenant units at rates up to 1 Mb/s over the existing copper telephone wiring. With the addition of a network extension solution that uses either copper wire or a wireless link, an MTU can provide access to outlying buildings in a garden-style arrangement or to remote meeting rooms in a hotel (Figure 3).

Thus, from a single access point in the building, an entire MTU property can be provisioned for high-speed services without recabling. The combination of splitterless, self-installable customer premises equipment and remote management features minimizes the need for on-site visits. By pushing the intelligence of the network as close as possible to the customer, these solutions are cost-effective and adaptable to the needs of service providers and MTU property owners.

Some systems now available for hotels are plug-and-play and require no configuration. These systems automatically connect the user to the Internet when he launches the Web browser on his laptop. The user connects an in-room adapter into the laptop's Ethernet port, and screens direct the user through payment options and offer links to various services.

Some systems also offer built-in software that brings up a city-specific, branded and customized welcoming page when a user connects to the Internet. Hotels can generate incremental revenue from such portal sites. For example, a local restaurant that advertises on the page can provide a referral fee to the hotel when a guest clicks through to the restaurant site.

MTU property owners need to look for some important features in a high-speed Internet system. It should protect privacy by ensuring that data from one port cannot be "seen" by another port. A system must support virtual private networking, a remote access technology that uses the Internet to provide business travelers and telecommuters with a secure, low-cost connection to their company's private network. It also should accommodate future communications needs, such as voice and video services.

In addition, MTU owners do not want to construct a solution from scratch, nor do they want to make an enormous capital investment. They need solutions that integrate all the elements necessary to launch a service, including the Internet pipe, equipment, installation, custom software solutions, training, service and maintenance.

The good news is that comprehensive solutions exist for service providers looking to enter the market. As the MTU market has drawn more attention, a flood of product offerings has become available, ensuring that high-speed Internet access can be deployed to almost every MTU building configuration, including small commercial buildings, garden-style apartment complexes and hotels. Wireless-to-Ethernet solutions for multitenant properties that lack central wiring also are available.

When choosing an equipment vendor, service providers should consider the two following criteria:

1. Does the vendor offer the full range of on-premises products to provision each type of MTU? This ensures that a provider can serve the broadest range of MTU customers while working with only one vendor;

2. Is the equipment designed specifically for the MTU market? The equipment sold by some vendors originally was designed to reside in a telco CO and is not optimized for the MTU environment.

Those service providers that add high-speed MTU services to their offerings today can get a jump on the competition in this emerging market.